News

Tough Sell: How to Market a Formerly Bankrupt Firm

9/21/2012 10:48 PM Eastern

Charter Communications overhauled its programming, high-speed Internet and phone packages. Now it’s Jonathan Hargis’ job to convince people to buy them.

Hargis, Charter’s chief marketing officer, is no stranger to a difficult sell. As CMO at Cablevision Systems, he spent about 12 years helping to build one of the strongest brands in cable.

Under his watch, Cablevision grew to the most highly penetrated MSO in virtually every product metric, employing a marketing strategy that created laser-focused messages for each targeted customer segment.

Hargis, who joined Charter in April, is incorporating much of that same strategy at his new shop, educating customers about the MSO’s more robust products and services. That involves not only highlighting the speed and service advantages of Charter products, but convincing former customers that the product they left behind has changed dramatically.

“Many satellite customers left [Charter] five years ago,” Hargis said in an interview. “Our video product is not the video product they left for satellite. You want to make sure they understand we have content you can take on the go and tons of HD and a real dynamic DVR product. That’s not the same as three to five years ago, when customers may have left Charter for satellite.”

Hargis breaks marketing into four segments — direct response, image/branding and customer education. The latter may be most important, he said.

“A lot of customers don’t really understand the full value of the products,” Hargis said, adding that many don’t realize, for example, that they can get their voicemail online. “These are really, really fabulous services, that if you don’t educate customers on how to use them, it doesn’t really add to your value.”

In addition to opportunites created by new products and services, Sanford Bernstein cable and satellite analyst Craig Moffett wrote in a recent report that Charter’s large non-video customer base — numbering almost 1 million customers at the end of the second quarter — also represents an opportunity to capture market share from satellite.

“Non-video subscriptions are Charter’s Trojan Horse,” Moffett wrote in a recent research note. “By pressing their advantage in broadband first, they re-open the door with subscribers who had written off Charter years ago. Eventually, they will use this toehold to regain video subscriptions from satellite.”

The new approach could entail a total rebranding, along the lines of Cablevision’s Optimum rebranding or Comcast’s Xfinity campaign. “That’s an option that remains open to us,” Hargis said. “But there are no immediate plans to do so.”

Charter is not afraid to offer discounts to nonsubscribers — it’s offering a 12-month, $29-perservice triple-play promotion that increases by just $20 per month after the promotional period ends. Other market segments will be targeted through programming packages and services that fit customers’ needs. “We’re not going to spend a lot of time telling people they made a bad decision five years ago [when they switched to] satellite,” Hargis said. “What we’re going to reinforce is, ‘Come take a look at Charter. We’re not the cable company you might think we are.’ ”

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