Thursday, August 8, 2013

Price Sensitivity

As I was reviewing my Direct TV bill for July, I found the classic "renewal" of subscription technic used to keep customers. 

In this case it applied to the NFL Sunday Ticket portion of the bill - getting all the NFL games starting Sept. 8th.  When I "subscribed" last year, I'm sure they told me that my subscription would be automatically renewed (at whatever rate they felt was the "going rate".  Consequently even increases required no proactive approval.  At great scam for those who do not diligently monitor their bills.

So this year the increase was 13.65% (from six payments of $32.99 to $37.49).  That is some hefty inflation rate!  Last year we really didn't take advantage of the package so consequently I called to cancel.  Interestingly, the Rep asked if I would be willing to answer some questions - naturally I replied yes.

"Would you be willing to pay $32.99 for six payments" she asked?  Thinking I heard the question wrong, I said but the payments are $37.49, last year it was $32.99.  She replied yes would I be willing to keep the service for that price?   I hesitated but said no.

"Would you be willing to pay $29.99 for six payments" she asked?  Now I got it.  They are finding out my price sensitivity for cancellation (if price was the issue).  I hesitated longer (I wonder if they capture that data also).  As I pondered this new price point, I now wondered if another offer would be extended.   I replied, NO.

Angela then said she would go ahead an process the cancellation (and credit for the July bill).

In today's high tech and highly competitive marketplace, it is critical that you know when your contracts end (or renewals begin) and make sure you review other providers.  Prices are all negotiable. 

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