Online Business Blog — erica.biz — Erica Douglass teaches you how to start and grow an online business!

Six easy steps to negotiate your phone bill
and save thousands of dollars.A few days ago, my phone provider, Vonage, announced it was increasing my rate plan to $17.95/month from my current $14.95/month. $14.95/month was the lowest rate plan on Vonage’s website. The other choice was a $24.95/month “unlimited” plan, which I certainly didn’t need.

It was clear that Vonage was encouraging its customers to upgrade to its $24.95 rate plan for “only eight dollars a month!” I had a better idea.

I have had fantastic success negotiating with both cable and cell phone companies. Comcast is currently paying me to watch cable TV — I downgraded to basic cable, saving my HDTV and dual-tuner TiVo features, but my cost for basic cable is less than the 2-package discount I get by having our Internet service with them as well.

As for my cell phone, I currently pay Sprint PCS for two cell phone lines, 1000 minutes shared, 500 text messages per month per line, two data access plans with tethering, and insurance in case one phone breaks or is lost/stolen. Total cost? $67/month. (My boyfriend and I split this cost, meaning we pay less individually than anyone I know for post-paid cell phone service.)

In this article, I’m going to show you six easy steps to negotiate like a pro with your cable or phone company. All consumer cable and phone companies operate on the same basic principle — that saving a customer is better than trying to find a new one. The best thing about these tricks is if for some reason, they don’t work, you can just hang up. These companies won’t disconnect your service without you jumping through a lot of hoops, so don’t be concerned about “accidentally” canceling.

Step 1: Call and tell the prompt that you want to cancel your service.

Never call and ask for customer service. Customer service doesn’t have the power to lower your rate. Always call and ask to cancel your service. The automatic voice prompters almost universally recognize the word “cancel.” If you get to an operator, make sure you specifically state that you want to cancel your service.

Step 2: Stomach your fear and be kind.

When the rep comes on the line and asks what he/she can do for you, state “I would like to cancel my service, please.” It’s worth noting here that you should be as nice as possible. Put a smile in your voice. You want the rep to like you. They have a script, but they get personal bonuses for you to stay on as a customer. You both have the same end goal: for you to remain happy with their service and stay a customer for many years to come.

The script varies a bit here, but after confirming your account information, most customer service reps will note how long you have been a customer. The longer you have been a customer, the better. If you have been a customer less than 12 months, or are still in a service contract, odds are slim that you will get a sweet deal. If you have been a customer longer than 24 months, are no longer in a contract, and pay every month on time, you have much more negotiating power.

Pro negotiating tip #1: Always set your bill to auto-pay and pay it every month consistently to become a preferred customer.

Pro negotiating tip #2: Stick with the same service provider, using retentions when you want a better deal, instead of hopping carriers. I’ve been with Sprint PCS since 1999. The longer-term relationship you can develop, the better.

In this case, the rep said “I see you’re a long-term customer of Vonage. You signed up almost 5 years ago, in February 2004. What can I do for you today?”

Step 3: The four key words you MUST use.

At this point, you say the following words: “I can’t afford it.” These are the four words that tip off any rep that you want a lower price, not more features. What I typically say is, “Well, I’ve been with [your company] quite a while, and it’s getting tough for me to afford the monthly fee. I just can’t afford it any longer.” They don’t need a whole sob story — simply saying a form of “I can’t afford it” will trigger the correct script. Don’t threaten to take your business elsewhere, especially since you don’t plan to. Resist the temptation to justify. Just leave that “I can’t afford it” hanging out there.

They will almost always respond with “Let me see what I can do for you.”

Step 4: Never take the first offer.

Their first offer is a test, designed to get you off the phone as quickly as possible and score them the bonus. (Don’t fault them — remember, this is a script!) It’s guaranteed to be weak. In this case, I had explained I was calling because I couldn’t afford the rate increase to $17/month. The rep offered me six months of continuing the $14.95 rate.

Be polite! I said, “Hmm, I appreciate that, but that’s not really going to do it for me. I need something more permanent.” Again, no sob story, just a simple statement. That’s their signal to bring out the real discounts.

After putting me on hold for a minute (sometimes, at this point, they will pull in a supervisor, but Vonage didn’t), the rep came back with a much better offer. He said, “I see you’re only using around 100 minutes a month. We do have a special rate plan that I am authorized to give you today. [Erica's note: Those words are another cue that you're about to get a good deal.] It’s $9.99/month for 100 minutes a month. Additional minutes are 3.9 cents per minute. Incoming and forwarded calls are free; these minutes are for outgoing calls.”

I asked, “Is this a permanent rate?”

He replied, “Yes.”

Step 5: Once you get an offer you like, ask them to tweak it.

This was a great rate, and one not advertised on Vonage’s website, so I knew this was what is termed a “retention plan” — a plan designed to keep you as a customer. Once you get into the territory of unadvertised plans, you know you’ve hit gold. Now you simply ask for another tweak. For cell phone carriers, now is your time to ask for extra minutes, more text messages, or some other perk they can throw in cheaply. But with Vonage, I didn’t need any perks, so I said: “That sounds great. I’m interested. But could you get me a few months free on that? Say, 3 months?”

Most of them will chuckle at this point. They are aware by now they are dealing with a seasoned negotiator. This is a good thing; you’re developing a camaraderie with them. They should say “Let me see what I can do for you” again.

He came back on the phone and said he could do one month free on that plan. I said, “Great! That’s excellent. Thank you.”

Step 6: Thank them.

Everyone likes gratitude. Don’t forget to thank your customer service rep.

In Vonage’s case, they sent me an email confirming that my plan would be free for the next month and then drop to $9.99/month for 100 minutes/month. The total call took 12 minutes.

If I keep this plan for a year, I will save $106 ($8/month plus one free $10 month.) Based on the 12 minutes spent on the phone, that’s an hourly rate of $530 — making this strategy well worth your time to learn!

A few more tips…

• Drop the land line. There’s not a whole lot of reason to have a land line these days. Some people keep one around for E-911 service or to use during power outages, but they’re often not worth the price. Vonage requires you to input an E-911 address onto their website where 911 calls are automatically dispatched to if you call from that line. Since I only use my Vonage line at home, that works for me. If you have a landline, I’d encourage you to check out Vonage or RingCentral.
• Some carriers are tougher than others. Comcast won’t budge if you compare them to other providers, but “I can’t afford it” and then escalating to a supervisor works. To get the $67/month Sprint PCS rate, I made 5 calls and spent nearly 3 hours on the phone with 8 different representatives — 6 of whom said the rate I eventually got wasn’t possible. Was it worth the 3 hours? Yes! Over my 2-year contract, I will save over $1400 over Sprint’s posted rates for the same plan. That’s almost the same bang for the buck that my 12-minute call with Vonage provided.
• Don’t ever sign a contract without going through retentions. I’ve gotten a $200 credit, lower monthly rates, and even free or ridiculously cheap phones. Retentions is there to satisfy your needs. Use this to your benefit, and have fun with it!

Recommended Reading:

• RingCentral. Ready to drop your land line? Try RingCentral free for 30 days! You can set up a toll-free number, a local number, pr a fax line starting at $10/month. I use them for all my fax needs. My first choice for faxing and forwarding numbers.
• Why You Don’t Save Money (Even Though You Know It’s The Right Thing To Do.) Marketers are good at getting us to make emotional buying decisions. Savings and retirement accounts just aren’t as interesting.
• How To Start A Business With No Money. With all that money you just saved, how about starting a small business?

Get Rich Slowly readers: Welcome! I’d love to see you here more often! Please subscribe to erica.biz to get more free insights on starting and growing a small business and saving money.

Like this entry? You will love getting my free business tips! No spam, and I won't give your email address to any other company.

Tweet This Delicious Digg This Facebook Stumble This