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An easy way to lower your cable bill

There's no requirement for meanness or verbal ninja skills to make this work.

By MSN Money Partner Jun 21, 2012 12:18PM

This guest post comes from Jonathan at My Money Blog.


Image: Watching television (© Corbis)I've written several times about the significant savings you can achieve if you haggle with a media provider like DirecTV, be it for 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. Below is a collection of tips on getting those bills down, as well as some new information.


Why does it work?
Media service is like banking. People tend to stick with the service 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.   (Post continues below.)


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 to $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.


Negotiation tips

  • 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 for the company). 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:
Retentions Department: How can I help you today?
You: Hi. I've been a 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 six 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 the representative isn't willing to budge on price, you can ask for some freebies like free DVR rental or free premium channels. The provider is usually happy to give you these because you might pay to keep them later.
  • Hardball method. If the company 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 the "final offer." You can wait even longer and see if the provider follows up later with an even better offer. If you decide to stay, simply call back and your service will never be interrupted.
  • Rinse and repeat. Usually your discount will last six 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 six months, a company is more willing to offer you another round of discounts.

Bargaining chips
Here are links to some of the major companies so you can evaluate current offers:

Media coverage
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 Wall Street Journal 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 has some pretty interesting stats that show negotiating has great odds of success:

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% got some accommodation. Price reductions led the list of concessions, with about 40% 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 the company to check if he is eligible for any discounts. There's no requirement for meanness or verbal ninja skills.

 

Share the discounts you scored in the comments below.


More from My Money Blog and MSN Money:

6Comments
Jun 22, 2012 11:50AM
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I was shocked when I called my cable company and told them I was going to switch to another company.  They immediately matched the offer with saved me $25/month.

But what really surprised me is when, during a time of tight cash-flow, I cancelled cable TV and bought a pair of cheap rabbit ears.  I can get 32 stations living between Baltimore and Washington, including a lot of x.2, x.3 etc. stations the cable companies don't carry, including several PBS stations, an older movie channel, a country and a pop knockoff of MTV, and a sports channel.  Especially great but not-on-cable is the new Washington PBS station's "WETA-UK" which is 24 hrs/day British TV shows, including the really great series like Downton Abbey, Doc Martin, Vicar of Dibley, Sherlock Holmes, Last of the Summer Wine, the new Doctor Who, Are You Being Served?, Lark Rise to Candleford, Ballykissangel, All Creatures Great and Small, etc.  Now that I can afford cable again, I haven't signed up for it.

Jun 22, 2012 8:02PM
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I called TWC and followed this script.  As a long-time TWC customer, I have followed similar scripts many times over the years with good success.
This is my second call this month.  The last c/s rep suggested I call on the 19th when new promotions should be available.
The guy offered me bundles OR a free three-month DVR, but said there was nothing just for television, which is about as much business as I want to give to this company.
I scheduled a cancellation date.

I started off with I'm unhappy and I'm shopping.  Instead of sending me to Retention, this overconfident rookie who answered the phone thought he was best prepared to handle me. 

Jun 22, 2012 7:52AM
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This presumes that you do not live in an apartment complex that has a deal with the cable provider.
Aug 9, 2012 4:37PM
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Cant save here in Las Vegas.  NO COMPETITION.   A well placed, long term $$ under the table scheme works wonders in gaining a MONOPOLY even where there SHOULD BE  wide open full court competition.  To be sure, HERE in Las VEgas -- we'll have none of that competition crap for our folks.

 

Only one company -- COX CABLE -- is allowed to "SERVE" (defined as rip off) THIS market.  And you can bet that prices just keep on climbing while service, at best, has never been better than ho-hum.   If you think crappy service, ridiculously high prices and quarterly rate increases accurately defines the persistent gouging at Directv -- and it DOES -- you ought to come HERE and watch the master franchise scam artists work.   Even the big utility execs could learn some lessons from these dudes at Cox on the art of how to term an application for rate increase and learn similar lessons on how to write an excuse for approving those rate increases from the Town Dudettes who ALWAYS Routinely APPROVE those applications.

 

FROM AMONG ALL THE GREAT TV SERVICE PROVIDERS IN THE USA, as the kick back capital of the USA (recall our recent/infamous Boxing Decisions), LAS VEGAS OFFICIALS long ago found a way to keep EVERY OTHER PROVIDER out of town except COX.

 

It is indeed difficult to say whether the masters of their art award should go to Cox Execs or to Town Officials.   Should the master giver or the master givee get the award for working the longest running, biggest  BS Franchise rip off in the USA!! 

 

Jun 23, 2012 10:08AM
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How about getting rid of TV altogether. There is absolutely nothing on TV that's worth watching. If I want reality, all I have to do is look around. It's everywhere! I haven't had a TV in over ten years. I started volunteering more, reading more and spent time with friends and family. These so-called 'stars' wouldn't be paid such ridiculously high salaries or get to flaunt them in the faces of those who can't find work and are struggling daily to put food on the table. TV is a time waster.

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