It's also possible, though, that companies are inadvertently training customers to be "bad customers" with the games they play around retention.
Consider the example of the AT&T customer in the article. The agent said there was "nothing she could do" until right up to the moment when the customer was switching. It's now common knowledge that this is basically the best way to get a deal, so many people skip the whole "Can you please give me a discount?" and instead go straight to the combative "Just close my account" first, as that's often the only way to get a deal.
This exact thing happened to me yesterday. Was trying to get Verizon to reverse a recent $20 rate increase due to a "customer loyalty discount" that automatically got removed.
I spent 47 minutes going around in circles with the rep, politely explaining that I did not wish to change my plan, or even get my bill lowered to the current promo rates which are about $30 less than what I'm paying for the exact same service. She would not budge, and offered me all kinds of crappy options such as entering into a new 2-year lock in contract, or removing ALL HD channels from my TV lineup.
Finally I threw in the towel and said, "I guess I just have to cancel this, I'm sorry". She immediately said, "Wait, let me see... hmm, Ok yes there does seem to be an offer here where I can extend your loyalty discount for another year. I'll go ahead and do that." Magic. Just like that.
I asked her why we had to play an hour long cat-and-mouse game to get this done. She had no explanation.
Seems like it's another form of price-segmentation. Just like some people take the time to cut and collect coupons, some people will spend the time on a 20 minute hold to spend another 20 minutes wrestling with a disempowered customer service representative, to spend another 10 on hold, to spend another 5 with the "supervisor" who is allowed to finally give you the proper rate.
Some MBA bean-counter types figured out there is money left on the table, and the relative hit to reputation and lost customers comes out to less than they gain by doing it.
Behaviors like this seem to mostly come out of companies with only a few competitors, such as telecom companies and airlines. They know they can push the limit of what people can or will pay due to lack of options.
This is literally why monopoly market power is bad.Even if you were not technically the only seller in the market, high transactions/switching costs can amount to more or less the same thing.
in some parts of the middle-east its expected you haggle to get a deal. if you don't , you arent showing respect and society expects you get screwed with a ridiculously high price.
This part of the culture boggles my mind from a distance, but I haven't experienced it firsthand. Wouldn't a side effect of this common practice be a negative opinion of merchants? Like, if you go into every shop with the implicit understanding that the merchant isn't charging a fair price, and you're going to have to talk him down, doesn't that make the merchants seem dishonest by default?
That seems like it'd bubble out and affect the surrounding communities, but I don't know how exactly. Do you have first-hand experience there?
I guess a traditional vendor will make their own products that they are selling. The marginal cost could be pretty low, and there is no fixed price put on the hourly rate of the vendor. In that case it makes sense for the vendor to sell at any price that isn't completely insulting if they have product available. It is not dishonest because there is no fixed price in the first place. But it would be stupid to sell yourself short, and that would devalue the product and insult the buyer.
That's funny, I regularly say please give me a discount or credit, politely, in person, emails or on phone. For the last four times I can remember, the CS rep was always nice and on top of that, does it.
For me it depends on the company. The large, "everyman" companies, the Comcasts and T-Mobiles of the world, have always had me dealing with a customer service representative on a script giving me friction about something that is completely within their reach, but they're made to be unhelpful until you cross some threshold. Start off polite, but the second they tell you something "isn't possible" you drop the polite tone, get stern, ask for supervisors, etc. That isn't to say swear and insult, and you should reset the politeness each time you get a new person.
In my experience anything even a little more "targeted" tends to have more reasonable customer service. I've had good customer service experiences from major sportswear brands, and we're not talking crazy high-end, boutique brands but major, publicly traded companies. That isn't to say they will just cater to your every whim, no questions asked, but if you have a legitimate grievance they will handle it without ruining your day.
Some companies care about reputation and customer satisfaction, and some just count every bean.
I have had the exact opposite experience - every 12 months I call Comcast when my 1-year introductory offer of internet service for $39.99/month is expiring and ask for it to be re-upped, as opposed to increasing to $64.99/month or whatever, and they do it with no hassling. Heck, this year the dude on the phone voluntarily gave me a better deal of $29.99/month for 12 months.
* not a shill for Comcast, just a happy customer. I tend to be extra-friendly over the phone, which maybe helps, but I have always received stupendous CS support from big corps like Apple, Comcast, Sprint, my CC companies, mortgage holder, and Amazon, to name a few I have dealt with regularly.
My experience with comcast has been extremely variable depending on where I live, and in particular, what other ISP options I have.
When I lived somewhere where the only alternative was terrible 5mbit (advertised, actually much less) AT&T DSL, they wouldn't extend any of my discounts and even when I canceled they didn't even try to stop me. They basically just told me "haha good luck, you'll be back".
When I've lived in other places where there are options like webpass or fiber, they behaved much more like you're describing.
Exactly. It also depends on your neighbors. Right now we have two relatively similar options, but for various reasons the neighbors are all the type to never switch. So, no one will negotiate and you just have to switch back and forth every year if you actually want the discount.
Never works for me, but maybe you navigate the structure of the organization better? For instance, when I changed cable companies last, the ‘retention’ department stooge was dopey, didn’t know anything, and couldn’t offer anything. Whereas the sales person for the company I switched to was sharp, quick, ready to discuss options, and made me an offer.
And as I recall, I had put a block on my credit report, so it took a few calls to the sales agents to close the deal. Each one was equally willing to deal, but then again, each time I called back I had to give more to get the same deal (1 year to 3 year, 100$ product gift certificate gone, and finally no free installation—uuug! They said I had the GC, but it never showed up. I called, they stalled, whatever)
Consider the example of the AT&T customer in the article. The agent said there was "nothing she could do" until right up to the moment when the customer was switching. It's now common knowledge that this is basically the best way to get a deal, so many people skip the whole "Can you please give me a discount?" and instead go straight to the combative "Just close my account" first, as that's often the only way to get a deal.