More than 20,000 people are losing their jobs in the Czech Republic every month during the economic crisis. Some companies are taking advantage of the situation and want to attract new customers. They offer discounts on package tours for the unemployed, insurance for monthly bills, and free electricity for three months in a bid to gain the reputation of a friendly company, providing support at a time of economic crisis.
Marketing move
“It is just a marketing move. A legal way to attract new customers. It works. But when many companies start to offer these benefits, it will be necessary to come up with something else,” said Pavel Brabec, head of the Association of Czech Advertising Agencies and Marketing Communication.
The travel agency Nev – Dama, for example, offers unemployed customers a 30% discount on seaside holidays. If a client buys a package tour from the Nev – Dama Summer 2009 catalogue and is then laid off, he or she will be refunded 30% of the tour price settled. But the travel agency is cautious when distributing the discounts – the unemployed have to be registered at an employment office for at least 30 days. “All travel agencies are experiencing a decline in the sale of package tours. This way, we want not only to attract new customers, but also to accommodate our regular clients and provide them with the guarantee of holidays. But nobody has used our offer for the time being,” said Daniel Klotz, spokesman for Nev – Dama.
Power producer ČEZ has been more successful with its new offer. “An electricity bill is the last thing you should have to think about when you lose your job,” the state-run giant says in its advertisement. The company has arranged insurance of electricity bills for its customers in case of unemployment. “Those who lose their job are the worst hit by the crisis. That is why we want to help them create a financial reserve that would enable them to cope with the difficult period of time,” said Daniel Beneš, executive director at ČEZ. As of 1 March, all ČEZ clients who lose their job and register themselves at an employment office will not have to pay three monthly advance payments for electricity. The bills are paid by the insurance company Kooperativa for these customers. To date, more than 600 clients have used the service.
“There is a simple reason for why ČEZ has chosen to insure all customers. If we exempted our unemployed customers from paying the advance payments, we would violate economic competition rules. At the same time, we are not ready to administer the whole process on our own,” ČEZ spokeswoman Eva Nováková said. The company places the costs of insuring 2.7 million electricity buyers at hundreds of millions of crowns.
Insurance of monthly bills
The insurance company Česká pojišťovna offers unemployed people insurance of their monthly bills. The insurance covers the loss of a job as well as the inability to work as a result of illness or injury. In these cases, the subsidiary Česká pojišťovna Zdraví covers the expenditures on rent, electricity, gas and water as well as education fees at various types of schools for the client.
“The insurance of monthly bills guarantees that people will be able to pay they obligations in time in the event of unemployment or illness,” Česká pojišťovna Zdraví sales director Petr Jícha said. The price of the insurance starts from CZK 178 a month. The insurance is also available to self-employed people who had to cease their activities for health reasons or due to insolvency. “So far a few hundred people have purchased the product. Demand for insurance in general has increased during the crisis,” Česká pojišťovna spokesman Václav Bálek said.
