It has finally dawned on me how all Utility and personal service providers employ pricing models. I always suspected this, but never did my my homework enough, or tested it… until now.
What am I talking about? I am talking about your monthly utility service providers for services like electric, phone, internet, cable, and storage.
The service providers offer a promotional rate to sign up with them as a new customer. After the first year or the promotional term ends, they then slowly start to raise the rates thinking that you are too dependent on their service, or not inclined or too lazy to switch providers. This I realize happens time and again with all types of service providers.
A trick to saving money is too have the resolve every year to switch providers. Doing this allows you to maintain promotional rates with your new provider. One thing I now believe is the following. Lets say you have been with your electric provider for a few years. They are now charging you 2.5 cents more than all the other promotional rates on the market. On the very next day after cancelling your service, you would be a new customer, and eligible for a new promotional rate.
What I am suggesting here is that after being away for a year from your last service provider, you can go back to them and be eligible for their current promotional rate. In other words, you do not have to leave them permanently. What you do need though is to muster the resolve every year to change providers.
For example, my phone and internet service is with AT&T. I was paying $89 per month for 6 Mbps Internet and land-line phone service. I cancelled my phone service by changing it to a VoiP Provider (see post below). Consequently, this action also cancelled my internet service, which effectively cancelled all of my service with AT&T. So now, I have setup a new order with AT&T: U-Verse High Speed Internet without phone or TV. Now my monthly bill is $36 with a one-time equipment charge of $100. So, over the next year one bill will be reduced to $36 from $89. After one year, the promotional rate ends and my bill changes to $46. Still this is an improvement over $89.
The $100 equipment charge is for a new modem/Wifi unit. I did not want this since I already have a DSL modem. I was not able to opt-out of the new modem. Well, it is newer technology. So, I guess I have to upgrade.
One thing I noticed about this is that the very next day after cancelling my service, I was eligible for the promotional rate. In theory, you could cancel your service, live without service for a week or so, then re-apply to get a promotional rate. I would recommend applying online for service since promotional rates exist there. Applying online seems to be more reliable than applying over the phone. I would only suggest engaging in this sort of activity if you feel like you are paying way too much over the course of many years with the same service provider, AND you can live with out service for several business days.
