Want to Win the War? Show You Care
By JIMMY SCHAEFFLER -- Multichannel News, 2/5/2001
In the raging battle ahead between terrestrial, satellite, cable and wireless system operators, the truest measure of success will likely come down to two key practices: Providing solid customer service, and delivering new products and services that make existing customers want to stay and non-customers want to subscribe.
Ironically, the first involves managing the "width of the band," while the second involves "managing bandwidth." What's not ironic is that the two ideas come down to just one key message: Show the customer you care.
The first place to focus is on level of customer service, which entails properly engaging and implementing the huge bands of representatives that will make up future customer-service teams. Next will come customer services, which is another way of saying content delivery and system bandwith management.
If done well, both will take operators in each of these arenas that much closer to capacity customer counts and robust revenues.
However, in order to propel itself and further mature as an industry, each must do much to further concentrate on and perfect these two activities.
MANAGING THE WIDTH OF THE BAND
The first chore requires that each operator dedicate a substantial sum toward call-management centers, and toward training and paying thousands of subscriber-management system representatives to sell their wares and solve their consumers' problems.
For example, each of the two direct-broadcast satellite providers continues to significantly best cable's efforts when it comes to basic customer service. Surveys show that subscribers respond well not only to CSRs who answer the phones quickly, but who also can properly solve their problems and provide further assurance that they are receiving value for their subscriber dollars.
That said, what's ahead in the customer services arena? Customers being able to use the Internet to interact with their system operator's Web site is one sea change that is occurring. This is something that is strongly encouraged by operators, because it allows them to free their CSRs for additional calls and thus hire fewer of them.
It is often more satisfying for subscribers, too, because they can dig deeper to get more fulfilling answers and therefore better under-stand their subscription services. In addition, studying bills online helps customers to address their concerns more rationally, and paying bills online is not far away for more than just today's niche audiences.
Another avenue of improved customer service suggests that the very best operators will provide enhanced services to those customers who pay a bit more, and are a bit more loyal.
There is also the constant battle over whether to keep the customer-service function in-house or farm it out to a third-party vendor who can deploy economies of scale and other skills to enhance services, using fewer CSRs. Conversely, the argument will always support the concept that ownership and direct control is the key to employee and customer retention and acquisition.
When a call-management center worker has a subscription to the service he or she represents, that rep has a share in the company. In addition, if the rep only deals with the service provider's products and services, the rep arguably knows the product and the subscriber better, and can do a better job of providing better and more consistent customer service.
An additional customer service challenge deals with subscription TV industry efforts to properly install new set-tops and related equipment. Satellite TV and cable installers have too often shown a marked unfamiliarity with the new products coming into their markets. Added to this is a frequently heard critique about installers that have a hard time tying together separate new devices. This is a problem that will only become more severe, as many new devices are introduced, from a whole set of different manufacturers.
Steps to ensure industry capabilities are often best grown at the industry trade level, which is a spot where trade groups like the Satellite Broadcasting & Communications Association and the National Cable Television Association can advise. This development will especially impact the future of the cable industry, as it moves toward its own additional level of new set-top box and related device installations, as mandated by the Federal Communications Commission within the past few years.
Closely related to basic customer service is the idea of designing and implementing new services only when they are simple and not confusing to the overwhelming base of subscribers. A perfect example is electronic programming guides that are designed to be simple and extremely easy to use.
The very best operators, working hand-in-hand with the very best programmers, will make it a mandate to ensure their customers clearly appreciate and use all that the programmers on their systems can deliver.
MANAGING THE BANDWIDTH
The next chore for tomorrow's subscription TV business is to make sure the content offerings are attractive and useful to as many subscribers as possible. For some consumers, this will mean a system that offers the newest services, such as personal TV and other forms of advanced interactive multimedia services, such as those offered by America Online Inc.'s "AOL TV,"
Microsoft Corp.'s "Ultimate TV," ZapMedia, WorldGate Communications Inc., ICTV Inc., Liberate Technologies and LodgeNet . Matching great content with appropriate inter-activity will be the key ingredients for every operator in this arena.
On the wired side, cable is deploying modems and telephone system operators are providing digital subscriber lines, which compete remarkably well with those of the satellite providers for customers'two-way services. Excite@Home and Road Runner are cable's key deployments here. Both do a solid job of keeping cable operators competitive with other system operators. Nonetheless, analysis suggests cable must make these services more widely available and provide for wider access to hubs, in order to remain competitive with a national satellite service.
Further, on the telco side, digital subscriber line providers must upgrade their video capabilities. At the same time, telcos must also be able to continue to retain their universal advantage with customers as a well-respected telecom provider, which is greatly superior to that of either the cable or satellite industries.
And for both cable and telephone providers, their lead in the bundling of numerous services is probably years more than that of the satellite industry, which is an important additional advantage.
On the satellite side, in addition to hundreds of video channels, General Motors Corp. unit Hughes Electronics Corp. will further deploy its two-way Hughes Network Systems' DirecPC Internet service. Meanwhile, DirecTV Inc., will further deploy its combination DirecTV-TiVo Inc., boxes, together with TiVo and Wink Communications Corp. services, to DirecTV's almost 10 million subscribers (as of year-end 2000). DirecTV will also introduce its AOL TV and Ultimate TV services during 2001.
Both Hughes units are expected to also begin offering the recently-acquired Telocity DSL broadband service to subscribers nationwide during 2001, which will provide two-way capability, complementing the existing DirecPC two-way service.
On EchoStar Communications Corp.'s side of the satellite ledger, in addition to its Wink, OpenTV and Microsoft WebTV alliances, EchoStar has deals with the two-way service called StarBand LLC. EchoStar also plans further two-way Ka-Band deployments with Colorado-based WildBlue, which is expected to launch in a couple of years.
Yet, in the end, the long-term success of every telecom provider, including the satellite players, may well depend on their ability to bundle other telecom services for customers nationwide.
THE KILLER APP
In the end, if cable is going to at least maintain-and ideally increase-its 65-million-subscriber base, it, as an industry, must find the motivation and resources to make both forms of these customer-service developments much more than another version of lip service. At the same time, if DBS is going to continue to take large market share and revenues from the cable industry, it will have to step its customer-service activities up quite a bit in the years ahead.
The prime ingredient here, whether urban, suburban or rural, is delivering what consumers will buy. Time and time again, this comes down to the basics-i.e., price points, quality, and choice. Or, to put it more aptly, the best way to maintain and build customer bases is to show your customers that you care. That is the ultimate killer app.
Jimmy Schaeffler is a subscription-TV analyst at The Carmel Group.
