Sales Rep: Yes.
Me: You’re sure? It’s not going to go up after a month or two?
Sales Rep: Correct.
Me: And we’re not getting any less service at this price?
Sales Rep: Right. Oh, there is one thing … you’re also going to get this new Samsung tablet as part of the package. That’s already included in the price I quoted you.
Shopping Around for a Cell Phone:
That exchange of words above is exactly what happened just a few months ago when I started shopping around trying to lower my bills and find a cell phone for my daughter.
Originally my wife and I were planning to get her an older, used one off Ebay. However after reading a lot of warnings and horror stories on the Internet about bad iPhones, I decided it would probably be a better bet to simply work with an actual cell phone service rep and try to get a legitimate one.
Well … much to my surprise (and benefit), I was happy to come across a very eager salesman who was able to turn the whole thing around for me in a way that I was not expecting.
With one visit, we were able to:
- Break our old cell phone plan
- Enter into a newer, cheaper one (with limits that far exceeded what we currently use)
- Bump my wife’s old iPhone over to my daughter
- Hook my wife up with a shinny, new iPhone 6
- Apply a few local discounts we didn’t know about
- And throw in a Samsung tablet for the house (that’s no joke)
… And with no money out of pocket, my monthly bill remained the same!
How can this be?
The Power of Customer Retention:
More than ever companies need to do everything in their power to try to claw and keep you as a customer, even if that means giving you ridiculously great deals at times.
Why are they doing this?
If you take a look at the math, it seems really simple. This exert from the magazine “Inc” explains the concept very well:
… a company that increases its number of new customers by 20 percent in a year but retains only 85 percent of its existing customers will have a net growth rate of only 5 percent (20 percent increase less 15 percent decrease). But the company could triple that rate by retaining 95 percent of its clients.
Of course, growth is just one of the benefits that superior customer retention can offer a company. Increased profits are another. The cost of acquiring customers and putting them on the books generally exceeds by several times the annual cost of serving existing customers. So the longer customers are kept, the more years over which the initial cost of acquisition can be spread.
In the modern day and age of the Internet, customers can flee in the blink of eye. It takes almost no effort at all to research and find a new and better rate on just about anything.
Recently when my Comcast cable and internet bill reset to standard pricing, I about had a stroke over how much they wanted to charge us for the “regular prices” of these services!
In less than 10 minutes I found a far better deal with one of their competitors that was almost 1/3 the price of what my TV service is now.
When I called Comcast and mentioned that I was trying to lower my bills and thinking about switching, they became very motivated to work with me on more generous pricing, and right away gave me whatever current promotional deal they had going.
All in all that reduced my bill down by $60 per month. That’s a savings to me of $720 for the year – all with one phone call!
(… and that’s not the first time or best score I ever got with Comcast. One time I called and saved over $1,200 for the year!)
The Lesson Learned:
As a consumer and potential life-long customer, you hold the power!
Why? Because your’e the one with the money! You’re the one who will decide where that money will be spent.
Anyone who wants to retain you as a customer or see their business flourish for the long haul has to recognize this and be on board. Otherwise their competitors surely will!
What You Can Do to Lower Your Bills:
You’re probably saying to yourself: That’s great that I have all this power. Now how do I actually put it to some good use?
Here’s what you can try:
1. Don’t be afraid to ask:
Simply asking a question like “can you give me a better deal” is not the worst thing in the world. You’re not being petty.
You’re not devaluing your integrity. You’re just shopping around trying to lower your bills and get the best deal possible.
The worst thing they are going to say is “no”. And then you move on.
Speaking of which, back to my cell phone story, that Service Rep with the great deals was actually the third person I called. I called two other stores of the same cell phone provider and the sales reps at both places told me there was nothing they could do for me. I knew that wasn’t right, so I just kept on calling until I got lucky.
As you can see, it was an effort that paid off well!
2. Have a specific competitor’s deal in hand:
When I called Comcast to get my cable and internet lowered, I think the one thing that really gave me a lot of leverage was the fact that I had a very specific customer deal in hand when I called.
Notice I didn’t just call and say “hey, lower my price!”. I gave them the URL of the offer I was looking at going with, and they were then very happy to work with me to see what we could do about a reduction.
Keep in mind that your service providers are smart people. They can tell the difference between a lot of baloney and the real potential for a customer to actually leave. Before you give them a call, make sure you do a little homework (it won’t take you more than a few minutes) and have a real, valid offer that you can use as evidence.
3. Be prepared to actually call their bluff:
There are some companies that, for whatever reason, are still stuck in this mindset that they don’t to try very hard to keep you as a customer. Maybe it’s an ego thing or maybe the particular sales rep you’re talking to just isn’t really that motivated.
I ran into this about a year ago when I wanted a better deal on my auto insurance (read the whole story here).
At the time my auto insurance had crept up to what I considered to be an unrealistic price.
I easily got 3 comparable quotes off the Internet and presented them to my insurance rep. Much to my surprise, she was unwilling to change her price!
So what did I do?
I called her bluff and switched insurance companies! I did exactly what I had told her I was going to do if they didn’t cooperate and try to work with me on the price.
Sometimes that’s what you have to be prepared to do. As much as you may want something or like the service of a particular business, be prepared to make the switch if you say you’re going to.
The way I look at it was that this was going to be a win-win for me either way. Either my current provider was going to come down in price and I wouldn’t have to change a thing. Or I switch providers and save a boat load of money that way. In the end I saved myself over $600 in the process.
Remember – As long as you’re the one with the money and you get to decide where to spend it, you hold the power of customer retention. It’s your decision whether to spend it with them or spend it someplace else.
So make sure you use it to your advantage! Get the service and price you deserve.
Someone out there is going to be hungrier for your business than the next guy. So use it to your benefit to lower those bills as much as possible.
Readers – How have you used the power of customer retention to get your bills lowered? What’s the best score you ever had when you tried to negotiate a better price or deal?
Images courtesy of Pixabay and FreeDigitalPhotos.net