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It doesn't matter. They can't change the price on existing contracts, and when those contracts are up, customers have the option of picking a new seller.
by rcthompson 15y ago
It doesn't matter. They can't change the price on existing contracts, and when those contracts are up, customers have the option of picking a new seller.
- Retric 15y agoBy contrast, when sellers react quickest, they are quick to copy others offering poor value for money. This reduces the number of sellers offering good value for money in a vicious cycle that drives prices as high as possible. There are two conditions, high number of cycles, and company's reacting faster than customers. As I said there is a high number of cycles because company's can change their price for new contracts every day or hour etc. The second condition that customers reactor slower which does not mean they can't renew at the end of their term just that they don't react as fast to changing prices as companies do. Personally, I have gone though several cycles of renewing my contract and I must say I don't price shop on the day I sign the new contract. Do you?
- rcthompson 15y agoI guess the point I was trying (badly) to make is that long-term contracts are not the same thing as buyer inflexibility, though they can be a cause of it.