One thing I’ve learned from reading business books and blogs is that good business isn’t just about making money. It’s about making your customers happy. Happy customers are repeat customers; they are oftentimes also referring customers which means more customers and the cycle continues. This seems to be a fairly simple rule – common sense almost but you’d be amazed at how many businesses fail in this area. One particularly spectacular failure was observed by yours truly in the Metro this week. Now for those of you not familiar with the publication, the Metro is a daily, free newspaper that is available for commuters at stations and buses pretty much everywhere in the UK.

Customer number one is 27 year-old woman whose prematurely-born baby girl died while she was on holiday. On top of the terrible grief she must have been going through, Axa refused to pay the £60,000 medical bill because she had not disclosed her medical condition and was therefore in breach of her policy. So not only will this young woman have to cope with the loss of a child, she’s also stuck with a huge medical bill that her insurance company is refusing to pay on (in my opinion) a technicality. Nice.

Customer number two is a 23 year-old man who got badly hurt in a buggy accident when he fell 15ft down a ravine. His family say that Axa left him in the Greek hospital for a week because they wanted him to fly home in a passenger plane to save money. Ouch.

It looks as though Axa cares more about the contents of it’s contracts than the well-being of it’s customers – at least that’s the message I got from these stories. This is the same message that thousands (if not millions) of people all over the UK got that day (did I mention that the paper was free?). That’s thousands of pounds in advertising down the drain because you know people are going to remember this when it’s time to choose an insurer. The one thing people want from their insurance company is to feel safe and secure in the fact that if anything goes wrong they are in good hands and not have terms of contracts waved in their faces. Axa seems to think differently and now they’ll face an uphill struggle trying to reverse the negative light these articles have undoubtedly put their business in.

Notice the title of this post isn’t ‘The Price of a Good Reputation”. A good rep is priceless but it’s going to cost you – either financially or in other ways such as time, inconvenience, etc.  Axa tried to avoid those costs and ended up in a national paper for all the wrong reasons. I don’t doubt that Axa was technically in the right in those cases but sometimes being right isn’t necessarily the same thing as doing the right thing – especially when it comes to customer satisfaction. If Axa had just made concessions in those two cases, they’d have had very satisfied customers. They probably wouldn’t have made it into the Metro but in the light of what’s happened, that would have been a better alternative. I don’t think it’s too late for Axa however. A press release with a public apology and some compensation to the injured parties would go a long way towards making things right. Moral of the story:

Keep your customers happy. Period.