New customer better deals

[MarkGoldsmith]

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@doc-ab wrote:

Skys churn rate is rising. It seems daft that following the logic that many have posted ie it costs more to sign up a new Sky customer why lose customers by offering lousy deals? In the insurance market it is now illegal to offer new customers a better deal than existing customers. 
Sky, BT, Vodafone and Talk Talk have agreed to ofcom advice to offer new customers the same price as existing customers if they take out a new contract,  can same rules be far away for pay tv?

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The unfortunate thing in the insurance market is that the end result is all customers being out of pocket as the insurance prices generally went up as a result for all customers. To be honest I quite preferred the old model of having good new customer deals because if you could be bothered and were on-top of your renewal dates you could actively get deals and make a saving. That option has essentially be taken away now (even more annoying when certain types of insurance you obviously have to have for various purposes like car insurance).

I doubt any such legislation would be enforced for TV services, as unlike insurance and broadband, a TV subscription service isn't an essential.

A lot of customers who call for these types of legislation changes which the regulators sell as being "great for customers" generally are never good for your bank balance. The regulators make changes with the idea of making things clearer and more upfront on contracts for those that don't read the T&Cs before or just after signing up, which ends up leading to prices rising throughout the industry.

[Kdale2]

I too have been with sky for over 18 years and when i rang them to dispute a new customer contract, 1 they denied  the deal altogether even after i sent them photographic proff, 2 they told me out right that i would never get any deal as good as a new customer and that i was on the best one i can get. I pay over £140 amonth for a very low package comparied to that which a new customer can get. 

[doc-ab]

I am afraid that you have missed the whole point of the super complaint that resulted in attempt to tackle the loyalty penalty.

The issue was that those that would be classified as vulnerable, e.g. the elderly or those not IT literate etc would end up paying a loyalty penalty by not being able to switch providers and search for the best deals.

If car insurance costs have increased. This has absolutely nothing to do with the super complaint on the ending of introductory discounts. The average price would remain the same since some individuals would have an increase in price and some would have a decrease. The only reasons that average prices would rise be either because insurers have increased their margins or that there has been an increase in the value of claims.

I will also not be sure that the pay tv market will never be tackled

the CMA has already indicated that it believes that a loyalty penalty almost certainly exists in other markets, including

pay TV

breakdown services

pensions

other online markets such as online gaming, software and magazines 

Many other insurance markets 

[MarkGoldsmith]

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@doc-ab wrote:

I am afraid that you have missed the whole point of the super complaint that resulted in attempt to tackle the loyalty penalty.

The issue was that those that would be classified as vulnerable, e.g. the elderly or those not IT literate etc would end up paying a loyalty penalty by not being able to switch providers and search for the best deals.

If car insurance costs have increased. This has absolutely nothing to do with the super complaint on the ending of introductory discounts. The average price would remain the same since some individuals would have an increase in price and some would have a decrease. The only reasons that average prices would rise be either because insurers have increased their margins or that there has been an increase in the value of claims.

I will also not be sure that the pay tv market will never be tackled

the CMA has already indicated that it believes that a loyalty penalty almost certainly exists in other markets, including

pay TV

breakdown services

pensions

other online markets such as online gaming, software and magazines 

Many other insurance markets 

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So the point I was making is that essentially as the new customer deals are gone from the insurance market, you don't get as good as offers from switching every 12 months. This therefore hits the majority of customers in the pocket with generally higher insurance prices because you can't make the savings you previously could do by switching at the end of your contract to a cheaper price.

Has there been an increase in prices generally in insurance due to inflationary reasons, asolutely but the average cost of insurance packages in the market started going up when this was inplemented due to the cheaper new customer deals being withdrawn.

[PandJ2020]

@doc-ab 

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@MarkGoldsmith wrote:

So the point I was making is that essentially as the new customer deals are gone from the insurance market, you don't get as good as offers from switching every 12 months.

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This is the trouble with a 'competitive market' where providers have to actually offer their services at a 'loss' to gain new customers.  But obviously they can't maintain that in the long run and cannot continue offering a loss - thus relying on customers continuing at higher rates to make profits.

If everyone switched at every contract it would be a different market entirely.  Any 'meddling' will cause everyone's price to rise.  As it stands you are rewarded for continual switching whilst the majority that don't subsidise those that do...

[doc-ab]

The "average" cost remains the same with the ending of introductory discounts if all other factors remain unchanged.

regular switchers pay more, those that don't switch pay less. 

[MarkGoldsmith]

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@doc-ab wrote:

The "average" cost remains the same with the ending of introductory discounts if all other factors remain unchanged.

regular switchers pay more, those that don't switch pay less. 

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The cheap new customer offers have essentially disappeared which pushes the "average" market price for customers up, as the lowest introductory offers were removed from the market.

I've found you certainly still save money from switching insurance provider every year but the savings tend to be a hell of a lot lower. Just looking at my various insurance products over the several years it's probably on average about 10% now whereas previously on new customer deals you could certainly get in excess of 20%+ in savings.

[Eeeps]

How much does it actually 'cost' Sky to entice a new customer?

Advertising on Sky channels (I bet that's free!).

I can understand the minimal one off cost of equipment (probably refurbished anyway) & installation.

Above that nothing. There are no ongoing costs (excluding third party supply agreements) for Sky for each additional customer.

Do they lose money on new customers - I bet not. 

[doc-ab]

So you switch every year and get a 10% discount? As new customers aren't allowed to get a better deal than existing customers then every insurer you switch to must be cheaper overall than the previous one. Existing customers are getting the same deals as you. I think you might be a touch confused. 

[MarkGoldsmith]

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@doc-ab wrote:

So you switch every year and get a 10% discount? As new customers aren't allowed to get a better deal than existing customers then every insurer you switch to must be cheaper overall than the previous one. Existing customers are getting the same deals as you. I think you might be a touch confused. 

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Nope i'm not confused at all, i think you are.

I was replying to your comment of 

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@doc-ab wrote:

The "average" cost remains the same with the ending of introductory discounts if all other factors remain unchanged.

regular switchers pay more, those that don't switch pay less. 

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Pointing out that your statement of "regular switchers pay more" is completely inaccurate. Regardless of whether new customer or existing customers get the same prices, in a competitive market like insurance, regular switches of providers will be able to play the market and make savings, by switching to another insurance who just happens to have a better price at the point you need your new policy to start. If you don't switch provider, and you tay with the same provider you will in essence be paying more as you won't be taking advantage of market competitiveness to lower the cost of your policy.

You do realise that in the insurance market prices can and often will change on a daily basis, so if you just except the renewal quote your existing provider generates and auto-renews, you are extremely unlikely to be taking advantage of pricing differentiations.

[doc-ab]

You yourself have told us that as a regular switcher you are paying more tha you used to 

[doc-ab]

Bye have a good day

[Mark39]

Simply it's Sky's  business strategy to incentivise new customers.

[caesarome]

When you joined Sky you would have joined via whatever offer was available at the time that wouldn't have been available to those existing customers. As a business it is Sky's job to attract new customers and this is how they do it, whether this is fair or not is another question. If you don't believe you are getting value for money you could try to haggle a new deal out of them or give notice to leave and go elsewhere but the chances are if you do go elsewhere the same issue will crop up.