Yellowstone Financial, Inc.

Sometimes Quitters Get the Best Deals

It would be easier if the companies that have been in our lives for decades reciprocated our loyalty by treating us better than a brand new customer.  More and more we’re seeing the opposite.  Companies compile data on us from internal and external resources to determine how price sensitive we are, and then can use that information to differentiate between the loyal customer willing to pay more and the shopper willing to walk to get a better deal.  Here are the areas I’ve found where shopping can pay the most.

Pay video and internet.  Let’s start with perhaps the most conspicuous example.  I use paperless statements with most service providers, but make a notable exception for internet and pay tv companies.  It seems without warning that your bill can go up by $40 or more per month with little notice.  With auto pay, you may not realize that your rate has climbed by 50 percent.  The reasons are as numerous as buttons on your remote: your limited time offer expired, your cable box rental fee was hiked, or your local broadcast station fee increased.  It doesn’t matter why.

When your bill goes up you need to call them, talk to the customer retention department, and ask for a better rate.  You need to be willing to leave to negotiate in good faith.  Luckily there are more alternatives for you than ever.  Internet service can be purchased from your cable and wireline phone provider, and more people are eschewing home internet as unlimited mobile data plans become more common.  For video, many are cutting the cord and watching over twenty local channels using an antenna with a higher quality signal for free.  DISH, Comcast, and DirecTV compete fiercely against one another and there are more streaming options such as YouTubeTV, Hulu, and PlayStation VUE.

In your negotiations with your current provider, just make sure you don’t commit to a longer term contract than they will guarantee a fixed price for you.  For example, DirectTV has offers that tie you down for 2 years, but only gives you the good pricing for twelve months.  Never limit your ability to vote with your feet in the future!

Mobile phone service.  If you have been on the same plan for much more than a year, it’s likely you’re paying too much.  Over the last few years we’ve seen a virtual end to the idea that you sign a long-term expensive contract with a mobile phone provider, and in return receive a subsidized or free phone.  It’s a simpler game now.  You pay close to full price for the phone, yet now qualify for much lower monthly bills.

Some of the best deals can be found in the off-brand versions of the big mobile carriers.  Instead of AT&T consider the same network with Cricket Wireless.  Boost Mobile is the Sprint bargain brand, while Metro PCS fronts for T-Mobile, and while Verizon has its own prepaid brand, with generally worse deals than the other three.

I would first call your current mobile provider to see if they can lower your rate.  Before you call, you should know the offers the competition offers.  Cricket Wireless and Metro PCS both offer service to four phones with unlimited talk, text, and data for $100 a month, taxes and junk fees included.  T-Mobile offers a great plan for a household with one person 55 or over that beats the senior special at Denny’s: $60 a month for two lines of unlimited talk, text, and data.

It’s true not all networks are considered equal.  But buildouts progress every year and the sketchy service company of 2013 may offer great network coverage in 2018.  Make sure before you switch that your current phone will be compatible with the new network or that your new carrier can give you a great deal on a new one. An updated list of the best deals can be found here:

Homeowner and auto insurance. I know the story.  You’ve been with the same insurance company for twenty years and they have protected your home and car without a hitch.  Why would you change?  Insurance companies also have price optimization schemes.  Many insurance companies subscribe to services that analyze your spending behavior to determine how likely you are to shop for the best deal.  While insurance companies are reluctant to publicize this practice, insurance industry groups have admitted that it’s a common occurrence.

Before I advise you to shop your insurance (which is a good idea), we must recognize that not all agents and brokers are the same.  If you’re getting good service especially in the middle of stressful claim, it could make sense to stay with your insurer.  Plus, independent insurance brokers are not tied to one company, and hence can do the shopping for you.  Finally, there is a demonstrable difference in the quality of the claims experience from one insurer to the next.  Consumer Reports performs a regular survey on the claims experience and premiums for a number of insurance companies.  Certain companies such as USAA and Amica are consistently at the top.