Every year for the past several years, my family has gotten at least one surprise from Comcast in the form of an unexpectedly large cable bill. We pay close attention to our statements, but it can be all too easy to miss an increase in a regular monthly bill for cable, Internet, or phone service. But many of them do go up regularly, and the cable industry is especially suspect, with the average bill having risen about 8 percent per year since 2010, almost four times the rate of inflation.
Whenever Comcast raises my bill, I call the company’s retentions department and haggle for a better deal. But many people may not even realize that you can often negotiate a discount, and even those who do may detest dickering so much that they never try negotiating.
Two new businesses have seized upon this market opportunity. I first heard about BillCutterz at an Apple Store from a fellow Genius Bar patron who raved about the service. Later, I read about BillFixers, a similar service based in my home state of Tennessee, in a New York Times profile.
Both services work basically the same way: you send them a bill you want reduced, and they call the billing company, posing as you, to negotiate a lower rate. You then split the difference with the negotiating company, so if BillFixers saves you $20 per month, you pay them $10 per month.
On the face of things, these services would seem to be useful for anyone burdened with unnecessarily high monthly bills, but there’s something of an ethical quandary attached: is it acceptable for a third party to impersonate you? Legally, it’s a gray area. The Federal Trade Commission, the Federal Communications Commission, and the Consumer Financial Protection Bureau declined to comment for The New York Times. The Tennessee Division of Consumer Affairs also declined to comment, and neither Comcast nor Time Warner Cable could cite a term of service that these companies were violating.
Julian Kurland, one of the founders of BillFixers, happens to be a lawyer, and the Tennessee rules of professional conduct for lawyers prohibit “conduct involving dishonesty, fraud, deceit or misrepresentation.” However, the Tennessee Board of Professional Responsibility would have to decide whether Kurland falls under those categories after an investigation and hearing.
Personally, I see no ethical problem with using a service like this, since you are explicitly authorizing them to act on your behalf. Perhaps the situation would be less muddy if you added the negotiator as an authorized user on your account or if you signed a power of attorney form, but the gist is the same. Likewise, if I had a friend in the room who I knew to be a better negotiator, I wouldn’t feel guilty for handing the phone over to him. You may feel otherwise, but this isn’t something that I lose sleep over.
On the flip side, I find cable billing practices themselves to be unethical. Cable companies often quietly raise prices, which they can get away with, thanks to the privileges of near-monopoly status. But like bullies, if you challenge them, they often crumble. It’s a system that rewards the bold and exploits the meek. If telecommunications were truly a free market, competition would help keep prices in check, and if it were more heavily regulated, the government might hold prices down. Unfortunately, the reality in the United States lies somewhere in between, resulting in both weak competition and weak regulation.
My Experience with BillFixers — My monthly Comcast TV bill recently increased by more than $24 to $83.11 (taxes and fees account for more than $13 of that price). I had successfully negotiated it down last year, but this year I decided to see what BillFixers could do.
I chose BillFixers over BillCutterz for a few shallow reasons: the New York Times profile, the fact that BillFixers is based in my state, and a deep-seated annoyance with companies that use a “z” to pluralize their names.
Doing business with BillFixers is informal. Go to the company’s signup page, enter your name, email address, and phone number, and upload a copy of your most recent bill (you can usually download a PDF from your provider). BillFixers specializes in cable bills but also works with cellular and satellite bills. Finally, you’re asked to provide any PINs or passcodes required for telephone access to your account, and you can provide additional comments. I mentioned that I’d like a package that includes MSNBC (my current package offers only CNN and Fox News), as long as the total monthly price remained under $50.
That was it — I didn’t have to create an account or jump through any other hoops. Like I said, it’s almost surprisingly informal, though the confirmation email did mention that they’re a bit overwhelmed at the moment due to the recent influx of business, undoubtedly prompted by the coverage in The New York Times.
I waited for about a week with no feedback, after which I mentioned the delay on Twitter. BillFixers promptly tweeted back at me, apologizing for the holdup. A few hours after that exchange, I received email from BillFixers informing me of the deal that was made:
Previously, you were paying $69.90/mo (pre-taxes/fees) for that Comcast bill. After our negotiations, you’ll be paying $49.94/mo (pre-taxes/fees) for the exact same services! This reduced price will last for the next 12 months and will not require a contract!
As a bonus, we had them throw on Showtime free for the next three months. After that, it will just roll off — no charge!
Altogether, you’ll be saving $19.96/mo and will be saving a total of $239.52 over the next year!
Also, I was informed of the cut I owed to BillFixers: $9.98 per month for the duration of the savings (up to 12 months) or a one-time payment of $119.76 for the year.
I have mixed feelings about the results. Saving roughly $20 per month is good. Three months of Showtime is nice, but not a big deal. However, I was taken aback by the lack of any sort of confirmation before the deal was done. You go into the BillFixers process blindly: you have no idea what sort of deal you’ll get and you don’t know what you’ll end up owing. I suppose it’s all good, in that they’re saving you money, but it was still somewhat unsettling.
This nitpick aside, BillFixers did what I hired them to do, which was to lower my bill to under $50 per month, at least before the non-negotiable taxes and fees. However, after paying BillFixers, the savings isn’t outstanding (maybe I could have BillCutterz negotiate my BillFixers bill?). While the service is worthwhile, I think you can score a better deal on your own.
The Art of the Deal — I’m no business mogul, but I have successfully negotiated better prices for cable service and cars over the years. Getting a good deal isn’t difficult; you just have to follow a few principles.
First, always negotiate from a position of strength. If you’re locked into a contract, you probably have little room to negotiate (though Verizon once offered me enticing perks to prevent me from cancelling a contract). But if you’re free to take your business elsewhere, you have the upper hand, and knowledge is power. Study the deals offered by competitors and memorize them or write them down, because they offer tremendous leverage. In many cases, the competition can do most of the work for you — you merely have to point it out.
Let’s say that Comcast charges you $50 per month for a 30-channel package. You scout out the deals and discover that DirecTV offers a better package for $30 per month and Dish offers a similar package for $25 per month. As I’ll show, knowing that gives you leverage.
Second, you have to be willing to walk from a deal. In this case, that means cancelling your service if negotiations fail. That also provides leverage, because you have less to lose than the company with which you’re negotiating.
Third, keep deals as simple as possible. My Internet is provided by Comcast Business, which is separate from residential Comcast. I’m also locked into a contract with Comcast Business, which prevents much negotiation there anyway. My phone service is through Verizon, so I don’t worry about losing my phone if negotiations with Comcast go south. If I choose to walk away, all I lose is TV service until I call a competing provider. Fortunately, there’s a lot more competition in the TV market than the Internet market.
Another reason to keep deals simple is that it makes it easy to check the math. Car dealers have a device called a four-square worksheet that they use to beat you at deals. Let’s say you negotiate $2,000 off the price of a car. You’d feel pretty smart, right? But then the salesman may quietly bump up the interest rate of your financing or lower the value of your trade-in to compensate. You can still win in such a deal, but you’re at a disadvantage. Cable companies do the same thing by bundling TV, Internet, and phone service, which makes it much harder to walk away. You often don’t have any choice but to bundle Internet and TV, in which case you work with what you have.
Now that you’re armed with competitive information, call your cable company and tell them you want to cancel your service. You’ll be transferred to the retentions department, if you’re not speaking with them already. Their job is to do whatever they can to keep you around as a customer, and since the margins on cable service are extraordinary (Time Warner Cable’s profit margin on broadband is a whopping 97 percent!), they have a lot of room to make you happy and still turn a healthy profit.
When the retentions agent asks why you’re cancelling, tell the truth: the service costs more than you wish to pay. If your bill jumped up recently, be sure to mention that as well. Be firm, but polite: make the agent happy to help you. In any good deal, you want both parties to walk away happy, even when the other party is representing a faceless corporate behemoth. Yelling or being irate will only work against you.
The agent will likely counter with a better offer immediately. You may be tempted to take it, but politely decline. You may be surprised at how long you can keep this going and how quickly they counter. When the time comes, mention competing offers, starting with the worst and working your way down. Let’s say Comcast knocks $50 down to $40, but I still insist that’s too high. They offer $35, and at that point I mention the $30 DirecTV deal. They match it, and I say that’s good, but Dish has a $25 package with more channels. That’s what I did the last time I negotiated with Comcast, and I knocked a $60 rate down to $20.
It can be tough to know when you’ve won, but I usually don’t settle for anything less than my opponent undercutting their competition. If Dish’s deal is $25 and Comcast is offering $20, I know that I’ve probably reached the end of the road. But if you’re unsure, don’t be afraid to gently push a bit more — just be honest, polite, and respectful as you do so. The worst they will do is say “Sorry, we can’t go any lower.” It’s not in their interest to cut your service, because it costs them significant money to acquire a new customer, so if you’d like to try again, tell them you’ll think about it, and call a different agent later.
In a competitive market, negotiation is easy. You don’t need the heart of a lion, psychological gimmicks, or a thousand-dollar suit to win a negotiation with a telecom company. A phone, a bit of knowledge, and polite honesty are all it takes.
Savings as a Service — While I believe that anyone can score a good deal, I can understand why you might be hesitant. Maybe you don’t like to haggle or you just don’t have the time. In those circumstances, I recommend checking out a service like BillFixers. As the late comedian George Carlin was fond of saying, “If you can’t beat them, arrange to have them beaten.”
I’m sure these companies have drawn the attention of cable executives. At some point, I fully expect to hear about lawsuits and lobbying for regulation to protect the industry. Instead, I would suggest a better path for the cable companies: stop playing childish pricing games.
Unless you’re a new customer, it’s almost impossible to discover package prices on Comcast’s Web site. Ordering services and haggling for deals is a byzantine process conducted over the phone. I can sign up for HBO NOW or Netflix with a few clicks, and I’ll know exactly what my bill will be, and everyone pays exactly the same rate. By comparison, calling Comcast to sign up for HBO is a nightmare.
It doesn’t have to be like this, even in the telecom market. Verizon Wireless used to be as bad as Comcast in this regard, but the company has learned its lesson; the Verizon Wireless Web site is now clean and simple, and its new contract-free plans are easy to understand.
Instead of panicking over inevitable market forces, cable companies should reposition themselves to be more customer-friendly with a few simple steps:
- Charge a flat rate for services, and treat everyone equally.
- Publish prices for all customers.
- Make it easy to add and cancel services online.
- Inform customers when rates will increase and explain why. For instance, if Disney suddenly demands an extra $0.50 per month for ESPN, keep the customers in the loop.
If cable companies didn’t have the market protections they currently enjoy, these suggestions would be standard business practices. The fact that I’m even writing this article is evidence for why a number of the most hated companies in the United States are in the telecom sector, with Comcast high on the list. Current profits aside, earning customer loathing is rarely an advisable long-term strategy.