Anyone with a mobile contract that's about to end (or has ended) is holstering a serious MoneySaving weapon: loyalty. Unleash it with a phone call, which could save you £100's...
It's all about an easy haggling technique to add minutes and texts, cut your line rental and upgrade your phone.
In a nutshell, if you're near the end of your mobile phone contract, simply tell your provider ‘give me a better package or I'll leave', and most of the time it will. If not, then leaving isn't a bad idea.
A story from Martin
I'm an Orange contract customer and preferred to remain one, as the connection at home and work is good, and the month-long switching hassle's worth avoiding. Yet Orange's packages aren't the market's cheapest
This is an edited version of my call or better still watch the video, showing how I once put the MoneySaving Fiance through her haggling paces.
Martin: “Hi, you have a price match promise. Three offers 500 inclusive cross-network minutes,” (ie calling other mobile networks) ”for £30/month, yet I'm paying that for just 200 minutes with you.”
Orange: (as expected) “Sorry Mr. Lewis, our price promise doesn't cover Three, so we can't offer you that tariff.”
Martin: "That's simply not good enough. While I want to stick with you, unless you can offer me something better, I'm going to have to leave."
Orange “Let me put you through to our specialist disconnections department and see if we can find any way to improve it.”
Then I repeated my request to disconnections.
Orange ‘disconnections': “I think we can help, we can match that Three tariff for the same price” (Note: Orange's own 400 min package cost £50/month.)
Martin: “That's not part of your normal price match plan?”
Orange disconnections: “Nope, it's a special offer for valued customers” (Sub-text: we'll pull out all the stops if we're going to lose you.)
After that I asked for more text messages and got a bundle on top, then a new phone and was told “what do you want, pick any?” So I opted for a snazzy, tiny camera phone, with radio and 3G – all, of course, at no extra charge.
While my story is about Orange, it works on other networks too. There are no hard and fast negotiating rules, but a bit of chutzpah and a smile (try it, it's noticeable in your voice even on the phone) works wonders. It's a game, with huge gains on the upside and no loss on the downside.
The Mobile Haggle: Martin Lewis
Video hosted by Youtube. Jan 2009 (please rate it)
Timing is everything
Aim to do this around a month before your current contract ends, as then you're most realistically liable to ditch and leave. Try it earlier and you're simply met with “you've a contract and can't cancel it”.
STEP 1. Ask for a better tariff
The first step is the easiest; call up and tell the operator you're unhappy with your existing tariff. There are two choices of argument:
Internet price comparison sites such as MoneySupermarket* or Omio* are perfect for quickly benchmarking prices. Put in your usage details and it speedily reveals the cheapest tariffs and packages available. Also worth checking is MobilePhoneChecker* and for a more detailed analysis Billmonitor* or better still read the full Mobile Phone Cost Cutting article for more cost cutting tricks.
Alternatively, to just ‘have a go'; call up and say it's too expensive. Ask what the best tariff available is, then if its offer isn't good enough tell it so. This can work well, as packages better than the best new customer versions, or special extra discounts are sometimes available if you push.
And always remember to request a better package and a phone upgrade too. If you're not given what you want - ask to leave.
STEP 2. It's all about 'customer retention'
The crucial part is getting through to what you think is the ‘disconnections department'. Actually, internally most companies refer to disconnections as a synonym to ‘customer retentions'. In other words its real job is to keep your business and because of that it has much more power and discretion to do it.
Once connected repeat your request - if you seem genuine about disconnecting (and why shouldn't you be? there are better packages out there) you should get a much improved offer matching the market's best openly available tariffs.
Are there any negatives?
This technique involves locking in to a new contract
The mobile world is fast moving, and tariffs are greatly improving, so being locked in isn't good, though it's unavoidable. It is possible to get 12-month contracts but 18 and 24-months are more common. Request to minimise the contract period.
This is a one shot deal
You only have this negotiating power at renewal. Six months through the contract, try to change tariff and you won't get the special option. Eg, negotiate the ‘Three' network 500 minutes a month for £30 deal but then decide 750 minutes for £40 is better usually it won't be allowed, even though it would've been permitted at negotiation.
Why customer retentions has such power
The mobile phone market is nearing maturity, in other words, the vast majority of people have mobiles, thus winning business no longer involves persuading someone to ‘get a mobile', but persuading them to ‘get and keep a mobile with us'. This market maturity means retaining existing customers is absolutely necessary – hence the power of customer retention departments.
It's not just mobiles you can haggle down though, there's a whole host of other things including car insurance, broadband and credit card interest rates. For more tips and tricks read How To Haggle Successfully.
STEP 3. What if they say no?
Don't feel forced into disconnecting
If you're pushing and your bluff is called with a “sorry, we can't do that, I'll arrange cancellation”, just back off. A quick “I need to think about it and I'll call you back” is an easy way out.
At this point if there are better packages elsewhere consider taking on the hassle and changing package but do it on your terms not theirs. See Mobile Cost Cutting Plan for details of how to find the right tariff. Though it's always possible that you call again, speak to someone else and get a quite different response!
As this is more of an art than a science, rather than calculating savings, I want to simply relay others' success stories. These are a few of the scores of recent feedback posts, (read others).
I phoned Orange to cancel my mobile contract, as Tesco was offering a better deal for half the cost. They put me through to retentions, and after negotiations, they offered 1GB data, 1,000 mins and unlimited texts for £16/mth - just over half of my previous bill, so I am very happy! -Kittendothroar - Mar 2013
I've just had success with O2. I probably spent three hours on the phone to them. I managed to get a free iPhone 5S and a cheaper monthly contract with a lot more data. I've saved myself £80 on the upfront cost and £5 per month. -KIELY124 - OCT 2013