Staying Ahead of the Dirty Little Secret

 

 

 

Is it possible you have $1,000 or so of hidden savings per year all wrapped up in your TV, Internet, Hosting, and Phone services combined? Yes, nestled in the underbelly of our Communications as a Service (CaaS) industry is a dirty little secret. That is the not-so-very-talked-about secret rate plan. Recently, I've seen versions of it at Media Temple, AT&T Wireless, Verizon Wireless, Embarq (nee Sprint local), T-Mobile and DirecTV. Find out how I was able to save a total of $600 in one-time adjustments and $1,720 annually...

 

 

Let's face it. It's much more profitable to maintain a customer than it is to acquire a new one. New customers want to see you work for it. New customers use competitors as a foil to get great discounts or one-time fee waivers. New customers hem and haw and expect the provider to jump through hoops to close the deal. On the other hand, existing customers are locked-in to service contracts and with the exception of attrition, just keep doling out the cash each month. Sometimes, these Ignorant Cash Cows take advantage of equipment upgrade programs or add-ons, but for the most part, they are not wooed like new customers.

 

So what's the dirty little secret? Simply put, CaaS providers hide the truth about competitive erosion, competitive containment initiatives or changes in rate structure. Sure, there's plausible deniability. You'll hear "We sent out an email." Providers seem to savor the Ignorant Cash Cows, not the educated ones. Bottom line: You are probably paying too much and don't even know it.

 

 

Media Temple is a mid-tier co-lo Internet computer hosting provider. I've been using their service (both shared and dedicated virtual hosting) for about 5 years. At one point about a year or so ago, they decided to "upgrade" the $1,500 per year premium dedicated virtual hosting offering.

 

The big change? Umm, would you believe moving from Plesk 7 to Plesk 8.6? The result? Anyone "upgrading" could now have the same service for $500 per year instead of $1,500 - and get this - for essentially the same service. Would you call a annual price decrease of $1,000 a downgrade or an upgrade?

 

Did I get a phone call a year ago about this "upgrade" (read price drop)? No. A letter? No. I found out strictly by mistake. I called sales to inquire about completely dedicated computer service. I asked about rate plans and stumbled on the fact that since I had not "upgraded" I was paying $1,000 per year too much. I was told an email had been sent out to tell users about the upgrade. I don't remember that email... Not that a single email is a good faith gesture by any means for such a vast competitive correction.

 

A senior manager sent me a note about how Media Temple shan't "force customers to upgrade" without their permission. I said: "Hey quit with all the spin about forcing me to upgrade. You dropped your price by a THOUSAND DOLLARS. How would you calling me telling me I should move over be forcing me." Please.

 

So I suffered through the day-long migration of files, re-pointing of DNS, and new IP Addresses. After four failed attempts to do the change-over and nine service calls, the transformation was complete. They pro-rated the discount back to the annual contract start date and started the new pricing as per the cutover. This only after a lot of complaining.

 

This was all déjà vu because my original upgrade from shared server to virtual dedicated server met with a similar shrug/spin. Apparently, when you "upgrade" they just keep charging you for the old server that you don't use any more. You have to go out of your way to tell them: "Oh, that server with zero traffic that's sitting idle since we upgraded? Stop billing us please." They finally made good on that. I should have seen this new incident coming. I was just an Ignorant Cash Cow.

 

Through it all, each person I spoke with was professional and acted in a customer-service-minded way. But they were mum on why they had not gone out of their way to fully explain my current options. Was this a trend in the making?

 

 

My confidence with in-store retail outlet representatives has been shaken recently. I moved from a corporate iPhone plan over to a personal plan. I was told my corporate discount would apply and that the service initiative fee would be waived. I confirmed in-store that my discount would bring my monthly down by $45. I asked the clerk if that was correct? He said: "Yes, that is correct, you will see that kick-in in the next billing cycle. And you will not see a service initiation charge."

 

So the bill comes in and what's staring me in the face? Two lines' worth of service initiation charges to the tune of $75. I called in and asked them to take those charges off. They did. I complained about how I had to make that happen and why it did not happen on its own. I got a not-too-convincing answer about how the computer system is set up.

 

Then I asked why my bill had not been discounted the alleged $45. Well it ends up it was only going to be $6 because the discount did not apply to the unlimited calling plan I was on. Only a portion of the data plan for - get this - one line, not both lines.

 

As a creative alternative, I was told there was a 2,000 minute plan for the SAME monthly charge - but that plan was in fact discountable, whereas the same-price unlimited plan was not discountable. OK maybe I could save about 19 dollars. The catch? Overage minutes at 25 cents. That meant that my savings would be eaten up in just over an hour of "going over" my 2,000 minutes. That's a no-starter. The next "discountable" plan was for 4,000 minutes at $150. My discount only would have brought me to $122 so that was also a no-starter. I was boxed in. So that's why I call this the "Impossible, Withering Discount."

 

I asked to speak to a supervisor. I told him I resented getting different stories from different employees and explained that my choice to move to AT&T along with my wife's account was based on what I was told face-to-face in the store. He told me he had the power to offer a one-time credit of $100. So I took it.

 

Both the rep and the supervisor were professional and acted in a customer-service-minded way. But there was no plausible explanation as to why I had to do the digging on the fine print and why I had to beg for fairness. I was being set up for just another Ignorant Cash Cow. A trend was afoot.

 

 

I hate paying $12.95 per day at some hotels for broadband internet service. And poking around for free hotspots is simply tedious. So years ago I opted for mobile broadband service with a little USB cellular modem for my laptop. I had to switch services a few times to find the fastest, most reliable service. I landed at Verizon Wireless. The going rate for the past five years: $60 per month for unlimited data volume.

 

I was on a roll now after the AT&T and Media Temple incidents. I figured maybe it was time to check in to what I was paying for cellular data service and whether or not I was paying too much to Verizon Wireless as well. So I tallied-up my monthly Megabyte usage statistics and did some figuring. My usage never exceeded 130 MB in any single month.

 

Off the Verizon Wireless web site I dashed. Lo and behold, my unlimited plan is no longer available to new customers. Instead, there's a 250 MB plan now for $40 and a new (not unlimited) 5 GB plan for the same $60 as what I was paying for unlimited. I called them and asked: "How long have I been paying $20 a month too much?" Since April. OK, not so bad. But how was I supposed to know that? "We announced it," the rep said. To whom, I wondered? I was just an Ignorant Cash Cow. Luckily, I was able to switch to the cheaper plan without extending my contract term.

 

The person I spoke with was professional and acted in a customer-service-minded way. But there was no word on why they did not go out of their way to fully explain my current options back when the new service was available. I mean, they have SMS messages to tell you when your bill is due. How about one that says you qualify for a cheaper plan? Yep, this was a trend for sure.

 

 

Embarq, formerly Sprint Local, does a good job as local telcos go. They are courteous on the phone, their craftspeople are good at what they do and service is generally reliable. I have bundled local phone, broadband internet, and long distance with these guys.

 

So I'm on a roll now. I called Embarq to find out if they could help me lower my communications bill each month. How about the internet service? Yep, I could go from 5 Mbps to 3 Mbps and save $12 each month. So I did that. What about long distance? I was on a $22 unlimited nationwide plan. Oh the new nationwide plan is only $14 (same as the old plan, just cheaper). So I moved to that new "plan." Between that and the internet downgrade, I'm now saving $20 per month.

 

I asked why I hadn't been informed about the new rate plan. "All you have to do is ask. We can't go telling people because of policy." I was just another Ignorant Cash Cow. This was just another validation that the dirty little secret was in fact the norm.

 

 

We moved up onto Black Mountain in Henderson a while back. T-Mobile has two or less "bars of service" here. We had to move service to another provider because of the lousy reception. Another customer who lives up on the mountain told me that you could get the contract termination fee waived if the service was spotty. Later, I would have to drag that fact out of the provider and jump through undignified hoops to make it happen.

 

I called about early service termination and the agent asked: "Why do you want to terminate service." I said: "Because T-Mobile has not seen fit to put an antenna on the cell tower in my neighborhood." She warned about the early contract termination fee. For two phones it would be $400. Knowing about the "2 bar" policy I asked "So is there any way we can get that waived?" Hemming and hawing. "Look I liked the service until I moved here and now I can't make reliable calls. " Finally the agent indicated that there might be away if I could substantiate where I lived.

 

Substantiate where I lived? It's not good enough that my bills gets sent here and I dutifully pay them? (You don't have to substantiate the origin of my check each month when you cash it right?). Anyway, the agent finally looked-up service records in my area. She confirmed most people complained about only one or two bars. Did she have the power to strike the $400 termination fee from my account? "Yes sir, I can make a note to take that off right now!"

 

Then the final bill came. There it was bold and beautiful: $400 termination fee - due in full. So I called again. "Oh no you have to go in to a retail outlet and show them paperwork that proves you live there to get that waived." So the agent with the power to heal was a poser? And I had to schlep down to the store and waive paperwork at them? How undignified. But I did it anyway. I didn't want to pay the $400. I refused to be just another Ignorant Cash Cow.

 

All of the people I spoke with were professional and acted in a customer-service-minded way. But no one could explain to me why each person I talked to had a different story or why I had to pry policy information out of people like it was some cyanide-pill-crunching secret.

 

 

There was one more CaaS vendor on my hit list. I was determined to find out if I could lower my monthly bill at DirecTV but hang on to my premier service plan. After having spoken to Embarq, I knew they had a bundle deal going on with Dish Network.

 

So I wanted to do a little homework before calling in. I learned that if you visit the DirecTV web site without logging in as a customer, you actually see the newest rates side-by-side with a comparison of all the available packages. But when you log in as an existing Ignorant Cash Cow customer? POOF! The rates are no longer visible. Only what YOU ARE PAYING is visible. Sorry but there is something not right about that practice of keeping existing customers in ignorance. That's no mistake.

 

The first agent I spoke to didn't really have much to say about my complaint of the "Magical Disappearing Rate Plans." Essentially I was asking for "the best rate available." I was told the best rate available depended on what specials were running and who I was. I said I was just a lousy $1,800 per year customer.

 

I said that maybe if I did not get a better rate I'd take the offer from Sprint who was bundling Dish Network. Apparently "Dish Network" was the magic password. I was immediately whisked to "someone who could help me with that." That someone was a guy in their customer retention department.

 

I said to the guy; "Look I'm must trying to save some money. I have options. I pay my bill on time. What can you do for me?" He said he'd knock $20 a month off my bill. I said thank you. Maybe I am now slightly more than an Ignorant Cash Cow.

 

 

There are a lot of dirty little secrets out there. You've got to watch out for yourself. Maybe I was just not diligent enough in the past. Maybe I let this go on too long. I found out it gets easier and easier to say: "Hey wait a minute. I want a better deal." Try it.

 

Most providers, especially in these hard economic times, are pleased to talk it through with you and listen to what you have to say. But it seems you have to ask to receive. Very few are stumbling all over themselves to educate their Ignorant Cash Cow customers on what better deals are out there.

 

So you have to make that happen on your own. How? Do a review of your accounts three or four times a year. Don't let it go on too long because you probably won't be able to get rate plans to go retroactive in your favor. You can get a one time adjustment maybe. You might be able to get a competitive discount. But you have to call in and ask.

 

Here's the breakdown of the dirty little secrets I uncovered and what I saved:

 

Media Temple (Fundamental Caveat Emptor)

One-Time pro-rata adjustment $100

Annual savings on new plan: $1,000

 

AT&T Wireless (Fundamental Caveat Emptor)

One-Time adjustment: $100

Annual savings on new plan: $0

 

Verizon Wireless (Fundamental Caveat Emptor)

One-Time adjustment: $0

Annual savings on new plan: $240

 

Embarq (Fundamental Caveat Emptor)

One-Time adjustment: $0

Annual savings on new plan: $240

 

T-Mobile (Fundamental Caveat Emptor)

One-Time adjustment: $400

Annual savings on new plan: $0

 

DirecTV (Competitive Containment / Retention)

One-Time adjustment: $0

Annual savings on new plan: $240

 

Best wishes and please keep me posted on how you are staying ahead of this dirty little secret.

 

 

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