Steevo is frustrated with DirecTV. He’s been a customer for about thirteen years, and for twelve of those years, he was pretty happy with the price and service. That’s because the price never changed. Twelve years in, they raised his rate. After he called, complained, and mentioned that he’d rather leave than do business with a company that hikes the rates of loyal customers because they’re loyal customers. They lowered his rate… until this month.

He explains:

I have subscribed to DirecTV since they started, about 13 years.
During the first 12 years everything was fine, they didn’t really
raise the rates and I paid my bill monthly. About $45 a month. No
problems.

In December 2010 they went up to $63, and I paid it. The next month
they went up to $83 and I called them.

It sure wasn’t lost on me that I saw ads from them for much less than
I was paying nearly every day. Clearly they were willing to sell for
less than they were charging me.

They gave me some song and dance about “Those prices are for new
customers who haven’t experienced DirecTV”. I responded “So you are
going to jack up the rates on your old customers instead?”

It reminds me of those ALLY bank commercials “It’s not nice to treat
your old friends worse than your new friends”.

I told them I cannot authorize that increase, and I only pay the
lowest rate that any vendor sells to all comers at. In fact I will buy
from someone else in those situations instead of from them even if it
costs more.

They lowered the rate and I ended up paying them about $52 a month for
the last year.

Now they are trying to raise the rates again, and they are still
advertising low rates for new customers. I called them up and went
through the same discussions I went through a year ago. While I was on
the phone with retention I read to the rep from their own website and
said “Just charge me those rates, it’s not unheard of, obviously you
have many people paying that”.

The guy asked me if I was logged in, and I said no. He said “Log in
and you can see the rates available”. A screenshot from before and
after I logged in are attached.

Their “Entertainment” package was $29.99 before I logged in, and
$54.99 after, for an 80% increase for old customers.

What does consumerist think? I feel companies should figure out what
they can sell for and sell for that. None of this finagling. I sure
don’t want to be charged 80 or 90% more than other customers who
haven’t been loyal for 13 years.

It just doesn’t seem right to me.

Steevo didn’t mention whether this phone call occurred before or after DirecTV’s public tiff with content provider Viacom became big news. That may have helped his negotiating position.

Should companies charge the lowest possible price to all comers? That would be really nice, but they don’t need to. Why? Inertia.

Companies charge what customers are willing to pay. Satellite providers don’t have monopolies, and customers have the option to walk away. Look at AOL: they continue to charge customers monthly subscription fees even if they only use e-mail, a service that the company provides for free as long as you know to call them up and cancel.

Companies know that most customers are going to stay as long as price increases are modest enough, or even if they aren’t. People who call up saying that they want to cancel are often bluffing. Some customers don’t care about price increases. Some are unhappy with price increases, but aren’t prepared to walk away. All of these people stay, and they pay more.

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