About a month ago I was installing a new dishwasher and I was using Tag’s cell phone as a flashlight. Being the handyman that I am, I got water all over the place and it destroyed Tag’s phone.
We had been talking about getting on the same cell phone plan for a while, and my little mistake made “someday” become “today”.
I had dropped my phone in the toilet a few weeks earlier (oops) so we both needed new cell phones at that point. We decided to spend a Saturday shopping around for new phones at the four big companies: AT&T, T-Mobile, Sprint, and Verizon.
Four Companies, Four Options
Our first stop was at AT&T and they were offering a promotion for buy one Galaxy S3, get a second for $100 off. We weren’t thrilled about the plans, but we had our first option.
Next we went to Sprint. They had a little bit cheaper plans but didn’t have the phones we wanted at the right price.
Third we went to T-Mobile. At this point we had the brochures from the first two places in our hands and we were comparing the T-Mobile plans to the other two right on the spot. We didn’t like what T-Mobile had to say but they did offer us a $50 discount if we signed a contract that day. They knew we were shopping around and they wanted to stop us from looking elsewhere. Of course we still left.
Finally we went to Verizon. Their plan was better than AT&T and about the same as Sprint (after my company’s corporate discount), and they did have the phones we wanted but they weren’t on sale.
Make Them Compete
Instead of just picking the best option and going with it, we wanted it all. We liked Verizon the best but we didn’t like paying full price for two phones.
We told them that if they could match the AT&T promotion ($100 off) then we would probably choose to go with them. The salesman said he’d have to talk to his manager.
We left to think things over and the Verizon salesman called me back and said they wanted our business and they were going to match the AT&T promotion. (You can find Verizon Coupon Codes here.)
We saved $100 just like that.
Competition is Good for YOU
I guarantee if we had just gone to Verizon and said we wanted two phones that they wouldn’t have even considered giving us a deal. They don’t make money by handing out deals when they don’t have to.
The only reason they gave us the deal is because we asked for it and we were willing to go elsewhere if they didn’t match it.
Don’t be afraid to let companies know that they need to compete for your business. I used to think it was an insult to tell one company that you are also considering another. Now I’ve realized it’s just honesty and it’s good business.
Companies know they are in competition for your business, and they all want to win. If you give them a path to the finish line (give me this and I’ll pick you) then there’s a good chance you’re going to get it.
Readers: How have you pitted one company against another to save yourself money?
Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
This works with a lot of different types of companies. Cable, car dealerships, cell phones all seem to work. Heck, it can also work with getting a job if you can get multiple offers and get them to start competing against one another for getting you on board.
Oh, yeah… In NLP terms, that’s a game called “Let’s you and him fight.”
I have had numerous occasions with various companies to get several vendors into a race to the bottom. It was usually quite entertaining from my standpoint, and probably painful for the vendors whom I suckered into it.
This works best when you have multiple companies selling some commodity item that is basically overpriced to begin with. Like cellphone service.
That is a good idea. There are actually companies, not just phone carriers, who would match the price of their competition. You get their products or services, and they get a costumer. It’s a win-win scenario. The customer gets what they want and the company gets a customer.
Sounds pretty solid since you ended up with the better (in my opinion) cellular network for the price you were comfortable with. Did you go to a Verizon corporate store or was in an authorized retailer? I am just curious because ancedotally I have found the authorized retailers seem to be more flexible in making deals and getting customers signed up.
I have no idea. It seemed like a Verizon corporate store but I can’t be sure.
True that! Also, if you ever get crazy charges on your cell phone, even if they are legitimate (I once forgot someone didn’t have t-mobile, and thus our calls weren’t free, and I ended up with a $500.00 cell phone bill) you can call and they will usually work things out for you. Sometimes they can backtrack your plan to lower your bill. It never hurts to ask. Cell phone companies have to work for their customers these days. I really like T-mobile, although many people don’t.
Every single time I decide to re-negotiate my bills, I do this. Companies expect it. As long as you are equipped with some solid research about the other company’s promotions/prices, you have a solid case.
Hey just found my way to you site today (to download your budget excel sheet) and I like what I see. I’m a financially clueless 25 year old, with a tiny bit of student loans, and carrying a balance on my one credit card. I plan to turn that all around in the next year, and you can be sure I’ll be seeing what advice you have to offer regarding that. As for cell phone companies. One thing I have done in the past: I wanted a new phone, and my 3 year contract was only 1 year up, I wanted that phone for free. Call customer service and told them I’d happily break my contract (200 dollar pay out, cost of new phone) and head over to the competition for a new one (in canada it’s pretty much rogers and bell) they quickly transferred my call to customer retention who gave me the free phone no problem.
I’ve done this a great deal and usually save serious money. A great example is my latest motorcycle. I sent email Request For Quotes (RFQ) with specific details of the configuration I required to several dealers for a certain bike. By getting competing bids I was able to save over $3,000 on a brand new motorcycle!
Another little hint for you on your cell phones. While this is probably too late since it looks like you made a commitment already, I’d strongly recommend next time considering a prepaid provider like Virgin Mobile/Boost/Net10/etc., over any of the big carriers you mentioned. Note that each of these prepaid providers leverage either Verizon/Sprint/T-Mobile networks to provide signal so you get the same awesome signal you would with a big carrier.
While you can’t get the very latest and coolest phone you can get a phone that everyone thought was the latest and coolest just 6 months ago. You can generally get that phone for LESS than they paid with a contract plan AND the prepaid plan is NO CONTRACT, month by month AND it easily add up to over a $1000/year (yes you read that right) savings!!!!! Depending on how you configure your phone plans.
For example, for me, with just a basic plan at Virgin that I have with a Samsung Galaxy II I spend $900 LESS a year than I did on Verizon. And I get unlimited data and text – none of this 2GB limit crap. Some folks say but yeah I have to buy the phone with them. Well, if you compare you’ll find you’re usually paying less than most folks do when they buy it with the plan. Even so, that purchase is minor compared to the overall total savings.
To save minutes easily I combine using my Virgin phone with Google voice. Google voice has so many great features I’m amazed anyone has a landline or still gives anyone their cell number any more. Works as the perfect combo with my cell and if I decide in three months a new prepaid carrier has a better deal I just switch and enter my new cell number in Google voice and viola I’m getting calls on the new phone still using my old number. Life is good and I saved a whole pile of money! ; )