I’ve written several times about the significant savings you can achieve if you haggle with your media providers like DirecTV, be it broadband internet, telephone, or cable/satellite TV. A simple phone call can save you hundreds of dollars per year. This is as true today as in past years, and below is a collection of all related tips as well as some new information.
Why does it work?
Media service is like banking. People tend to stick with who they have, and the companies make tons of money from it because they can raise prices and most people just accept it. As a result, competing companies have to offer rather juicy deals to make people switch. But since customer acquisition is so expensive, if you let your existing company know that you’re shopping around, they will gladly give you a temporary incentive to stay. Media is so profitable that they can give you a discount of $20-$40 a month and still make money.
Of course, they don’t offer this to everyone because your neighbor is probably paying full price without complaint. In behavioral finance terms, this is called price targeting.
- Call customer service and tell them you are thinking about canceling your service. Your goal is to reach the Retentions Department. As you can tell from the name, the primary goal of this group is to keep you as a customer (for as cheaply as possible). This means they have the most discretion when it comes to service discounts.
- Prepare your pitch. I like using the “open-ended approach” which consists of basically saying “I’m unhappy and shopping around. What can you offer me?” You leave it up to them, and see what they throw at you. You may also throw in a competitor’s offer (see below). A script suggestion:
DirecTV Retentions: How can I help you today?
You: Hi, I’ve been a [current company] customer for a while now, but I am trying to lower my expenses. I’ve been seeing commercials for [competitor's name] offering service for [$XXX]. Am I eligible for any similar discounts to my service?
- Accept or counter. If you’ve been paying full price for at least 6 months, you’ll likely get offered a discount instantly on the order of $20 a month or more. However, you can always ask for more. If they aren’t willing to budge on price, you can ask for some freebies like free DVR rental or free premium channels. They’re usually happy to give you these because you might pay to keep them later.
- Hardball method. If they won’t budge or you really want to push the envelope, you can ask to cancel the service. Say that you want to set the cancel date a few weeks into the future so you can have time to install the alternative. This should reveal their “final offer”. You can wait even longer and see if they follow-up later with an even better offer. If you decide to stay, simply call them back and your service will never be interrupted.
- Rinse and repeat. Usually your discount will last 6 or 12 months. Once it goes back up, you can try again. You may get more pushback the next time around however (but try anyway). I’ve found that if you pay “full price” for 6 months, then they’re more willing to offer you another round of discounts.
Here are some links to the major companies and their current offers:
- DirecTV current offers. $29.99 per month for 12 months plus HD and other extras. Or call the DirecTV offer line at 1-888-704-8323.
- AT&T Internet, TV, Phone. High-speed internet for only $14.95 for 12 months.
- Comcast. Cable TV + Internet for $70 a month.
- Charter. High-speed internet at $19.99 a month.
- Cox. High-speed internet at $19.99 a month for 3 months.
You’re not being too sneaky; the companies know people are doing this, and asking for a deal has been getting increasing media coverage. Here’s a lengthy WSJ article from late 2011:
Many providers offer less-expensive packages with fewer channels but don’t advertise them widely. Providers often will allow customers to continue cost-saving promotions well after they expire. Other providers will cut you a new deal every six months—but you have to call and ask. Often, if customers threaten to cancel service, they are transferred to the “retention department” staffed with representatives who are trained to offer customers deals to stay put.
However, most people still don’t bother, and that’s why the opportunity persists for those willing to act. In fact, Consumer Reports had some pretty interesting stats that showed that negotiating has some great odds:
Seven out of 10 readers with a triple-play package didn’t even try to bargain on their telecom bills. Yet of those who did, more than 90 percent got some accommodation. Price reductions led the list of concessions, with about 40 percent of bargainers reporting savings of up to $50 a month.
Remember, you lose nothing by asking! Even the shyest person can simply ask nicely for them to check if you are eligible for any discounts, there’s no requirement for meanness or verbal ninja skills. Share the discounts that you scored in the comments.
By Jonathan Ping | Frugal Living | 6/13/12, 1:58am