Wednesday, June 24, 2009

The Psychology of Your Rogers Bill

Here's a little lesson in what us psychology types call framing.

Suppose a company offers you the following deal on your utilities:


If you have cell phone service with our company, and you sign up for cable TV with us, you have the option to receive a 10% discount off the regular price on both bills as long as you keep both services. The only catch is that if you quit either service within the next two years, you'll have to pay back the 10% you saved.

Would you take this deal? Not so bad eh? Might as well take the 10% off. If you do end up quitting, you're just losing money that you would have had to pay anyway.

But let's say another company offers this deal:


If you only have cell phone service with our company, you are paying 10% more than the regular price. However, if you sign up for cable TV with us, you have the option to waive the 10% fee on both bills. You must also sign up for two years, and if you quit either service during that time, you will have to retroactively pay the 10% surcharge on all your past bills.

Would you take this deal? This one seems much worse. Risk paying a fee just to get the regular price? No thanks.

As you may suspect, the problem here is that both of the deals are exactly the same. They're just worded differently.  The only difference is what is considered "regular price", but of course this is a decision arbitrarily made by the company. They choose to frame the deal as saving off the higher "regular price", but this is logically equivalent to avoiding paying more than a lower price that could just as easily have been labeled "regular price."

This isn't just an intellectual exercise. The examples above come almost directly from Rogers Communications' "Better Choice Bundles" deals. My two-year agreement just ended, so now I'm being charged 10% more on all my bills. I can choose to sign up for two more years, but then I risk having to [pay back my discount / pay a cancellation fee] if I quit any service. The true value of taking the deal is somewhere between the two frames, in a cold mathematical weighing of the risks and benefits.

But I think I'll take a third option: quit my cable TV service while I can do so without penalty. Sure I'll be paying [10% more / regular price] for my internet bill, but I'll also not be paying for a service I barely use, and I'll be refusing to give into a company's cheap trick to get people stuck in their clutches for years on end. A company should get people to stay with their service by being a good service, not through financial trickery; I'll be glad to stop supporting it.

Quitting cable will also allow me to afford my sweet new iPhone.

9 comments:

Kevin said...

quitting cable was one of the best choices ever. Who needs cable when you have the internet.

Dyl said...

@Kevin Agreed. Murdoch (Fox etc) has a strangehold on satellite TV here, and there is only one company left, Virgin Media, that offers cable, with throttled broadband thrown in. Who needs them.

Anonymous said...

I did the same thing. Haven't missed it yet!
And good for you for sticking to to Rogers!
Ohh, look at you, you have an iPhone, you're so special!!!! Wanker..
Dan

sass said...

I don't have cable but I have my cellphone and internet "bundled" no idea it was only for 2 years. GROWL.

Phronk said...

Kevin: Yeah, exactly. And it's even possible to watch most stuff online legally now. (With the Bachelorette being one very sad exception)

Dyl: It sucks that it's pretty much a monopoly. Two crappy companies isn't much better than one.

Dan: Next time we meet I am going to stab you.

Sass: You can renew it after two years, but then you're stuck for another while (I think one more year) unless you pay quitting fees. Wankers.

SharkBoy said...

YEH!
Congratulations on the new iPhone.
I, who never wanted to deal with cell phones in the past, cannot live without my iPhone now.

Well... I could, but I don't want to.

shine said...

I hate companies. Period.

I'm glad someone is out there taking a stand. I have the cable, but I refuse to pay for internet I can just steal from my neighbors.

I should really make them some cookies.

AudioGeekZine said...

Ditch Rogers, you only need them so you have something to blog about. :p

I haven't had cable in over two years and I really don't miss it.

I ditched Bell for my cell phones and internet.
I'm with Koodo for phones (meh, neither recommending nor not)

I'm very happy with Teksavvy for my internet. Just $40/month. For the amount of bandwidth I use in a month, Bell would have charged me over $100 each month.
I've had no problems with Teksavvy, and they even email their customers when they expect service problems. Bell has NEVER done that.

Harry said...

Another happy non-paying customer of cable TV. We got rid of it a year ago and could care less about getting it back.

Took the money saved and invested in a faster internet connection.