Is customer loyalty dead or are you just a bad negotiator? How Kevin O’Leary gets a better deal when his bills creep up
If your internet bill suddenly jumps $12, your airline miles stop going as far, or your streaming subscription quietly tacks on another fee, you’re not imagining it.
It’s what experts call the “loyalty penalty,” and it has quietly become one of the biggest ways companies boost revenue. You stay put, prices creep up, and loyalty ends up costing you.
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But the good news is that these increases are often negotiable, as long as you talk to the right person. Take it from a professional: Investor and “Shark Tank” star Kevin O’Leary says he combats creeping prices by asking to speak with one specific person.
Why Kevin O’Leary says the retention officer is your secret weapon
When a price hike shows up on your bill, who you talk to matters.
“I always call on a bill and say, ‘Let me speak to your retention officer.’ Avoid dealing with the sales rep, because only the retention officer can cut the deal,” he said (1).
A retention officer (sometimes called a customer retention specialist) has one job: to stop you from canceling. They’re usually the only person authorized to:
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Extend or reinstate promotional rates
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Waive fees or one-time charges
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Offer loyalty perks
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Price-match a competitor
Financial software firm Vena Solutions reports that when customers do escalate calls, retention teams can successfully keep between 67% to 84% of accounts in various industries by offering targeted incentives. (2)
And companies fight hard to keep you. Research from Outbound Engine shows that acquiring a new customer can cost five times more than retaining current consumers (3). ThinkImpact reports that 65% of company revenue often comes from loyal customers, so many businesses offer perks to retain their following (4).
For example, it costs a company money to pay an employee to come to your home and install your Internet service, as well as paying for the equipment used to do so. An existing customer hands over money every month without costing the company anything extra that a new customer would.
How the “loyalty penalty” quietly drains your wallet
Companies have learned that most people simply won’t switch. And because of that, loyalty programs and long-term customer relationships can become traps that mask steadily rising costs.
Here’s how pricing creeps up across common services:
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