It seems like EVERYONE is going in the following two directions with their service models, and both make me violently angry enough that I refuse to do business with any business that practices or enforces these. They are ridiculous and unacceptable.
Contracts, mainly re: cell phones and internet usage. I shouldn’t have to sign a fucking contract for a basic consumer good. I’m not a government agency or a corporation; I’m a sole consumer. FUCK YOUR CONTRACT. It is unacceptable to insist that I have to commit to a 2-year contract to have a cell phone or internet service with you. And I’d have to PAY YOU if I decided to cancel the plan? INSANITY. I don’t have to sign a contract with McDonalds if I want to go there for a hamburger, and as a consumer, I reserve the right to go down the street to Burger King if your hamburgers start sucking. But with all the people that I know that are stuck in two-year contracts, that’s just how it is - their experience starts to suck early on, and they’re powerless to go to a competitor because they signed that CONTRACT. This is an unacceptable way to live and do business in a free society.
Sneaky-Freaky Tiered Step-Up Payments for things that used to just have normal prices - It appears that this is the direction that most subscription-based providers are going for, whether we’re talking about cable TV and internet or even just having a BASIC PHONE LINE.
19.99 a month! For the first three months. After three months, montly price goes up to $39.99. After six more months, price goes up to $59.99.
If I go to McDonalds, they don’t have "Cheeseburger: .20" on the menu and then sell me a Cheesburger for .20 for the first fewvisits, then $.50 the next few before eventually bumping it up to $1.00. It’s a stupid, sneaky, and ultimately retarded way to do business that’s entirely predicated on tricking people into thinking that they’re getting a different, better price than they really are. When I recently looked into getting cable internet, they only listed “$29.99 a month!” all over multiple info pages, and it was only on the final “place your order” page that in .00000001 size font they explained that it shoots up to $59.99 after the first three months. Borderline false-advertising.
That’s the beauty of contracts, no one can coerce you into entering into a contract, and if you are truly coerced, the contract is void.
I suspect that the contract model for cell phone service started because of the high cost for businesses to enter the market. Now that cellular networks are in place, that business model will probably change.
Actually, this is probably a good way to do business, especially with services that have low price sensitivity. Every three months or so, you get a boost to your bottom-line, without having to do anything. As with contracts, you don’t have to choose these providers who price their services this way…
It’s true that these days most business models seem to be focused on customer acquisition not customer retention. If you move, you can get a new cable or dish company to give you new equipment for free with a lower monthly bill. Your existing company will want you to keep your old equipment, move it yourself, and charge you for the trouble. You see this over and over again in industry after industry.
The key to success is keeping your existing customers happy and making them advocates for your business, not just conning large numbers of people into trying your crappy product in the first place. Hopefully more companies will come to realize this.
It’s not the companies, it’s the idiots who go along with this crap. People have less dignity now when it comes to taking crap from corporations, and as such makes people who don’t put up with it pay a lot more. I am unhappy with every single cell phone provider, yet people like me are too few to make for a market.
For example, I will pay $100-$150 a month for two lines with
No contract
Unlimited everything including data through laptop (on a 3G or EDGE network), picture messaging, text messaging and minutes.
Phone insurance
Obviously my offer is less money because the current business model is built on per-____ fees. They sell contracts at a bare minimum and as soon as you break boundaries you get charged up the ass.
I for one, try to vote with my wallet, but sometimes that becomes so impractical that I cave in and get something like Comcast or Cingular. I still prefer not to buy products advertised with mail-in rebates or make any commitments to a service I did not try for a sufficiently long amount of time. I can understand contracts as a discount mechanism, but they should never be de-facto, or it screws a minority.
Good point. But you missed the biggest loophole in it. The cell providers almost always sell you a phone that won’t work on another network. Buy a phone full price to avoid a contract with CellularOne? Good luck using it in 6 months when you want to switch to Verizon.
Doesn’t Cingular offer a pay as you go program? No idea what the phone cost is to start, but from what I’ve seen, it looks like the start of a better business model.
My Cingular monthly bill is $150 -> $300 a month for two phones. I once added up how much it would be “pay as you go” with the same usage and it came out to be about $600-700. This was awhile ago, things might’ve changed.
You’re exactly right, because if you go to McDonald’s they don’t HAVE the price of a cheeseburger on the menu anymore, and it seems to vary between $0.79 and $1.59, depending on what part of town you’re in and, seemingly, what day of the week it is.
Pay as you go costs me less than $20 per month. I only have it to allow clients and my wife to call me.
Got my wife a two year cell phone plan with cell phone for Christmas on Dec 24th.
She opened up the gift of the phone on Christmas and was upset because she had purchased pay as you go phones for her and a daughter as well. I cancelled the contract and returned the phone on Dec 26 at the store after the clerk verified that the phone had been used.
Two weeks later I got a bill of $1.98 for “wireless services”.
These two things are not nearly as annoying as the freaking ‘rewards’ programs and special shopping cards that you have to have nowadays to get decent prices on anything.
Now I’ve got to carry around a bloody grocery card, an ‘HBC Rewards’ card, an Airmiles card, my Costco card, discount cards for every possible gas station I might stop at, yada yada yada. And of course, it slows down every purchase, because they have to ask you, “Do you have a Superstore club card? Do you have a rewards card? Do you have an Airmiles card?” Then the customer says, "Wait! I do have an Airmiles card! Just a minute… " And they go fumbling through their purse or have to ask the wife for the card, or whatever. Or even worse, if you don’t have the card you get a sales pitch for it. It’s free, doncha know. What, why wouldn’t you take a free club card? The computer says you’ll save $2.38 on this purchase with a club card! Oh, you’d like one? Great. Here, fill out this two page form while everyone stands in line waiting for you.
I hate club cards.
Then there’s lottery ticket sales. I stop at 7-11 on the way home from work to pick up bread and milk, and that’s usually about a half-hour before lotto sales close. And there are always HUGE lines of innumerate morons standing in line with sheaves of lotto tickets clutched in their fists. And what’s worse, they don’t just buy tickets any more - they bring the last draw’s tickets in with them to have the freaking clerks check if they won anything. They don’t even watch the lotto shows any more. “Hyuk, here’s the 50 tickets I bought last week. Could you please check them all, and see if I won? Oh, I won $5? Okay, could you apply that to the 50 tickets I’m buying this week? I’m not capable of doing subtraction, so you figure it out for me. Hyuk.”
And speaking of 7-11, their Slurpees are DEAD to me. The Slurpees of my youth were thick, heavy drinks just chock full of coke and ice. Now, the damned things are full of CO2. They’re a putrid light brown color, weigh about an ounce, and have no flavor. But what’s worse, the 7-11’s in Edmonton stopped making Coke Slurpees. Now it’s Pepsi or nothing. And Pepsi slurpees are gross. They’re sickly sweet even when the machine is calibrated to make them with less than 50% CO2 in the mix.
I suppose I should thank them, though. I went from drinking four or five Slurpees a week to zero.
Fuckin’-A. You now need one for every grocery store to get the “discount.” Har har.
One thing I noticed in Japan (where just ten years ago you could barely use a credit card anywhere; now it’s everywhere except mom and pop stores and restaurants; I used reguarly to carry ¥50,000 in my wallet) is that stores don’t really want to take credit cards, and they’re prevented by the card agreements from putting mins on purchases. BUT, a ton of stores now have cards for discounts (buy 10 CDs, get ¥1,000 off a purchase) BUT if you use a credit card you can’t get the card points.
I would not be surprised to see this happen in the US.
IIRC this was a major plot-point of Max Barry’s book Jennifer Government (although it may have been Syrup…) Anyway, my point is: Jennifer Government is pretty decent book, especially if you like SF and satire.
Wait, is McDonalds the new benchmark for consumer goods? Because dude, you really shouldn’t compare everything you buy with McDonalds. It’s just not right.