I recently went to a chiropractor for the first time. It was because I had some pain in my knee that kept getting worse and I hit a pain threshold that required action. I no longer wanted to endure the pain. In the treatment sessions there is some manipulation and of course the question “does that hurt?”, if I wince. I am willing to accept a bit of short-term pain for long-term gain.
I was reminded of this in reviewing some recent Bell price increases. It seems to me like Bell Canada is experimenting to see if there is indeed a maximum pricing pain threshold for some of their business clients. However for most customers I see Bell offering only pain and no long-term gain.
In working for a client earlier this year, I noticed that on June 1, Bell Canada and Bell Aliant received approval to increase prices for a local services offering called Local Link Package by 5%. Ok, I thought it was just over 10 months since they increased the price, but a 5% increase seemed a bit much. The fact that my client was in a Tariffed contract provided no protection and price increases were automatically invoiced so you have to wonder about the value of Tariffed contracts to customers (more on that in another forthcoming posting). However, since my client was in contract negotiations I had a solution for them.
Well this week, in looking through tariff approvals on the CRTC website, I delved into a Tariff Application effective October 1, 2014 called Centrex III Service. To my astonishment it was actually another 5% increase on Local Link services, the second 5% increase in 4 months! I thought it was rather sneaky not to label this Tariff increase as a Local Link Package similar to its description in earlier Tariff Applications, but I suppose that Bell thought that might have drawn too much attention.
I can imagine that somewhere in the bowels of Bell Canada there is a local product manager who is off track in making his plan for the year. Well, winning more business, losing less business is sometimes tough when customers find better options. When you need to close the gap in a plan quickly, raising prices seems pretty easy. So I envision the product manager and the pricing analyst having a conversation something like this. “Hey can you prepare a price increase for me on Local Link services?” The analyst responds, “But we just increased the price by 5% four months ago and this is our 5th price increase since January 2013!” The Product Manager says “Look we need to make plan. Our bonuses depend upon it, besides we didn’t get a lot of blowback on the last 4 price increases and the customers really don’t have a choice do they?” He goes on to say “Look, all you have to do is change the Tariff numbers on the last tariff application template, and on the tariff page change the 30 price points, update the Tariff number and we’re done. Just be sure that 5% is going to get us back on plan. I don’t want to have to do this again until February next year. Oh, and one more thing, don’t call the tariff application Local Link Package, that might look bad, why not just call it Centrex III Service.”
Of course the outcome for Bell Canada after 5 price increases totalling over 21% in 21 months may be short-term gain for long-term pain. Customers eventually reach their pain threshold and find a way to attack the source. Customers should be letting Bell know what they think of these price increase, for contracted services no less. If you need help in identifying and alleviating your telecom pain points including Tariffed services, TelecomConsult can help whether you are in a contact or in negotiating new terms.
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