Marketing

Cox Pulls Up a Sofa

10/18/2010 10:39 AM Eastern

The latest secret weapon
in Cox Communications’ battle
for market share? Comfy sofas.

The nation’s No. 3 cable operator
has engaged in a sweeping
strategy to change the way it interacts
with customers in a retail
setting. The concept for Cox’s
“Solutions Stores”: to make them
convenient, fun and inviting
places where people can check
out products and services and get
answers to questions, face-to-face
with a real, live expert.

“The minute a customer walks
in, we want them to have a positive
emotional experience,” said
Kimberly Edmunds, Cox’s senior
vice president of customer
operations.

The revamped retail eff ort began
in earnest earlier this year.
The operator has converted or
opened 26 stores with the new
template in three markets —
Hampton Roads, Va.; Omaha,
Neb.; and Orange County, Calif.
— representing 20% of its approximately
130 retail locations.

By the end of this year, Cox expects
to have opened Solutions
Stores in at least seven more markets,
including Las Vegas; San
Diego and Santa Barbara, Calif.;
Arizona; Rhode Island; Oklahoma;
and Kansas/Arkansas.

The tactic has invited comparisons
to other “try-it-out”
experience stores opened by
consumer-electronics companies
like Apple and Sony, and
mimics the retail presences established
by wireless carriers
such as AT&T and Verizon Wireless.
But Cox vice president of retail
Tracy Nolan said the MSO’s
stores were conceived and designed,
from front to back, based
on the expectations of its own
customers.

“We were looking for the sweet
spot of what the customers wanted,”
she said.

The results have been positive,
according to Cox. The new Solutions
Stores have produced an
average 12% year-to-year growth
in sales of revenue-generating
units, which refers to individual
services like digital cable. Plus,
Nolan said, Cox’s sales of accessory
products such as cables, modems
and wireless routers have
had a huge increase because of
the new format.

The stores also move hundreds
of plush dolls of Digi, the
operator’s spaceman-like mascot,
which sell for $12 a pop. “It’s
a hot-selling item,” Nolan said.

WIRELESS IN THE WINGS
Not coincidentally, Cox debuted
the Solutions Store concept in
the three markets where it plans
to launch wireless voice and
data services — a notoriously
competitive sector, with between
three and seven providers
in any given market. Th e MSO is
still testing its wireless services
with employees and “friendlies”;
initially, it expected to launch in
the spring of 2010.

Edmunds said the need to have
a stronger retail front to compete
in wireless was definitely important,
but that it was just one factor.
“I think maybe wireless accelerated
us there, but we
would have headed
there anyway,”
she said.

Nolan, who
joined Cox in
April 2009, has
years of experience
in the wireless
industry. She
was the manager
of retail stores
for Frontier Cellular,
acquired
by Bell Atlantic
in 1999, and later
became regional
president of Verizon
Wireless for
the Illinois/Wisconsin
region.
“Hyper-competition
is coming to
the cable industry, and our competitors
have strong retail solutions,”
Nolan noted.

When she arrived last year, Cox
already had conducted research
preparing for the enhanced retail
strategy. The company wanted to
find out exactly what its customers
wanted in a store, and what
they were missing from the current
retail locations where consumers
pay bills and swap out
set-top boxes.

From surveys and focus
groups, Cox learned consumers
wanted stores to provide
four key things: a place to learn
more about products and services;
one-stop shopping for
all of the operator’s offerings;
immediate, personalized service;
and the ability to get all
accessories (like cables or wireless
routers) so they could go
straight home and set their services
up.

“We’ve really transformed the
stores that were transactional
based,” Nolan said.

HANDS-ON DEMOS

A key section of the stores is the
“learning lounges,” where staff
specialists demonstrate how to
use specific products and hold
scheduled seminars.

Many existing Cox customers
aren’t aware of the breadth
of video-on-demand the operator
offers, said Ramon Murray, a
“solutions educator” at the new
Cox store in Chesapeake, Va., in
the operator’s Hampton Roads region.
Digital video recorders also
generate a lot of interest.

“They say, ‘Wow, I didn’t
know this was available,’ ” he
said. “Oftentimes they’ll come
in to pay their bill, then end up
sitting with me for 15 minutes,”
he said.

That more consultative selling
approach is effective because
it builds trust, according to Edmunds.
“When [customers] get
what they need, they’re happy,
they’re satisfied,” she said. “We’re
not selling them something they
don’t need.”

The company typically has
taken 10 to 12 weeks to convert
a billing center into a Cox Solutions
Store, though staff training
starts up to five months prior to a
relaunch. For a new location, the
process takes nine to 12 months
from site selection to opening
day, Nolan said.

Cox opened seven new locations
in Omaha, Orange County
and Hampton Roads, using retail
mapping software to identify
areas that would be more convenient
for customers, among other
considerations. “The traditional
billing centers may not have been
where our customers lived and
shopped,” Nolan said. “Customers
don’t want to go more than an
eight-minute drive.”

TOUCH IS KEY
Cox executives acknowledged
the high-touch, high-traffic
retail approach is a comparatively
pricey proposition, but
they said it’s crucial to boosting
customer awareness and satisfaction.
“There are portions of
it that are rolled into the cost of
doing business, because we’re
in a competitive environment,”
Edmunds said. “We’re doing
this because our brand needs to
stand for something.”

As Murray put it: “A lot of people
are surprised that we’re bringing
customer service back into
style … Customers are really satisfied [that] they can come in and
talk to us.”

Cox’s Solutions Store strategy:

Concept: To provide an inviting, conveniently located retail environment for customers to experience Cox products and get information in person from staff experts
Initial markets: Hampton Roads, Va.; Omaha, Neb.; Orange County, Calif.
No. of upgraded/new stores: 26, or 20% of 130 retail locations
Stores expected by 2015: About 200
Location sizes: From mall kiosks to a 4,000-square-foot store
Avg. no. of employees per store: 14
Expected no. of visitors per day to Cox stores nationwide: 20,000
SOURCE: Cox Communications

November