Keep your phone, or else.

October 6, 2008 9:30 AM

Why does my cable company (Cox) really really want me to keep my phone service with them?

Just called to turn off my phone service- we never use it. Wanted to keep internet and cable. Rep found additional "bundle" savings that basically pays me to keep my phone service on.

So they really seem to want me to have a phone through them. Why? It can't just be market share, can it? What other reasons do people think there might be to so strongly encourage me to keep a phone I never use?

posted by Futurehouse to technology (7 comments total)

Cox doesn't care. The retention agents, who are paid to keep you from canceling services, care.

In particular, when you call to cancel a service, they'll search any specials that are currently being offered, and offer them to you. The idea there is if you're paying less for the duration of the promotion, you may change your mind and keep the service even when the rate goes back to normal. Or, you'll call back, they'll convince you to take another discount package, and that agent also gets another 'save'.
posted by Rendus at 9:38 AM on October 6, 2008

The fact that that offer is available means that Cox thinks it might be worth it. Probably because phone doesn't cost them hardly anything and they're afraid if you go to another company you'll also buy internet and/or cable from them.
posted by aubilenon at 9:43 AM on October 6, 2008

What other reasons do people think there might be to so strongly encourage me to keep a phone I never use?

I'm not sure if it's the case with Cox, but in my experience cable companies are notorious for offering very low introductory rates and then jacking up the prices later. My guess is that they are giving you a teaser rate to get you to user their service, expecting to make their real profit later once you start paying the normal rates.
posted by burnmp3s at 9:51 AM on October 6, 2008

The phone companies are becoming a threat against Cox's basic business. Where I live, Verizon just wired our entire neighborhood with fiber, and they now offer Internet access at competitive rates to our cable company. They'll probably start offering video too.

If Cox can keep your phone business, that's business the phone company doesn't get. For the phone company that's their bread-and-butter; it pays for the infrastructure and allows them to offer the other things at attractive rates. By depriving them of that bred-and-butter it forces the phone company to charge a greater price for internet and video, making them less of a threat to Cox's bread-and-butter.

Fact is, Cox would rather give you phone service for free than to have you pay the telephone company for it, just in order to deprive the phoneco of that revenue.
posted by Class Goat at 9:57 AM on October 6, 2008 [1 favorite has favorites]

In a subscription business like Cox's, it's more expensive to acquire or re-acquire a customer than it is to keep a customer. Even if they don't make any money off you, at least they have you in their customer base for cross-sell and upsell purposes. They avoid the lock-in effect they'd have to break through in order to win you back at some future point.
posted by chesty_a_arthur at 10:18 AM on October 6, 2008

I work in the retention department for a telecom company that offers triple play (phone, internet, TV) service. It is important for us to maintain a customer's phone line because our stock price and market value is determined (in part) by the total number of revenue generating units (TV, internet and phone is considered 3 RGUs).

Say you have a phone, internet, and TV package that costs you $100 per month. You want to cancel the phone service, which would bring your package down to $80. Since we want to keep the RGU to benefit our stockholders, and since we were going to lose that $20 anyway, keeping your phone service - even if we're not technically getting paid for it - helps us.

This may not be the case for Cox, or other telecoms, but that's why we do it that way. Also, chesty_a_arthur's comment is a part of it.
posted by sacrifix at 12:10 PM on October 6, 2008

I spent a few years working in telco, and I seem to recall marketing prescribing to the theory that that bundling made a customer "stickier"... ie if you have all of your services with one provider, it was far less likely that a customer would leave you, as opposed to having split services, where you could easily consolidate with either provider....
posted by vaneska at 10:14 PM on October 11, 2008