EE broadband pricing sales tactics…

[Cucaracha]

Hi,

After being a BT customer for many years (broadband/landline) I’ve recently switched & renegotiated with EE.

I have a general query about pricing structures & sales tactics/philosophy…

For instance:

EE Fibre 36 Essentials broadband is currently being offered for £29.99 per month, for a period of 24 months, with the first three months for free.  

If you look at the small print the monthly fee goes up by £3 after 12 months.  (A bit of a sneaky way to tack £36 on top).  

This means that for this 24 month contract you’ll spend 9 x £29.99 (year one) plus 12 x £32.99 (year two) = £665.79

This does seem unnecessarily complicated.  

Why not advertise the package for £27.74 per month for 24 months?  The price per month is less, (which I would have thought would be more of a draw to potential clients).  The monthly layouts are equal which makes life simpler for customers & EE alike.  (As a customer you know what you’re getting into and the price doesn’t jump about like a frog in a sock).  The final amount spent will be the same (24 x £27.74 = £665.76, basically as above, minus 3p - actually the price should be £27.74125 per month to exactly equal the above, but this seems unnecessarily pedantic).  

Does the attraction of three months for free with ‘hidden’ price increases really override honest simplicity?  Or are humans by and large just gullible apes that will sign up to anything if the first months are free?

I find the way things are currently structured strange, obfuscating & overly complex, but am sure others will enlighten me as to the various merits.

Any thoughts?

🙏💫  

[XRaySpeX]

Yes, with a fixed annual increase over all plans, those on the lowest priced plan are hit with the highest %age increase.

[Cucaracha]

A fixed annual increase is fair, if published openly at the time of negotiating the contract.  I have no qualms with this.  But there is deliberate & misleading obfuscation with the presentation of fees/facts.  In this case one is led to believe that a fixed fee of £29.99 is payable for 24 months, with the first three months free.  Therefore 21 instalments of £29.99.  But the small print reveals the fixed £3 annual increase every April.   The total payable (for a contract taken out today) actually equates to £29.24 every month for 24 months, so why not just simplify the overly complex maths & advertise it as such? That’s my question.  Answered, I guess, by the fact that the marketplace is ALL smoke & mirrors.  And my simple solution doesn’t include the word ‘free’.  🤯

[Cucaracha]

Interesting points & interesting reading.  Thank you.  🙏 

[Ewan15]

The policy of in contract price increases is exploitative.

It would not be too hard for EE or any other ISP that does this, to simply charge a flat rate for the contract.

It is not that difficult to work out. However the real reason for doing it is your monthly Broadband price has increased by up to £6 by the end of 24 months (Dependant of when the contract started. 1st April is the best day to set up a contract as you will only have one increase during the 24 months. I suspect there are no deals available in April! 🤔).

Savvy customers will negotiate the price of their next contract so that they pay something close to new customer offers or simply move to another provider. It is  vulnerable  people that end up paying grossly inflated prices for their broadband over time as they just renew by default. 😠