• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
My Money Design

My Money Design

Designing Financial Freedom

  • Start Here
    • Start a Blog
    • What Is Passive Income?
    • Passive Income Ideas
    • My eBooks
  • Categories
    • Retirement
    • Savings & Budgeting
    • Stocks & Investing
    • Philosophy & Motivation
    • Travel Rewards
    • Money Books
    • Mortgage & Refinance
    • Insurance & Estate Planning
    • Credit
    • Taxes
    • Career
    • Blogging
  • About
    • Contact Us
    • Advertise
    • Privacy Policy

How to Use the Power of Customer Retention to Lower Your Bills

August 10, 2015 by MMD 30 Comments
Some of the links included in this article are from our advertisers. Please read our Disclosure for more info.



Lower My BillsMe: So I get to add an extra line, get a brand new iPhone 6, and my monthly bill is going to be exactly the same?

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:

Customer retentionI believe what I was experiencing here was the marvel 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.

For Example:

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:

Lower your billsI can’t tell you how many times I tell people about my amazing scores (such as these two examples) and they reply with: Oh, I could never do that.

Why?

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.

 

Conclusion:

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

Filed Under: Savings & Budgeting Tagged With: lower your bills

Reader Interactions

Comments

  1. Jayson @ Monster Piggy Bank says

    August 10, 2015 at 6:57 am

    I have never done this to lower my bills. This week, I’d surely try every possible way so that I can get what I deserve MMD. I am drafting my questions later so that I am prepared and construct my message in a way that could elicit positive answers.

    Reply
    • MMD says

      August 10, 2015 at 7:37 pm

      Good luck with that. I’ve never been disappointed by this process because I’d say more than half the time it works. You’ve really got nothing to lose. If anyone dares tell you “no”, then you just go looking for another provider that will be hungrier for your business and take better care of you.

      Reply
  2. Holly@ClubThrifty says

    August 10, 2015 at 8:04 am

    Yes! Since it costs less to keep an existing customer vs. marketing and finding a new one, it makes sense they would offer you a spectacular deal. Glad you are having a good experience with Comcast! They suck where I live. I wouldn’t use them if they paid me.

    Reply
    • MMD says

      August 10, 2015 at 7:38 pm

      I wish more people realized that this phenomenon was true and used it to their advantage!

      Who do you use in place of Comcast?

      Reply
  3. John @ Frugal Rules says

    August 10, 2015 at 9:58 am

    Nice work on the savings! We do this regularly to try and cut down on the cost of different services. Like you said, the worst they can say is no and if you’re nice about it then it’s likely you’ll be able to get some sort of discount. I wish we could get something similar on our internet though – we have only one real high-speed provider in Omaha – Cox. They use that to their advantage as the only other option is DSL which is nowhere as fast. They have a monopoly, for the most part, and know it and use it to their advantage.

    Reply
    • MMD says

      August 10, 2015 at 7:39 pm

      That’s too bad. I totally recognize that in some industries and some areas not everything will be negotiable.

      Reply
  4. Fervent Finance says

    August 10, 2015 at 2:27 pm

    I do this all the time. But lately I’ve been trying to shed as many recurring bills as possible. Luckily work covers my cell phone bill. But I call the cable company every 6 months to try to get lower rates. Once I move out on my own, and don’t have roommates anymore, cable is going out the window.

    Reply
    • MMD says

      August 10, 2015 at 7:47 pm

      Sweet! Are you going to get something in place of cable? Or just rely on Netflix and other avenues …

      Reply
  5. suzie says

    August 10, 2015 at 2:56 pm

    We use 2 different internet connections, one thru cable, the other thru landline phone. This is on purpose because my husband works from home and must have a reliable, secure connection. Last year we were having a problem using the the landline connection. Simply put it wouldn’t work. Every time I called the company they would say they were trying to fix the problem and then end up say well we have to send a technician to the house. I kept saying no thanks because it would have been a huge hassle. After 8 months of this I finally called to tell them I was cancelling the internet service. The rep kept trying to convince me not to but I remained firm.. Finally I was transferred to another dept. Gentleman I spoke with was very nice and listened patiently while I explained the whole situation. Finally he looked at something on his screen, said let me try something, then asked me to try again to get on the internet. Surprise, surprise I got on the internet, no problem.

    Reply
    • MMD says

      August 10, 2015 at 7:49 pm

      Isn’t it crazy how deep you have to go sometimes just to get the service you deserve? Now that was a guy who really wanted to hang on to you as a customer. Good for him for helping you, but even better for you for not tolerating it and doing something about your lousy internet service!

      Reply
  6. Jason B says

    August 10, 2015 at 9:38 pm

    I do this a few times a year with my internet and satellite. I’ve never had to tell them that I saw a better price with a competitor though. I just tell them I’m thinking about leaving your company because the price is getting out of my range. Everytime I do that I get some savings.

    Reply
    • MMD says

      August 16, 2015 at 7:23 am

      That’s just it – they need to keep that customer retention. It will be harder for them to get a new customer than it will be to give you a better deal, so they’ll always just give you a lower price.

      Reply
  7. Kim@Eyesonthedollar says

    August 10, 2015 at 11:02 pm

    I have had success several times with insurance and internet, all for taking the time to make a call and ask. I’ve also been denied, but you never know until you try!

    Reply
    • MMD says

      August 16, 2015 at 7:24 am

      It’s amazing how much money you save. Hundreds of dollars all for 10 minutes of persistence!

      Reply
    • MMD says

      August 16, 2015 at 7:24 am

      It’s amazing how much money you save. Hundreds of dollars all for 10 minutes of persistence!

      Reply
  8. Cheryll Abanto says

    August 11, 2015 at 12:43 am

    One of the good effects of competition, aside from the fact that costs of production and technology have gone south. The exponential rise of emerging markets, and the increase of tech geeks have all contributed to the downtrend of prices. But it comes with a bonus for these manufacturers: they have a 24/7 watch over their customers, and that is where money lies.

    Reply
    • MMD says

      August 16, 2015 at 7:26 am

      It’s amazing how cheap laptops, tablets, and phones all are now. But you’re right – its scary to think about how much data they are collecting on us as we stream and connect all our devices.

      Reply
  9. Abigail @ipickuppennies says

    August 11, 2015 at 12:14 pm

    We’ve definitely done this from time to time. Sometimes they work with us, sometimes they don’t.

    One suggestion is to have multiple suggestions of how to save money. If Dish refuses a discount, ask what the next lowest package of channels would cost. Then go to the “Well, DirecTV sent me an offer.”

    The one thing I’ll say, as a person who works in customer service, is that you shouldn’t try to use leverage you don’t have. That sounds simple enough, but you’d be surprised.

    We get people asking us to fix things because they’re loyal or long-term customers. Sometimes that true. Other times, they started using us less than 3 months ago, or in the three years they’ve been with us, they’ve made like 4 purchases.

    Don’t get me wrong, we try to go the extra mile for our customers. But if you try to pull that “you’ll lose me as a customer” thing, be sure that’s worth something to the company. Otherwise, you just make the CSR and/or the supervisor either amused or grumpy. Either way, they may be less inclined to bend over backward.

    Reply
    • MMD says

      August 16, 2015 at 7:28 am

      That’s very true. You can’t go around making false claims or using clout that you don’t have.

      Reply
  10. Dee @ Color Me Frugal says

    August 11, 2015 at 11:02 pm

    I actually just did this today! I called our cell phone provider to see if I could score a better deal, and in less than five minutes I managed to decrease our bill by $20 per month! Gotta love it. I’m totally planning to call back in a couple months to see if I can get them to drop it even further. Love businesses like cell phone providers that have lots of competition!

    Reply
    • MMD says

      August 16, 2015 at 7:29 am

      Congrats! $240 for five minutes of work. Now that’s an ROI to be proud of.

      Reply
  11. EL @ Moneywatch101 says

    August 12, 2015 at 11:24 am

    I’ve done this a few times with the cell phone provider (Not much luck) and with cable providers (got some good discounts). I’m slowly creeping into the mentality that I don’t want either service but the wife has a difference of opinion.

    Reply
    • MMD says

      August 16, 2015 at 7:32 am

      I’ve toyed with not having either service as well. But like you, I’m afraid my house would have a mutiny if we did that.

      Reply
  12. Mike@ Tomorrow Finance says

    August 12, 2015 at 9:17 pm

    “Can you give me a better deal” is the best strategy. Always works for me

    Reply
    • MMD says

      August 16, 2015 at 7:33 am

      I’ve tried that statement in the past, but sometimes they just defer me to a cheaper package at standard pricing. Usually I have to escalate it to the “your competitor’s price is this and I’m thinking about switching” before I get any real traction.

      Reply
  13. Chella says

    August 22, 2015 at 7:18 pm

    Succinctly laid down. I used to buy phones from malls and other places where the prices were ridiculously high. However, just like you noted, there are sales-men willing to sell the phones at cheaper prices. In addition, some of these phones that are obtained from the salesmen are of high quality unlike the counterfeits that fill the earth.

    Reply
    • MMD says

      August 23, 2015 at 9:53 pm

      That’s precisely why we didn’t buy one off of Ebay. I’ve been burned before by a low quality imitation phone. That’s too much money to waste.

      Reply
  14. AJ@ Consolidation Deal says

    August 26, 2015 at 3:15 am

    The best way is ” Call and ask ” . – I’m a big fan of doing lots of things online, but rate-reduction isn’t generally one of them. No matter how nervous you are about negotiating on the phone, you often stand a better chance when you’re actually speaking with a representative.

    Reply
    • MMD says

      September 1, 2015 at 9:11 pm

      Amen to that! Getting that right kind of rep on the phone who will work with you is key!

      Reply
  15. Christopher Hay says

    August 1, 2016 at 10:33 pm

    I have heard of this before and I have had an experience with customer retention myself, not asking for a lower bill but to get some charges waived. I went on a vacation a few years ago and had my phone roaming, it was supposed to stop all roaming charges when the bill reaches a maximum of $700, when I got back I was faced with an almost $900 bill, when I asked why it was not stopped at $700 like my contract stated, they said sometimes it goes over, I asked to payoff and cut the phone then I was transfer to a manager I believed who waived the addition $200 so I just paid the $700 and kept my plan.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

  • Email
  • Facebook
  • Pinterest
  • Twitter

More Great Posts!

Footer

Recent Posts

  • How to Manage Your Debt and Reduce Financial Stress
  • How to Invest During a Recession and Actually Make More Money
  • What’s the Best Way to Retire Early? By Doing This One Important Thing
  • How to Stop Worrying About Money – 5 Effective Strategies for Better Money Habits
  • How to Turn Cloudy Pool Water From Green to Blue

Search

Archives

My Money Design is for entertainment and reference purposes only. The information presented is the opinion of the author only and should not be interpreted as specific advice or recommendations towards your financial situation. Always consult with a true professional before making any financial decisions.

Affiliate Disclaimer: My Money Design may be compensated for our personal opinions, reviews, and affiliate relationships with some of the featured products and services. Google Adsense and Amazon Associates are examples of such relationships. Such content, advertising space or posts may not always be identified as paid or sponsored content. All offers or claims are subject to change without notice and should be verified with the manufacturer, provider or party in question.

Copyright © 2011–2025 MyMoneyDesign.com · All Rights Reserved · Powered by WordPress

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.