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Never Pay Full Price When Better Deals Exist - SimplisticSaving.com

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Never Pay Full Price When Better Deals Exist

How often have you seen a great deal offered, but you are ineligible because it’s for new customers only?  Many companies offer special deals to new customers while existing customers are left high and dry.  Obviously companies have an incentive to offer new customers better deals to get them in the door.  You are a paying customer already and they have already won your business.  If they can make hundreds or thousands of dollars on your business what could possibly make them consider cutting their income in half?  As a customer your biggest asset in a negotiation is your loyalty and ability to go elsewhere.  You should evaluate the money you spend and value each service based on its individual value to you.

Anyone who has read this blog before knows that my philosophy revolves around maximizing value.  I believe you do this by buying quality products and services at prices which are in line with your individual valuation.  This is an even better proposition when you can attain these things at below their value. Suze Orman will chastise her callers for making small expenses that they “can’t afford”.  I prefer to think about how this item fits into your lifestyle.  If it is something you will use often it is a better investment than something you use rarely.  The personal aspect of the valuation is important because no matter how inexpensive an item is it’s not worth it to you if you do not have a use for it.  If you do not own a TV, computer or smartphone then a subscription to Netflix would be a terrible investment, even thought I find $8 a month to be a great value. Other times services are nice to have, but only when the price is right.  A service that fits this criteria to me is Sirius XM satellite radio.  I am a subscriber, but would never pay full price because it’s not worth much more that $10 a month to me.

So how can I use the fact that I enjoy the Sirius XM service, but do not find value at full price?  First off, I know that there is no way that I would pay more than $20 per month for Sirius XM.  I purchased a radio last Christmas for $30 (currently $70 at Best Buy).  In January I called to connect the radio and told them that I had gotten the radio for Christmas (didn’t mention I had purchased it for myself).  I told them that I had seen good sign up deals online, but did not have any code.  I have found that they are really good at offering a deal to a new subscriber.  They signed me up for 6 months and told me that on the July 24th my contract would automatically renew at the going rate.  After activating my radio I got off the phone and put a reminder to “Call and Cancel Sirius XM” in my calendar for July 24th.  Today, my new bill posted for $127 for 6 months of XM Premier (the package including Howard Stern).  This works out to over $21 a month for satellite radio which is far beyond my personal value.

I picked up the phone intending to cancel my service because there is absolutely no way that I would even consider paying 21 bucks per month.  I gave the operator my account number and told him “I’d like to cancel my service please”.  He said, “OK sir, I can help you with this, but can I first ask you why you want to cancel?”  I told him the truth, that I enjoyed the service, especially Howard Stern, but the price was more than I would be willing to pay so I would like to cancel.  I was sure to mention that the price was an issue and that I loved Howard Stern because I did not want to be offered a lower price on a lower plan.  He then looked at my account and said, “You’re paying $127 for 6 months which is $21 a month.  I am authorized to offer you two options:  I can change the term from 6 months to one year for the same price which reduces your price to under $11 a month or I can offer you 5 months for $30 which is $6 per month.”  I told him I would take the $30 for 5 months.  He let me know that on December 24th my account would be auto-renewed at regular price.  By accepting a 5 month contract I take the risk that when I call back in December that they will cancel me, but since I am willing to cancel then they can either make a few dollars from me or zero dollars, it’s their choice.

This is not a method that only works for XM.  I successfully called and got Time Warner to reduce my mother’s bill by $20 a month while throwing in an extra box and adding HBO and Cinemax.  Just be aware that the more competition that exists makes a better environment for the consumer.  Personally, I had to beg Time Warner to add me as a customer because the options in my area are very limited.  However, the customer service people you talk to will likely know nothing about your area.  When I called for my mom I just told them that I “would like to switch to AT&T Uverse, because their service is a better value”.  This was true that I would like to do that, but the reality is that AT&T Uverse are not available in our area.  He put me on hold for a few minutes and came back with multiple offers all were significantly cheaper and provided more services.

Just remember that it’s your money and you should not be ashamed to ask to spend less of it.  Also remember that the people on the phone are people and that they like to be treated politely.  I have found you get far more by playing to a person’s ego.  Tell them that they are doing a great job and that you appreciate someone so knowledgeable about their services.    Ask for what you want and if you are not treated fairly then go to a business that will value you as a customer.

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