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How to Strong Arm Your Way to a Better Deal

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The economic malaise has probably had an effect on your life, I know it has had one on mine. However, as bad as you think your personal prospects are, it’s worse for companies that have to make payroll, rent, and debt obligations. At the end of the day, you have to take care of you and your own, which is why I recommend that you periodically shop around and use that information to strong arm your way to a better deal on the services you already buy.

Don’t feel badly about using your most powerful a weapon, the power of choice, to negotiate a better deal. When you pay $60 or $80 or $100 a month for cable television, you’re not getting $60 or $80 or $100 worth of service. You’re getting something the company is selling to someone else for $30 a month. They will charge whatever the market will bear and it’s up to you, the consumer, to push back and tell them that their price is too high. At the end of the day, they would rather you spend $5 a month than quit and spend $0.

How to Strong Arm Your Way to a Better Deal

  1. List all the recurring bills you have each month from your power bill to your cable television bill to your cell phone bill.
  2. Take just one of them today, let’s say your cable television bill, and find all the competitors that service your area.
  3. Now find all the competing offers out there and find the best one. It’s OK if the service offering isn’t a perfect match, as long as it’s close then it’ll work. So for cable television, you don’t have to find a cable television provider, a satellite provider will be good too.
  4. If you are under contract, find out how much the early termination fee (ETF) is.
  5. Call up the competitor and get the full details of the promotion you saw. If you have a contract, ask if the competitor would be willing to pay the early termination fee in return for your business (service providers are willing to do this, I had door-to-door Comcast guys try to get me to terminate my Verizon FiOS contract)
  6. If you are under contract and the competitor won’t pay the ETF, get the next best offer and repeat. If none of them are willing, wait until your contract ends to continue (sorry!) unless the promotional offer is so good it would make financial sense.
  7. Call up your current provider and politely ask them (this is important!) if they will match the promotional offer. If they refuse, tell them you’d like to cancel your service because the competitor’s offer is better.
  8. You should be transfered to “Retentions,” where someone should give you a matching offer, or at least a better offer than what you were paying. If they don’t, you have to be prepared to either hang up and start the process over again (in the hopes of getting a more forgiving CSR in retentions) or cancel and use the competitor’s service.

My friends and I go through this ritual every single year with cable television. The best Comcast deals usually only last 6-12 months before the promotional period expires. Every year, we would call Comcast, pull out a flier from DirecTV or Verizon, and try to argue a better rate. My friends in Baltimore City had a little more trouble than me in the suburbs because Comcast has a virtual stranglehold on cable television. Comcast’s only competitors for cable television were satellite providers like DirecTV. Fortunately, the best DirecTV deals are very competitive with Comcast’s offers so they were still able to strong arm a better deal.

You can do this with cell phone service, internet service, almost anything where there are good substitutes and a low marginal cost. Marginal cost refers to how much it costs to actually offer you service. With cell phones, the marginal cost is very small because the cell phone towers are already constructed and in use. It’s simply a matter of giving you a handset and the right to add traffic to the line. With cable television, it’s even lower because the infrastructure is in place – you simply have to plug into it. Home security systems like ADT? Same thing, adding another customer might add some load to the system but they certainly make way more money on the subscriber fees.

(Photo: michal_hadassah)

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18 Responses to “How to Strong Arm Your Way to a Better Deal”

  1. Erin says:

    I love this idea. I currently have an iPhone—do you think it’s reasonable for me to expect that I can bargain my way to a lower bill with AT&T? Or because AT&T has cornered the market with iPhones (and I’m reluctant to give it up), I’ll probably just have to pay full price?

  2. jb says:

    Love the idea, and this works well in a market with a few different competitors. But most recurring bills that many of us face have no competition (electricity, gas, water, cable for those in an apartment, internet for those with only DSL available).

    Any ideas of other areas where you can do this? I’ve been thinking of trying to do this with my apartment after my lease is up (I’m sure they’d rather have me stay than try to get a new tenant). Problem is you have to be willing to make the switch if they call you’re bluff.

  3. I have always had great luck with Comcast. I could always drop the bill from like $120 to about $80 without fail for 6-122 months. I have since cut back on my TV and purchases, but they just raised my rate back to $100 a month for internet, phone, and cable, so they are due a call again.

    One company that never treated me well in this respect was Verizon. They were never helpful.

  4. Start-Up says:

    I’ve heard stories about calling your cable provider and getting free premium channels added to your deal in addition to reducing the fee. It’s always worth your time to call and see if they can reduce your bill or add something extra. They want to keep you as a customer.

  5. I’ve got Time Warner down south and I get them to cut their rates by threatening to move to Dish. I don’t bully them, but when service gets spotty on something that is supposed to be reliable and burried under ground, I want to be compensated for missed uptime.

    I might be moving to an area that comcastrates you, so I hope I have the same luck. It sounds like I will.

    My best story though was in buying my car last year. I got a 2008 Accord below invoice. I could probably get it for cheaper today, but I needed a car back then and I’ve already paid it off. Today it is at the dealership getting the $15k service. They asked me to come in promising a 50% discount, but I told them I wanted my car washed too so they obliged.

    Now I’ll have a clean car and everything inspected for a nice road trip that starts tomorrow.

  6. tom says:

    It’s interesting you bring this up.

    This is like people complaining they don’t get paid enough. It’s not that the company doesn’t have enough, or pay enough.

    They pay others more, they just pay you less. Why don’t you ask how you can make more.

  7. MissMartha says:

    One thing that I always recommend to my friends is it “just ask.” I have found that if I have a problem with my bill or my service that a call to a CSR (customer service representative) can be very helpful. When I was job searching and placing many daytime calls my phone bill ended up being $200 (normally $60). I quickly called my provider, with a little help from the CSR I got another 200 minutes/month for free and that plan added to my current bill so I only had to pay $80 instead of the $200! If you are nice, and explain the situation most people will try to be helpful. If you don’t get what you want, you can always call back at another time and try again. It never hurts to ask!

  8. Unfortunately, there’s not a lot of competition for services where I live. One thing I do that usually works, is I call AT&T whenever I see a sign-up offer for new subscribers that is cheaper than what I pay and ask them to extend that rate to me, their loyal customer. So far, they have always agreed.

  9. tom says:

    MissMartha, you bring up a great point, it is so simple and people don’t do it.

    Just ask, stop assuming, because if you do you make an ASS of U and ME

  10. thomas says:

    I loved calling comcast and telling them to lower my bill. I posted about this exact thing last month and have added a few other bill lowering tips.

    With the economy failing, the opportunities to get discounts and deals will go up.

  11. elisa@Thrive says:

    I did this with Time Warner in Astoria, New York.

    I firmly told them that I would cancel my internet service ($50 a month!) unless they matched an offer I read in the Metro by Sprint (half the price).

    The operator laughed and told me that in my area, Time Warner was the only provider, but that I was welcome to cancel.

    I didn’t cancel.

  12. This really organized approach is great!

    It’s amazing how many service providers and retailers will come down on their price if you just quietly ask. Some years ago, I learned this about furniture stores: often they’ll reduce the price on pieces offered at regular price, and sometimes they’ll even come down on a sale price. More to the point, LOTS of retailers, including grocery stores, will give you a deal if you ask nicely enough. A$k and ye shall receive.

  13. Dave says:

    I just called comcast and the only package they had to offer me actually cost more than my current package… jerks. Just got a flier for Direct TV in the mail so I figure that I’ll call back and get a different CSR in a couple of hours and see what happens…

  14. Danelle says:

    I just called Comcast and they had nothing but more expensive triple play crap. I said that my bill has gone from about 110 to 150 in the last couple months, not all at once, and that I needed to see what programs they had available for customers now. They started canceling my HBO and HD without asking me, and seemed startled when I objected. So arrogant on the phone too. I called in the wrong time of day and got macho crap. Will be calling later.

    How long do I have to cancel for before I qualify as a new customer anyway? I can skip this summer….

  15. Gertrude says:

    I am paying $160 monthly for four phones for 1400minutes talk and unlimited txt No web. Is there a better deal out there? this is verizon. also, can they still hold you to buying out 2 yr contracts?


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