An economist once said the way to sell a product that’s hard to distinguish from its competitors’ is to confuse the customer.
If he was talking about companies that peddle long-distance Online Office Supplies, I think we can all agree that they’ve succeeded.
Why wouldn’t we be confused? Just think about the mountains of cash companies like AT&T and MCI have spent trying to scramble our brains. As consumers, we’re used to this — consider the similar sums that have been spent by Pepsi trying to lure you from Coke, or by Burger King trying to take your business from McDonald’s. The difference is that when Pepsi talks up its taste tests and Burger King extols the virtues of grilling over frying, you know that the fuss is about nothing more than brand distinction. The phone companies seem to be saying something different: “We’re not just pushing our brand, we’re saying that if you take the time to compare, you’ll save so much money you might as well get ready for that Paris vacation now.”
OK, let’s shop and compare.
Shop and Compare
First we have to examine the very notion that these plans can be compared. Part of the “confuse the customer” tactic is to make the tangle of offerings incomparable. Many companies change offers several times a year or more, so it’s nearly impossible to pin them down. Worse, they have such arcane rules that the average layperson — not to mention the average rocket scientist — could hardly translate them into anything resembling a bottom line. Sprint cooked up its simplified “dime lady” campaign as a response to the confusion, but even she doesn’t help: The fine print states that the 10-cent rate applies to calls made only during evenings and weekends.
Don’t even think of going to the companies for clarification. No matter how many times I’ve asked those dogged AT&T telemarketers to send me their offers through the mail, the most they’ll do is ask me to call an 800 number. So much for the old “put it in writing” campaign.
What’s the answer?
Sign up with a plan, any plan. If you don’t, you’ll be charged long-distance “basic” rates — that’s retail, baby — by your default carrier. The advantage of discounted calls over basic rates is significant — after that, we’re squabbling over pennies. Choose the discount plan that’s more or less right for you by reviewing your last three phone bills:
Do you tend to call the same far-flung friends and relatives over and over? Consider one of the friends-and-family plans.
Do you spend much over $50 on long distance each month? Select a discount plan whose savings climb with every dollar spent above a certain threshold.
Do you spend much under $50? Think about a one-rate plan with no minimum spending requirement.
Sick of being bombarded by promotions from AT&T, MCI and Sprint? Let’s take a look at rates beyond the Big Three.
Beyond the Big Three
There are a number of small carriers and about a dozen dial-and-save services. But considering how small the savings tend to be and how much customers have benefited from stiff competition among the three largest carriers, it’s hard to see the point of choosing a plan from outside the Telephone Triumvirate.
An example: I used a dial-and-save service for a couple of months. (These give you a five-digit number beginning with 10, such as the Long Distance Wholesale Club’s 10297, to dial before making a call.) I, the big fool, assumed that a dial-and-save service meant I’d get an additional discount beyond the one I receive on my discount plan.
Turns out dialing the code took me out of my regular discount plan momentarily, replacing my discount with the dial-and-save’s discount. Since the dial-and-save company applies its discount to those pricey basic rates I mentioned earlier, I might just as well have stuck to my usual calling plan — no extra digits required.
Even the small carriers’ enticing flat-rate plans can be deceiving. Ten cents a minute any time of day sounds pretty juicy until you find out that there’s a monthly $5 access fee and a three-minute minimum charge for calls. Kinda blows away the theory about lower overhead translating to lower prices.
Tempted at this point to step over the whole stinky mess and derive your savings from one of the plans that gives you, say, five frequent-flier miles for every dollar you spend on long distance? Give it up. At $50 per month in phone calls, it would take you a decade to save up enough miles for a domestic ticket.
Want more tips on phone plans?
Don’t be taken in by plans that claim to give the highest discount off basic rates — the reduction might be applied to higher basic rates than the ones other companies are discounting from.
People who make a lot of international calls should ask their carriers about how to optimize savings on domestic long-distance as well. Some carriers penalize you for using services from two different companies; others won’t allow you to enroll in their cheapest plans for both domestic and international calls.
You may have to switch carriers, then switch back, to take advantage of a special offer during a price war; some companies won’t allow you to if you’re already a customer.
Be wary of those incentive checks phone companies send to entice you to join up; accepting one may preclude you from being able to choose the company’s best discount plan.