Access Switch
Published 16 years, 10 months pastOr, how to not appreciate your existing customers.
Back in April of 2001, I was preparing to start work at Netscape. I’d be working from home, so I needed high-speed access, and DSL was my best option. Eventually, I decided on Earthlink. It took a bit of effort, as there were some physical problems along the line to my house, but they got worked out and once the line was provisioned (whatever that means), I was up and running. Nice speed, too.
So last week, I decided to find out how my rate—unchanged since I started almost seven years ago—stacked up to current rates. It turns out I was a bit high, paying $49.95 a month for a service that would cost a new customer $34.95 a month, once their introductory monthly rates lapsed. And I noticed that doubling my speed should cost $39.95 a month.
So I called up Earthlink to get my rates (both data speed and monthly fee) adjusted. Guess what happened? Yep: roadblocks. First I was told that those were rates for new customers. I pushed back, and was told that because I’d been a customer for so long, they were willing to adjust my rate to $39.95. For the doubled speed? Oh, no, for my existing speed. If I wanted to go to the higher rate, it would be $54.95 a month.
My pointing out that this was grossly out of line with their current rates had no effect. I assured them that I was more than willing to skip the introductory rates and just go to the base rates. Didn’t help. I could pay $39.95 a month for a service that should cost $5 less, or upgrade to the better service at a rate $25 higher than it should be.
Annoyed, I hung up and resolved to take my business elsewhere, as I’d warned them would be likely. I did some digging and discovered that AT&T/Yahoo! DSL would cost $34.99 a month for twice the data rate I’d been getting at Earthlink with no term requirements—I’m not locked into it by an initial contract. I like that. I called them to find out how long it would take, and found out that DSL service has come a long way in seven years. They provisioned the line remotely in three days, not the three weeks it took local technicians back in ’01.
So I’m up and running at 6M/768k in three days with no fuss and no term obligations, and best of all, my monthly cost has dropped $15.
Of course, when I called up Earthlink to cancel, they were suddenly able to offer me the rates I’d asked for before, plus they’d even throw in a month for free. Too late, I told them. I’d already tried and failed to get the regular current rates, and I’d invested the time and energy to find an alternative. I wasn’t going to walk away from that just because they had belatedly decided to play fair.
It still amazes me that companies haven’t figured out that customers will make tracks if they’re treated badly. And given the ease with which service can be established these days, if my new provider causes me trouble… well, I can always go elsewhere. Or even go back.
Comments (22)
I’ve been interested in switching from Time Warner’s Road Runner to AT&T’s DSL (for financial reasons). Have you noticed any cons with AT&T’s service?
No problems so far, Aaron, but it’s only been four days. The one caveat I forgot to mention is that you need to have AT&T as your local telephone service provider; luckily for us, we did. Our phone service is pretty darned reliable, so I have high hopes for the DSL.
I may have to try the same experiment in reverse (*from* the DeathStar/AT&T to…someone else), since I’m in the same situation you were (old, slow, $50/mo. service). I wonder how cooperative AT&T will be about retaining an old customer…
But this is the game that all companies play when you come to the end of an agreed contract period. My experience of this is with my mobile phone contract.
Normally over the period of the contract, prices go down or allowances go up, but my contract doesn’t change. When it comes to the end of the contract, I call to try to get an upgrade to my handset. Normally the phone company try to charge me for the handset and retain me on the current contract for another year, however head into the call with a competitors current deal and the suggestion that you may leave and you’re playing a whole different game. The company will do as much as possible to keep your business, which you can use as leverage for the best deal for the lowest price.
While this does seem like poor customer service, I can see the reasons behind it. In your case, leaving the contract running for nearly 7 years, since you were happy with the service at that price, just makes the company extra money. On top of that, if you didn’t know that you could get them to lower the price, they could keep charging you the higher price, based on your own apathy. In your case, of course, you went digging and found a better deal and left, so Earthlink lost, but had you known beforehand how the game was played, you could be paying the cheapest contract out there.
I think it’s all a bit of fun though, don’t you?
How do you feel about Proposition 13 then?
It’s all a matter of customer acquisition cost versus transaction cost for current customers. It’s a completely free market driven situation. Nothing to get all morally upset over.
Do the same with your mobile phone contract, power bills, cable TV access and anything else you can think of. Last year when i found myself single again and had to watch the pennies for a few months i called everyone and negotiated much better rates, terms and services… its easily done just needs balls :)
Wow! That’s absolutely absurd. The ISPs I’ve had in Australia were always willing to let customers switch to their newest plans. In fact, they often encouraged it. Although I’ve other problems with ISPs in the past, they were generally willing to negotiate if I pushed hard enough.
Hmm, sounds very familiar Eric – I’ve got a similar situation with my current provider. When approached for a lower usage allowance (and in theory, a lower price) – I was told that it would cost more than my current setup…to have less!! I’m very, very close to changing provider in the near future – based on my current provider’s poor customer service and absurd pricing for slower connection speeds than their rivals.
Initially, I justified paying slightly more for my current provider on the basis of having the most reliable connection service (not neccessarily the fastest) but even that reliability has got steadily worse over the past year or so. Better customer service could actually help keep me as a customer…but that just seems beyond them!
No FIOS available? Verizon is promoting it heavily here in NYC, but everytime I’ve checked for availability it’s not available in my area. The frustrating part of this is that when they were first rolling out FIOS, they contacted me as a potential customer and I passed them onto my landlord to make it happen. Something didn’t click and now it seems to be out of reach. (Why do I suddenly flash on “Faster, Pussycat, Kill, Kill”?)
Now if only ATT would allow you to subscribe to DSL without a landline… As an employee for a state university, I get RoadRunner at a discount. But, Time Warner’s service is so horrible that I would gladly pay a few bucks more for someone else.
Based upon the experience of several family members, ATT seems to be fairly responsive to service issues. Hopefully that standard holds true for you as well.
We had a similar experience with a satellite TV provider. They wouldn’t work with us, so we left for better a better deal from our local cable provider. A week later they’re calling us up begging us to come back. We said “screw you” on principle alone.
Like Patrick said, the only real problem I have with AT&T is that they require you to have local service with them to get plans with decent speeds. I use Vonage for my phone service since I get/make a lot of phone calls to Canada, so the AT&T local service is unnecessary for me. They’re required to offer dry loop service by law (a requirement that was imposed as part of a merger agreement with the government), but last I checked it was $19.95 for 768Kbps down and 128Kbps up, which isn’t even really competitive with their other plans, and could barely run Vonage while doing anything substantial on the net. They don’t go out of their way to advertise the dry loop service either.
As far as service goes, I’ve been extremely happy (other than the fact that I can only get 1.5 Mbps at my current address…I’d prefer faster). Very little down time or service issues, and being able to pay month-to-month without a contract is nice. Pings are also very low if you’re a gamer and care about that sort of thing. =)
My ISP in Australia would’ve automatically upgraded me to ADSL2+ at a plan costing the same as my previous plan with no intervention at all from my part. As it turned out, I contacted them before the automatic switch and now I’m paying less than I was before for the same download limit and much faster speeds!
With the exchange rate, my ADSL costs almost exactly the same as yours… for a grand speed of 512k/128k (shaped after 5gigs).
6M/768k? Sigh.
(should have mentioned, I’m in Australia; next to the Sydney CBD)
Eric,
I have had AT & T DSL since it was Ameritech – 3+ years now. Not to jinx myself, but my service has been faultless – like my phone service — except for one incident caused by a contractor running new sewer systems – who cut through the buried line. It was fully repaired in 2.5 days, but they ran a temp line within about 6 hours of notification. They didn’t just patch the busted buried line, they replaced the entire length to the box – about 400 ft – including under a road. To me – that was great service!
I started with the 384/1.5 service and bumped up to the package you are on about a year or so ago. The upstream speed is as advertised – I test using variety of services on web 3-4 times a year and it always matches or exceeds the 768. The downsteam speed is not as advertised… I consistently get 1.5ish speed – but have never seen 2, 3, or 6Mb.
I am 4500 ft from central office (well under 3 mile distance). In fact, as crow flys I am actually about 2500 ft from it. Of course, there are a few twists and turns to get the line here.
Perceived net speed is great. Uploads to my site are just fine and occasional downloads – e.g. MS Office 2007 – took a few hours but I had no breaks in the download and was even online a couple of times during that download.
FYI – I have read that AT & T has agreed to “naked DSL” – a service without requiring being a phone customer – but there are caveats… At present – I don’t see the point…
RE: calling for price adjustment
After my first year on intro rate – the price was going to go up. So I called and suggested that I would move to another service vs. paying the higher rate. The customer service person agreed to a $5 increase and shift to next higher speed at the time. Win-Win
My only other option is Comcast – $20-25 more in price and given the outages we experience in the cable TV service – it would be a significant downgrade – even over the marketing hype of the speed difference.
From my point of view – you made a good move – until “real high-speed” service (50Mb+) becomes available…
I so know your pain. After being a loyal Time Warner customer for 10 years (Road Runner and cable), I asked for a reduction in rate when I recently changed location. Between internet and cable I was paying $50 more/month than someone who signs up today.
The first level customer service gave me the normal line of crap that everybody pays the full amount after their promo period elapses (funny, but their site now doesn’t even mention that the bundle deals are only good for 12 months). I said thanks, but no thanks; I’ve been getting the shaft long enough, I’m gonna terminate all my services.
That sent me over to the ‘cancellation department.’ I relayed the same story to another agent and without ANY arm twisting they immediately cut my bill in half for 12 months (~$500 savings for the year) to keep me as their customer.
I understand everybody is in business to make money, but overcharging your customers until they call you out on it just rubs me the wrong way. Looking forward to haggling with them again next year when my rates adjust back again. Argh.
The situation is the same in the UK too. One day these companies will realise that the offers they are willing to make to potential customers should be equally used to retain current customers, as these are the bread and butter of their living.
Pingback ::
Trevor Davis | Blog » Weekly Link Round-Up #13
[…] Access Switch […]
Pingback ::
What has your web host done for you lately. | www.keepingupwithjonesy.com
[…] out that same door, and telling the people waiting in line just how bad the company really is. Eric Meyer’s has a great story dealing with a similar […]
Nice comments. I have found this to be incredibly true for so many products offered by so many companies connected with telecom, whether it is a home, business, or cell phone, whether it is with ISP’s, it just doesn’t matter.
In fact this type of attitude and customer treatment has been going on in these industries that move communications through wires for decades. It is sort of good policy to review pricing once a year.
I just had the same conversation with Earthlink. I’ve been checking out AT&T and the only thing that is holding me back is the dang email account. I have my domain for business, but the family has been using the Earthlink email account since 1993, when their headquarters were down the road from me in Pasadena. Maybe I will try the cancellation department to see if I can get the speed at the new customer rate!