Written by Trent Hamm, The Simple Dollar is a popular personal finance blog that chronicles one man's road back from overwhelming debt to financial security. Hamm declared the contents of the blog to be in the Public Domain in 2008 and available for sharing when attributed properly. We will share a couple of posts a week.
A few days ago, I called my internet service provider. I had an issue I wanted to discuss with their customer service people.
Don’t get me wrong – I actually really like my internet service provider. They have fast service when there’s a problem and there’s rarely a problem. The speeds are consistent and don’t vary much at all throughout the day.
The problem is that they’re expensive. Our monthly internet bill isn’t cheap. We pay for a pretty fast speed so that both Sarah and I can work while the children watch high quality streaming video without anyone hiccuping, but it’s still awfully high.
We’ve been a customer with this company since we moved to our current house in 2007. We’ve never even been late on a bill in those years.
So, what did I call them about? I simply told them that, like everyone, we’re watching our pennies and we just find our monthly bill to be awfully high. I said that I’m not looking to shop around… yet… but that a big bill every month takes its toll on our finances.
Then, I asked them what we could do about it.
The person on the other end of the line – Amy – was very friendly. She walked me through a whole bunch of options, including packages and other speeds, and eventually we decided on one that actually bumped up our speed a little bit and reduced our price by $10 a month.
Even better, she put us on the “new customer” payment for that speed, so our bill actually went down $25 per month and will stay lower for quite a while.
If it stays that way for a year, a phone call that took me 20 minutes will save us $300 a year.
Naturally, I wanted to apply this to different services that we use, so I basically called every single company that we do monthly or quarterly or annual business with. We are in good standing with each one, from garbage collection to insurance, and we’ve been customers with all of them for a minimum of three years.
With every single one, I told them the truth – though I am a happy customer, I feel like our current bill is high and I’d like to see what other options you have.
Most of the time, here’s what happens on the other end. The customer service representative pulls up your record and sees that you’re a long-time consistent customer – the kind that’s the bread and butter of the company. If they can find a way to easily retain you, they’ll do so. Customers that pay their bills like clockwork and rarely have issues are customers that companies want to keep.
Often, what those companies will do is walk you through every comparable plan that they have and help you find one that lets you keep the service you have but perhaps cost you a bit less. Some companies will move you to a “new customer” package that will drastically reduce your payments, at least for a while. This is particularly true if that company has competition in your area.
Some companies, of course, won’t do much of anything. Perhaps it’s because you’re already on their best plan. Those are companies worth noting, as it might be worthwhile to shop around for those bills.
So, what happened with us? I took notes on the results. Over the course of approximately three and a half hours, I placed eight phone calls. On average, each of those phone calls reduced each of the bills by an estimated $14 a month (the energy bill savings was an estimate). That adds up to $1,344 in savings this year. For three and a half hours on the phone – most of which I spent reading a book or loading the dishwasher while I was waiting for a customer service representative – that’s very much worth it.
A few caveats:
This works best if you have a longer history with the company. I found that companies that we had worked with since we moved in tended to be more flexible in finding us better arrangements. Companies that we signed up with later seemed less flexible. My guess is that the shorter your term as a customer, the more likely you are to leave anyway, so they’re not going to put out the effort to retain you.
This works best if you constantly pay your bills on time. We had some payment issues with one company in 2012 due to an incorrect account number on a payment. That company was the one company that barely worked with us. Coincidence? Possibly, but I tend to believe the payment history had something to do with it.
This probably won’t work very often. If you call for such changes on any sort of regular basis, the savings will see a dramatic drop. This seems like something that would work well every few years, but if you try more frequently, you won’t see gains because you’re already on one of the better plans.
Still, if you’re looking for a single tactic to save quite a bit of money, try simply calling the customer service line of businesses with which you’ve associated for a while and with which you have a strong payment history.