How to Successfully Negotiate Your Bills
Why Should I Negotiate My Bills?
Unfortunately it is no longer the case that customer loyalty is rewarded when it comes to utility bills. In fact a major part of the business model of utility companies is to get new customers in a fixed one-year contract that is cheap before raising the prices at the end of the contract and hoping the customer forgets to shop around.
Take my personal experience, my internet provider gave me 200 mbps for £30 (~$35) per month for the first year then it would be double the price at £60 (~$70) per month thereafter. The month before the contract ended I did a quick search for competing offers and found another provider with a new customer package offering 300 mbps for £35 so 150% the speed for 58% the cost. However swapping would mean some time where I didn't have internet and unsurprisingly I am quite addicted to the internet and didn't want any downtime.
So for the rest of this article I will describe my exact experience negotiating with my existing internet provider including the do's and do not's I discovered along the way. Not only do these tips come from my personal experience but I have friends who have worked on the other side of the phone, negotiating with customers, who I asked for advice for this article.
DO NOT: Use Live Chat or Email
I learned this one the hard way after spending almost a week talking with various customer service representatives on and off via a live chat. They were constantly skirting around my requests to negotiate, instead asking if I was satisfied with the service and various other miscellaneous unrelated questions.
In my frustration I asked my friend, who at the time worked for a competitor of my provider, why these customer service agents were dodging my request to negotiate. At first he laughed but quickly realised my question was genuine.
"It's simple, they don't want to negotiate and know you will just turn off the chat eventually."
Seems obvious right? Well I felt pretty stupid for spending a week of my time on and off trying to discuss negotiating my bill with several different customer service agents. And my friend was right, every day it would end the same with me getting frustrated and closing the chat hoping the next day would go differently and it inevitably did not.
When you call it is much harder for an agent to dodge your questions or requests because it's a more direct medium of communication, not only that but it's very easy to ask for a manager on the phone and start going up the management chain until someone will listen to what you are asking for. Not only is it more direct and comes with the implied threat of asking for management it also gives the customer service less time to try and throw up counter points whereas naturally typing in a live chat is a more asynchronous method giving the agent time to come up with a way around your request.
So remember, always call to negotiate.
DO: Bring Some Data
One of the best ways to bolster any negotiation whether it be for a promotion or for a new lower priced utility package is to bring data. This was by far the most effective technique I used to reduce the price of my bills, by informing my current supplier I could get a better deal elsewhere and providing the price data for the better deal it made my position much stronger.
If you call up and say "I think I should pay less for your services" then realistically you will just be told "sorry, I can't lower prices" and that will be the end of your negotiation if you can even call it that.
However providing data of better deals from competitors comes with the implication that you know leaving would be better off for you and in order to keep you as a customer they need to fight off their competition by offering you a new deal.
Thankfully some very helpful website developers have put together literally thousands of price comparison websites where you can very easily see all the best deals on utilities for your area.
Some example price comparison websites are:
Use these websites to find if there are better deals in your area and then note down that data to be used as ammunition if your negotiation.
There is a technique under the umbrella of bringing data that I personally haven't used but friends have. If they can't find a better deal they just make one and then call up and state a salesman from a competitor came to their door and offered them an exclusive new deal not yet available online. While I cannot speak to the ethics of this technique, that is for you to decide, I can say truthfully that my friends have found it be quite effective.
The main takeaway from this technique is to have rock solid data.
DO NOT: Take The First Offer
This one is short and to the point: the first offer they give you will be a mediocre one. This offer is their way of making you feel like you got a good deal but without really giving up much in the process. My friend who worked on the phones told me they had a list of basic upgrades to offer people that basically cost the company nothing to offer and allowed them to justify an already too high price.
One of the most common strategies used by utility companies, especially internet and TV companies, is to simply add more to your package without actually reducing the cost of anything. This was the first offer I got during my negotiation:
- No decrease in cost.
- No increase in speed.
- Add in 10 free TV channels with the TV subscription service.
This was a blatantly obvious ploy to get me to believe my negotiation was successful when in reality it wasn't. I didn't even want TV but they were hoping I would walk away. Thankfully heeding my friends advice I remained calm and explained my issue was not that I need more TV channels it was that my internet speed was too expensive for what I was getting.
Have a response ready for the first offer, maybe bring up that you don't need what they are offering you and would prefer to try and reduce cost instead. Use the data you have to back up your argument and be prepared for some push back, often they will say "this is one of the best deals we have" but don't buy in to their tactics.
Never, ever take the first offer.
DO: State You Are Considering Leaving
No matter what, even if you have no intention of leaving and are just trying your luck to save some money ALWAYS state you are considering leaving your current supplier for a competitor. This often fast tracks the negotiation and friends who have been on the other side of the phone have told me their scripts literally told them to jump straight to the first offer at this point (remember don't take the first offer) or hand over to a department called "customer retention" who were authorised to start throwing deals at the caller to get them to stay.
You have nothing to lose by stating you are considering leaving, if at the end they really can't do anything and there are no better deals then you just stay with them and nothing changes but you may land the jackpot and get them to start showering you in discounts and new packages in order to retain you as a paying customer.
Like I said in the beginning you aren't going to be rewarded just for passively remaining loyal to your supplier but with a little leverage such as the implied threat to move supplier you may find they want your loyalty and payments after all.
So no matter what; state you are considering leaving.
Be Ready to Switch
If after negotiations your current provider simply cannot match one of the deal you found earlier then it is time to leave the current provider. Obviously be wary of any charges you may get if you break your contract before it is finished, although it is worth calculating if you will actually save more by taking the charge and moving on to a cheaper alternative faster.
For example if your early-leaver fee is $50 but you save $15 a month with a new provider and are leaving 4 months early then your total saving is (4 x 15) - 50 = $10. So it is worth it to leave, even if your saving is $0 it may still be worth leaving if the deal you are trying to get with a new provider is only available for a limited time.
Sometimes negotiations don't work out, not because you didn't negotiate successfully but simply because the person on the end of the phone is not allowed to offer a deal better than a competitor. It happens, so be ready to move providers.