Five pernicious assumptions that your service providers make about you

If you’re like me, then virtually every week brings an unexpected fee hike. Take last week, when both my cable bill and cellular bill unexpectedly jumped $20 a month. “How in the world can our service providers have such gall?”, you might ask.

Well, let me tell you how: they make five common, negotiation-related assumptions about me and you and everyone else—assumptions that the average consumer consistently proves correct. But by understanding and disproving these assumptions, you, the non-average consumer, can make life negotiable.

Specifically, your service providers consistently assume that:

  1. You won’t notice the fee increase: Your service providers commonly believe they can slip one by you—that you are one of those people who doesn’t scrutinize their statements or e-bills or direct withdrawals. Prove them wrong by approaching your bills with the mindfulness of a novice operating a power tool.
  2. You won’t have the courage to call: Your service providers commonly believe that, even if you do notice the fee increase, you’ll probably be too wimpy to pick up the phone and call them on it. Prove them wrong by putting their number into your speed dial.
  3. You won’t have the time to call: Your service providers commonly believe that, even if you notice and muster the courage to call, you won’t have the time to. This, I must say, is probably where they get the most people, stretched as we all are. But prove them wrong by thinking not about whether it’s worth your time to dispute the $20, but whether it’s worth your time to dispute the $20 x 12 months. Then multiply that amount by the number of service providers likely to jack up your fees in the near future.
  4. If you do call, a simple no will suffice: Your service providers commonly believe that, even if you notice the fee hike and assemble both the courage and the time to call, they’ll be able to dissuade you with a simple “no.” For example, “No, that pricing promotion has ended, so we can’t put you back on it.” Prove them wrong by asking a different question. For example: “Ok, is there a different active promotion that would bring me back to the same price?” (That exact question eliminated the two $20 fee hikes mentioned above.)
  5. You won’t be willing to walk away: Worst case, your service providers commonly believe that, even if you notice and call and fight for your case, you won’t walk away and go with another provider if you have to. Prove them wrong by calling with a quote from another provider in-hand. Then ask to connect with the cancellation department, which almost always proves more pliable.

In sum, your service providers are banking on your being inattentive, wimpy, busy, gullible, and certain to surrender eventually. If you want to make life negotiable, you have no alternative to proving them wrong. Unlike your service providers, I assume that you can.

Get rid of that fee! Three strategies for negotiating without power

“Fee.” The very word strikes fear, especially when we see it popping up on our own credit card, bank, or cell phone bill.

Is there any hope of eliminating a fee once it appears? It’s negotiable more often than it seems. But since the party imposing a fee holds all of the cards, making it negotiable requires knowing how to negotiate from the low-power position.

So imagine that you just received your cell phone bill. It’s true: you burned through a lot of megabytes watching Donald Trump clips, and you did exchange a bunch of text messages about the hurricane that never showed up. So a little bit of overage wouldn’t surprise you. But $167?!? Now that’s just ridiculous, and you’re calling AT&T to say so.

But wait—before you do, it’s worth understanding the situation. In particular, it’s worth understanding that you have no real alternatives. If they don’t budge, your best option is to pay the fee, pop a blood pressure pill, and fork over an early termination fee (should you decide to switch). Since that’s worse than just paying the fee, your alternatives are few and far between. AT&T’s alternatives, in contrast, seem solid. They collect either: 1) your overage fee, or 2) your overage fee plus your early termination fee. Bummer, you’re stuck in the low-power position.

But reflecting on the situation does not mean surrendering to the situation! Don’t put away your phone or stop dialing their digits. Do consider the following three pointers for dealing with the power deficit, in this and in any other negotiation when you have no options:

  • Don’t sweat it. Lacking any viable alternative, the natural inclination is to panic and wonder what could be worse. In fact, research highlights one situation that is worse: having a viable alternative that’s bad. Why’s that worse? Because people with bad alternatives focus attention on those alternatives, accepting any suboptimal offer that seems marginally better. In contrast, a complete lack of alternatives can be liberating, leading people to feel like they have “nothing to lose.” So this is the point: don’t go into the AT&T call thinking that things are just awful; go in thinking that things can only get better.
  • Make sure to make the first offer. It might seem silly to make the first offer when you’re the one begging for a fee reversal, but my own research with several colleagues shows that it’s even more important to make the first offer when you lack power. Why? Because the other side forgets about your low power when they hear your first offer. They get anchored on your offer just like they would’ve if you had lots of power, and you end up doing just as well as you would’ve if you had fantastic alternatives. So in your upcoming call with AT&T, resist the temptation to let the representative move first; replace it with a polite request that they reverse the fee.
  • Seek other forms of leverage. It’s true—you don’t have any alternatives, so that source of leverage is gone. But alternatives are only one source of leverage; another is your contribution to the relationship. AT&T may have millions or billions of customers, but they make their dollars one at a time. Most organizations are surprisingly willing to forgive a one-time oops if it guarantees future revenue. So when you make your first offer, remind AT&T that it’s your first oops, that you’ve been loyal for many years past, and that you’ll be loyal for many years in the future if they do you the one-time courtesy.

Is there any guarantee that this will work? No. Anyone who’s dealt with any corporation knows that they’re not necessarily the most rational economic agents. But by going in confident, by making the first offer, and by steeping it in the benefits to them, you’ll at least have a fighting chance at fee reversal.

Have you ever gotten a fee reversed by just asking?