Why it pays to negotiate for your utility bills
British Gas, one of the traditional ‘Big Six’, has announced that it will abolish its Standard Variable Tariff.
For those unaware, the SVT is essentially the default tariff that customers are likely to have if their current tariff has expired or if they have little idea on how to seek a different arrangement. As a catch-all offer, It’s not good value in comparison to other, more individual tariffs.
In a perfect world, none of us should be on an SVT anyway. We should be shopping around, looking at comparison sites, and not just maintaining the status quo. Looking for the best option should be the number one priority for gas, electricity, broadband, line rental (landline and mobile), and other utilities. The good news is that you can negotiate in a similar fashion for all of them.
Firstly, before negotiating, you should arrive armed with information on other offers. A price comparison search should be the first port of call, so that you know what other companies are offering. Shopping around should really apply to anything that can be attained from multiple providers, from loans and insurance to mortgages and credit cards, all of which can be viewed through portals such as Know Your Money.
You may see something you love and instantly decide to change over – often you don’t even need to notify the company you’re leaving. However, sometimes you cannot just simply swap to another provider easily, or out of loyalty you don’t want to leave, and in those instances it’s time to negotiate. A particularly good time to call is near the end of your contract, when suppliers will know that you’re serious about moving.
Firstly, know what you want before you make the call – if you can’t negotiate a lower price, can you instead get a lower term, or freebies? For example, if you’re staying with a mobile phone insurer, can you get insurance, or a case, or speakers? If monetary savings are your sole ambition that’s OK, and certainly better than having no idea. Be prepared to cut out any channels you don’t want and services you don’t need, or alternatively combine services (eg gas/electricity) for the best deal possible.
Don’t email or tweet a company to ask for a lower deal – the company won’t be allowed to do it, and in any event it’s quite impersonal. The telephone should be your best weapon, because the company employee has nowhere to go. They can hear your emotion and your manner and might be more sympathetic.
The first offer may not be what you’re looking for, but don’t give up yet – instead, say that you were looking for something lower, at around £XX a month, and see if they can accommodate you. Some negotiators believe that you should never go for a service that includes a minimum-term contract, although that’s up to the buyer.
Threatening to leave can work; you might be passed on to another department. Do not swear or become personal – this benefits no-one and you will regret it. If you’re not happy with the conversation, politely move on and say that you will look elsewhere. You can always phone back later if you change your mind.
One last thing; actually, cancelling can work; anecdotal evidence from consumer websites reveals stories of satellite/broadband companies ringing customers up who have recently left, offering them 30%, 50% and even 60% discounts.