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"A traditional regulated service, like basic
phone service, is not something they can negotiate on," he
says. "But introductory rates of DSL -- those are competitive
and not regulated by anybody. They can charge what they want."
Do your research before you call,
consumer advocates say.
"With the spread of the Internet, price-matching
has spilled over into utilities and satellite TV. A savvy consumer
can make that work in his favor, if you're willing to push through,"
Ridout says.
"There are a lot of sites -- Fat
Wallet, SlickDeals,
TechBargains
-- and that's a good way for people looking for a cheap deal"
to find out about them, Ridout says.
Don't assume that the rate you're paying is the only
option available. And don't think that just because you're an existing
customer, you're stuck.
"Sometimes consumers can re-rate an account,"
Ridout says. "For example, many customers of Yahoo DSL were
successfully able to get that $14.95 deal, which was being advertised
for new customers. Many people were able to re-rate that from a
rate double that."
New customers usually get sweeter deals because they
spell corporate survival.
"Bringing in customers is difficult, but if you
don't, you can't expand your base," says Chan.
"A lot of the low prices are happening
when the industry is saturated," Chan says, noting that consumers
should keep that in mind when bargaining. "If they are still
growing, you need them more than they need you.
"It all boils down to demand. If demand for the
product is strong, you won't get a deal."
That's why you can get landline service so cheaply
now, Chan says.
Sometimes, the only way to grow is to entice customers to switch.
"Particularly in mature markets, the way to grow their business
is to take away someone else's business," says Friestad.
Once you have a customer with you, it's easier.
"The likelihood you can hold onto them is pretty
high, and that's why the emphasis is on capturing business.
"All this presumes that service is satisfactory.
If you're satisfied -- you don't need to be thrilled -- you'll stay.
In phone service, Internet and financial products, there is a considerable
barrier to switching. There is a lot of effort involved," says
Friestad.
Making it tough for customers to leave is part of
the strategy, Chan says.
"Companies actually try to build in inconvenience,"
Chan says. "That's because they know that unless you have a
major complaint, you'll stay."
And so, they lure you in with a cheap price and then
start looking for ways to profit.
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