How You May Be Losing Hundreds of Dollars per Year and Not Even Know It
This is a three part series on keeping your Telecom expenditures at reasonable levels.
As we were writing this, we realized how big an article this would be if we exposed all the tools used by the telephone companies to maximize their profits. They have been raising telephone rates, and fees, very quietly over the last few years. As competition has declined in Canada, the telephone companies have been bringing back old fees, and introduced some new ones. They realize that companies rarely audit their phone bills, so they can get away with it. Then they give you a “courtesy call” to bring down your rates by getting you to sign an excessively long contract. Usually this is 3 years or even longer.
According to Gartner Research www.gartner.com 80% of phone bills are incorrect. Large companies actually have full time audit staff to watch their telecom bills, but the small business owner doesn’t have the time to keep up with this. Also, telephone bills are typically so hard to read, most business people give up trying to understand what they are being charged for.
What to look for
Monthly billing rates have increased. Typical monthly rates have gone from the low $40.00’s to over $50.00 for multiline service. This can be brought down to under $40.00 (Calgary, Alberta rates)
Wrong service. Some companies we look at have Centrex service terminated to their telephone equipment. In the past this made sense. Not anymore. The fees charged for this kind of telephone service are significantly higher than necessary.
Long distance access fees. Long distance used to be a service that you paid for as you used it. Many companies have now added a minimum fee of $6.95 plus usage.
Excessive long distance rates. We are still seeing rates in excess of 50 cents a minute in North America. That’s 1000% over priced! Typically long distance rates for business are 4 cents a minute or less.
Long distance per minute billing. Business long distance use to have a 30 second minimum billing and then 6 second increments after that. The change to 1 minute minimum and 1 minute increments is often done without the customer’s knowledge. Although this may not seem like a lot, it can increase a long distance bill by 30%.
Over capacity. The majority of the bills we review, companies have too many telephone lines. Why? They fear their customers might get a busy signal. Many businesses compensate by having too much capacity. Phone companies are only too happy to provide you with more lines than you need. More lines, more revenue for them.
They don't tell you that usage can be measured to make sure your business does not have too many phone lines.
Lines that have been asked to be disconnected – aren’t. We will be polite here. We have found companies paying for telephone lines that they thought had been disconnected years ago. People disconnect services, and then forget to check to make sure they really have been terminated. These can include old phone lines that used to be for modems, POS machines that have moved over to the internet, old fax lines, ect.
Additional, unnecessary fees we come across: Rental of telephone jacks, Mileage charges, FX lines, in house cable rental.
What can you do about it?
There are several things you can do but you have to be diligent. Here is what you can do:
- Have a phone bill audit done. Either do it yourself, or have us do it.
- Don’t sign a contract without doing a competitive review. All too often we find customers “stuck” for 3 years with expensive, inflexible contracts. Our recommendation is to never sign a contract for more than one year. Especially for smaller businesses.
- Do an annual review. Rates are constantly changing; you need to make sure you are paying proper rates.
- Have a traffic study done. Make sure your company has the right number of telephone lines.
- Keep educated on emerging technologies. There are a variety of new technologies that are bringing a new wave of lower costs and higher efficiency to the market. You can only take advantage of them if you have the flexibility to make changes as needed.
Conclusion
Almost every telephone bill we review has errors on it, and it usually involves some sort of overcharge to the customer. These overcharges are making the telephone companies millions of dollars in excess fees. It’s up to all of us to make sure we are billed properly….Audit your Phone Bill !
Part 2 of this series will be about Cell phone expenditures. Canada has amongst the highest cell phone rates in the world. There are ways to bring down those bills. We will discuss those next time.
P.S. If you would like an audit of your services, please contact us. There is no charge for this service, and you are under no obligation to make changes you don't believe are worthwhile for your business.