Cut Monthly Costs by Asking for a Discount

by Kevin on March 23, 2009

Every single one of you reading this should follow through to the end of the post. All the way. I guarantee you that if you can simply read through to the bottom and do the steps in between, you will save money. Period.

This post is designed to help you save money on your service providers. What companies fall into this list?

  • Car and home insurance
  • Cable or satellite TV
  • Phone service provider (land line or cellular)
  • Credit card company (if you are unfortunate enough to carry a balance)
  • Any company charging you interest, annual fees, or late fees

Many speak of trying to save money on a monthly basis, but how many actually do it? Well get out of that lazy mindset and get ready to save some serious money. But only read on if you are absolutely serious about saving money on your monthly costs. If you don’t want to save money you might as well move onto the next article because you’ll be wasting your time.

You Have to Ask to Get a Discount

There’s a real shocker. Your service companies aren’t going to call you up to offer a discount. Have you experienced customer service from any major company lately? Positive experiences are few and far between.

It’s like a company adding a fuel surcharge to their prices because gas went up to $4 per gallon. But wait a second, gas is below $2 and has been for some time. Why are you still paying a fuel surcharge? Why didn’t they remove it? (Because they probably forgot about it and want more and more of your money.)

You’ve got to ask to get the reward. Sometimes it is easy. Other times it is like pulling teeth. Occasionally you will not be successful. But you’ll never know until you try.

Have the Right Mindset

You need to be mentally prepared for the conversation(s) you are about to have.

Look at it this way. You walk into a store. The smart store owner has set up his store in a way that is designed to take the hard earned money out of your pocket and put it into his cash register. He’s not doing anything unethical or immoral — he’s in business to make money, right?

He’ll put the plasma TVs or the beer or the lingerie in the back of the store. To get to these desirable items you have to walk past a bunch of other things. Things you might suddenly decide to buy. More money in his pocket.

The worst result from each customer interaction for that store owner is for you to leave without buying anything. He would much rather you come in, go to the back to drool over the TVs, and pay for a DVD or some beef jerky on your way out. He’s still made money off of you and you will probably come back.

Asking for a discount is the same idea except you’re already shopping regularly at the store. Each month your money comes in and your service goes out. The store owner is happy. Hopefully you are getting value from the service (if not: cancel!) and you are happy.

But here’s the kicker: the store owner would gladly give up 5% or 10% of the money you give him every month to insure that you’ll keep paying the rest for many months to come.

In other words, 90% of something is better than 100% of nothing. The store owner wants to at least get 90% of something (your monthly bill).

How to Ask for a Discount

Follow these steps to success:

0. List all of your bills in order from highest to lowest

The higher the bill the more wiggle room the company has to keep you. The more wiggle room = the more potential savings for you. Don’t argue with the guy who cuts your grass for $30 per month while ignoring your $125 cable bill. The cable company has more room to wiggle.

1. Have the right mindset

As we just discussed you have to be mentally prepared for these conversations. Some companies give you a discount easily while others you have to really work at it. Have a goal in mind for how much money you’d like to shave off of the bill.

2. Explain your concern/problem/complaint politely

Never, never, never be rude to the CSR on the phone. If you have a legitimate problem (my cell phone coverage doesn’t work; my DVR doesn’t record; the automatic payment system isn’t working), state your case. Have an offer handy from a competitor and use that against the company. (“I can get more minutes for less over at XYZ provider.”)

3. See what they offer you

They may come back with a nice deal — cutting your bill down 15% right off the bat. This is where you need to be careful. Do you press for more or happily walk away with this discount? At this point I would say it depends on whether or not you have a legitimate problem or not. If you are just calling in for a discount and you can get 15% knocked off of your bill… walk away happy.

4. Nibble

There is a negotiation tactic known as nibbling. That is, the person you are negotiating with agrees to concede a certain amount to you. You’re happy with this and you kind of beat around the bush for a while. They think you are done asking for any more cuts or discounts. But right as you are about to close the deal you mention, “oh, but I thought it came with…” and ask for something else in addition to that.

This may not work with highly trained and/or scripted CSRs. But in one-on-one situations it may work to get you an extra discount.

5a. Get additional discount and be happy

You’ve successfully nibbled. Congrats. Go home happy (and skip to “Don’t Stop at Getting a Discount” below).

5b. Get rejected and ask to be transferred to supervisor and/or cancellation department

Expect this. Depending on which tier of the customer service department you are talking with they may only be able to offer you certain promotions or discounts. They may claim not to have access to the others. Don’t get mad here. They are either lying to you in which case they won’t help you, or they are telling the truth in which case they can’t help you. Either way they can’t help you. Stay calm and ask to speak to a supervisor.

Once you’ve got the supervisor on the phone explain your case again (calmly). If you don’t get any assistance there, ask to be transferred to cancellations/customer retention. These folks are the last line of defense for the firm. They are the person standing by the door of the store owner’s shop. They don’t want to let you out the door.

I’ve had to take my issue to cancellations recently, but it worked. I got a significant discount on our TV bill.

In fact, I used this exact process to successfully cut $175 per year off of my satellite TV bill. All in all it took me about 30 minutes. Thirty minutes of my time to save $175 per year. Are you kidding me? If that doesn’t inspire you to pick up the phone I don’t know what will.

Don’t Stop at Getting a Discount

Now you need to save the discount you worked so hard for. The average person won’t notice the discount in the bill because they don’t have a proper budget setup. Thus they save $15 per month off of the bill, but they squander that savings on something else throughout the month. Don’t let that happen to you — setup a budget, and intentionally saved the money you just fought for.

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Nate @ Debt-free Scholar March 23, 2009 at 7:54 am

This is great! I hope to try this on our phone bill. For no known reason it just went up $10 this month. 🙁


Richard McLaughin March 23, 2009 at 9:57 am

I ask for a discount on everything. Last time I bought a car I said it was for work and asked if the salesman gave a work discount (something they do in France and the car maker may give this discount) and he said yes. Then I went into a personal discount, which we finally decided on. Then I insisted on both discounts, one from the car maker and one from the guy selling the car. Eventually he gave both, which they never do.

Just ask, it can’t hurt.

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Trevor @ Financial Nut March 23, 2009 at 10:26 am

Love it. I need to use this with my AT&T bill. 🙂

Kevin March 23, 2009 at 12:02 pm

@Nate: A perfect opportunity. I would ask for more than the $10. They’ll give you some excuse on why it went up. If that doesn’t get you anywhere I would consider canceling. Or acting like you are going to cancel. Is this landline or cellphone?

@Richard: That’s awesome! I’m guessing this was a new car? Do you find the value of a new car to trump that of a used car?

@Trevor: Get to it! Getting motivated is extremely difficult… trust me I know. But it is well worth the effort.

Abigail March 24, 2009 at 2:47 am

It’s always great to lower a bill!

I do this routinely with our internet. We started at an introductory price, and so a few months after it ended, we called to cancel and they offered us 6 more months at $22.95. Our introductory price was only $19.99. So it’s a great deal!

And the local ABC affiliate isn’t working with Dish right now, so I called up and got $5 off a month until they come to a solution.

Finally, I was a little horrified to look over our phone bill the other day. Here, I thought we were getting such a great deal. And the last couple of months we barely use long distance. (We now finally have cell phones that work in our apartment.) So in one month we had 11 minutes of talking which cost us $9 because of plan fees etc. Looking back further the cost has ranged between $8-13 a month. So I called up Qwest and they put a block on our long distance (so we wouldn’t have to pay a fee for removing the current plan). That alone will save us nearly $100 a month. The call took less than 10 minutes.

My next plan of attack is to check over our phone usage. If it’s low enough, we may just cancel it. Even if we have to go up to the next calling plan, that would be $10 a month. (We currently have two family lines on my mom’s account, since she has to have a cell phone anyway for work.) Since we pay around $15 a month, that would be an extra $60, minimum, in our pockets.

You just feel so empowered after you get a discount or pare down a bill!

TStrump March 24, 2009 at 10:01 pm

I think the name of the game is to be shameless and not care what anyone thinks.
You should see my roommate negotiate – it’s embarassing but it seems to work for him.

Russell Fascenda March 26, 2009 at 3:41 pm

I don’t think it’s true that you have to ASK to get a discount. I have received calls in the past offering discounts for services I already used.

My cellphone company called a couple years ago, they said I’m not using my minutes, so I should consider a plan that includes less in the monthly fee. Saved some money on that one. Probably extended my contract is why they offered it.

My cable-modem company called a few months back, said they could offer me higher-speed internet and combine basic cable TV, and the overall cost would be lower by about $15 a month. I’m sure they wanted me to try cable TV and upgrade, but I haven’t even connected a TV to it.

Kevin March 29, 2009 at 11:41 am

@abigail: sounds like you all are definitely on the right track and asking for a discount has paid off a lot! way to go!

@TStrump: Is your roommate over the top? How successful has he been?

@Russell: I think that is very rare. I’ve never had a company call me to let me know I was missing out on a discount.

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