Negotiation skills are the most powerful tools in your toolbox, because they help you cut costs and make more money.
The easiest way to perfect this skill is to start small, then work your way up to big wins, which is what we’ll be doing over the next few months. But today, you’ll start getting your feet wet by negotiating to lower your monthly bills.
Many people start paying for a subscription (gym, car insurance) and never check again. Any ongoing expenses like your cell phone, cable and insurance, you should look for ways to get lower plans at least once a year. That means he should pick up the phone and negotiate.
People are more motivated by loss than gain
Robert B. Cialdini talks about this in his book Influence: The Psychology of Persuasion — we’re motivated by loss rather than gain, which means you’d rather not cancel something once you’ve got it. “What if I miss something?” people wonder. Or, “Oh man, am I really going to have to research another resource to fix this?”
That’s why companies love subscription fees – they get to take your money every now and then without you really having to think about it. So we end up signing up for things we think we need and paying more because we worry we’ll miss out on a new feature. Of course, you can cancel it entirely – or you can improve your spending with a few hours of calls.
Treat everything as an experiment
When I signed up for a new cell phone plan, I took the most expensive plan and set a calendar reminder to log in in 3 months. During that time, I tracked my usage and reduced it accordingly.
You should do this with everything: your cable, Netflix, gym membership, magazine and internet subscriptions. The best time to do it is a month before you renew. That way you have all the power. You will have plenty of time to review your options and decide whether or not to switch services. And, because the company will want to keep you as a customer (remember, their customer acquisition costs are often in the hundreds of dollars), they will likely give you what you ask for.
Most people won’t cancel a plan, even when it comes to subscriptions they don’t use because, again, they’re afraid of missing out on something. If you track your usage, then you have the advantage of making decisions based on facts rather than unfounded fears.