If you're reading this, you probably know that I'm a cell phone salesman. So you may immediately think "Well of course he's going to say that contracts are good. That's his job!" If you know me well at all and you still think this, let me know so I can stop associating with you entirely. Thanks in advance. If you don't know me all that well, then here's why the big bad contract isn't big or bad.
Think about the last cell phone you bought. Now think about how much you paid for it. Now most people will say they paid anywhere from nothing to $199 for their phone. Let's say you bought a Motorola Droid on the day it came out for around $200. Not bad, considering it retails for $600 or so without a contract. Many people will say it's a ridiculous price since that's way more than what it cost to make. And they would be wrong. The parts and manufacturing costs for the Droid put it at $187.75 per Droid made. Now a $600 value for something that costs $187.75 doesn't seem right! Wrong again. That figure is in raw form. It does not take into account how much the makers of each part (screen, bezel, camera, etc.) have to pay the company who supplies the raw material, shipping costs from wherever each part comes from, shipping costs from wherever the phone is made to warehouses, shipping costs from warehouses to stores, the boxes, the chargers, the people trained to do tech support for it, the network bandwith it takes (contract or not), the pay of the people selling it to you, and all these other invisible costs that the end user (you) don't see. Suddenly that $600 makes more sense.
But the average person asks, "Why should I give a damn about those costs?" It's very simple. Your wireless phone provider is not your friend. They are not there to make you happy. Despite what any representative may tell you, they do not need you. You need them. And while yes, some make the point that people lived before cell phones, it's a moot point. You need them now. You are used to having them, and if you're anything like me and have a decent social life, you have to have one. This isn't a bad thing. Many of us couldn't live without a car anymore. We couldn't live without electricity. The cell phone has evolved from something you have in case you NEED it to something you have for when you WANT it. What people often forget is that your carrier is a company, and company's have only one goal in mind: Make money.
Nobody is stopping you from buying a Droid for $600 and signing up on the same plans as contract customers. You can do that. But even considering the $350 fee for breaking contract, it makes no sense to do that, since the only thing you benefit from not having a contract is the ability to go elsewhere. Now think about how many cell phone companies you've owned personally. The answer is probably one or two. The majority of people finish their contracts out and stick with the same company for more than 2 years anyway. People who complain about the price of the phone without a contract have no leg to stand on. Of course the company isn't going to cut you a break on the monthly service since you bought the phone. You've made it clear that you don't care about earning them money, so they really don't care about you. You might not like it, but tough cookies because it's their service, not yours. That's where many Americans make the big mistake: Despite what your employer told you about your customers, the customer is not always right.
My next post (look for it this week) will go more in depth (meaning less techy) on this country-wide misunderstanding, but for now, I'll leave you with this. Customer service is there not to ensure your happiness, no matter how much it seems like it. They are there to ensure that you're happy enough to keep writing checks. That's it. And people need to realize that no matter how strong your sense of entitlement based on how long you may or may not have been with a company may be, the loss of your small, contract-free plan every month won't hurt them. In fact, you may save them money on their phone bill from your 8 million calls for every time YOU mess up your bill.
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