I think it's a little more complicated than that. Back before prices got better, my parents used to call up the cable company every year to "cancel our service". Why? "It's too expensive." Eventually they would "give in" after shaving $20 off our monthly bill. This of course was their intent the whole time: they saved thousands of dollars over about 10 years as a result.
Very few people actually determined to cancel are going to be convinced by something like this, I suspect. There's a whole cottage industry of mostly older, upper-middle class folks who call customer service lines once a year to get their rebate. I find the whole game rather reprehensible (on the part of the companies that allow it). It constitutes a kind of wealth transfer to the people who have the free time, energy, and ability to play the game. I'd much rather these companies just reduce the price across the board towards the "average" payment, and stick to their guns with the people who call in.
This would eliminate so many hours of pointless work and frustration.
Usually, it's not worth the time to haggle over people to figure out the most they are willing to pay for low margin retail goods, so you don't see it at Walmart or the grocery store. But for high margin goods, such as cars, real estate, B2B sales etc, each buyer has a different amount they are willing to pay, and so you want to try and capture as much of everyone's capacity to pay as possible.
Actually, come to think of it, low margin retail and grocery does it too with coupons and whatnot that some people are willing to spend time on and others are not.
> low margin retail and grocery does it too with coupons and whatnot
Yes! I was going to mention that this is really a pretty universal feature of "pricing", but decided that was too controversial an angle on what was a rather simple point.
And correct answer after first cycle is. "All done! Service will end tomorrow!". And if customer tries to cancel, just tell them the new higher price with not leeway any more for them.
Very few people actually determined to cancel are going to be convinced by something like this, I suspect. There's a whole cottage industry of mostly older, upper-middle class folks who call customer service lines once a year to get their rebate. I find the whole game rather reprehensible (on the part of the companies that allow it). It constitutes a kind of wealth transfer to the people who have the free time, energy, and ability to play the game. I'd much rather these companies just reduce the price across the board towards the "average" payment, and stick to their guns with the people who call in.
This would eliminate so many hours of pointless work and frustration.