Tuesday, March 11, 2014

[Rant] Tethered to Cable

Tethered to Cable: I managed to renegotiate my TV contract with Charter Cable, under threat of jumping to DirecTV, although I'm not sure I gained all that much. I basically got my (slightly discounted) monthly rate extended for another year, but added another movie channel, a couple of new special interest channels, Red Zone (woot!), faster internet, and was handed two extra DVRs and a new router for my trouble. Of course, in another year I'm going to have to go through it all again.

I could save a little money by going with DirectTV but only for a couple of years, then the DirectTV start-up discounts would end and I'd be back in the same boat so I took the deal for now. No contract so I can back out at any time. Expensive as it is, Charter has done a truly solid job of maintaining service. I can't remember the last outage.

It really amazes me how some industries have developed pricing models that thrust them into direct conflict with their customers. Auto dealers are the paradigmatic example. You know you are in for a battle as soon as you walk in the door. The guy you have to buy from is the antagonist. He will make you pay as much as he possibly can. He is not working with you, he is the enemy. And you have to assume that if he agreed to a deal, it was to his advantage, not yours. Another day, another salesman, another customer might end up with the same product at a lower price. There is no way to walk out of the dealership feeling positive, you have to hope that comes later when the trauma wears off and the experience of the nice new car dominates.

Airlines are not quite so awful, but they do have a similar problem. Pricing varies, although at least it is based on timing and not on you as an individual. No the big problem with airlines is that once they have, once you have purchased the ticket, you are at their command. They can jerk around your schedule, cancel your flight, switch around your seats, overbook, etc. You on the other hand, can't do anything without paying through the nose. Luggage? That'll cost you. Miss your flight? Tough luck, that'll cost you. Delay kills have your vacation? Hard cheese. Let's say you have a Sunday flight and you need to stay another day. Even weeks in advance, even if seats are readily available, if you call and ask to switch to a Monday flight they will charge you hundreds of dollars. It costs them exactly zero to move you from one flight to another, but they do it because they can. Because the nature of their relationship with the customer is antagonistic, it is to squeeze as much as they can out of you.

Cable companies are in the same boat. They offer you wonderful discounts to sign up and then, once they expire, your only hope of keeping a reasonable rate is to get them on the phone and threaten and cajole and complain in the hopes of getting something back.

All this flies in the face of everything we know about enlightened business practices, where you are told the soundest and most long-run profitable course is to build positive long term relations with your customers. This does put these folks on troublesome footing when disruptive technology comes along. True Car and the like could put the old school car salesman out of a job very quickly, and may have already. My cable company at least felt the need to do a live comparison of the price they eventually offered me with DirecTV to show it was competitive, but streaming services are coming on strong. So there is an element of risk in taking this path to revenue maximization.

Still I understand that these situations don't occur in a vacuum. There are economic and regulatory forces that push them that way. Not much you can do about it except stay keen to any alternatives that arise.

And never, ever take a job in customer service in one of these industries. It will crush your soul.