News

Retain Is the Name of This Digital Game

7/14/2002 8:00 PM Eastern

For one cable operator, the way to hold on to more customers in an increasingly competitive digital multichannel environment involves more communication within days after they switch on.

For another, the method may be just doing a better job of promoting a policy that's already in place.

As winners of the Cable & Telecommunication Association for Marketing's first-ever Customer Retention Case Study competition, four operators have this in common: They found a way to approach the matter, and their way worked wonders for their retention picture.

Adelphia Communications Corp., AT&T Broadband, Charter Communications Inc. and Cox Communications Inc. will highlight their honored efforts this week at CTAM's Summit in Boston.

Other projects from Adelphia and Cox — and one from Comcast Corp. — will receive second-place citations from CTAM and will be exhibited at the Summit. CNN and Multichannel News
co-sponsored the case study competition.

Charter's winning "Digital Activation" campaign, launched last September, was crafted to slice into the MSO's high digital-package disconnect rate.

Internal research revealed that digital subscribers were 65 percent more likely to cut off in the first four months of their service tenure, and that the majority of churning customers, in fact, made their call within three months after their digital install.

"The feedback inferred that subs were not educated efficiently about their digital installation, or using digital, or using their on-screen program guide," explained Charter customer-retention director Tom Brockhaus. "They were being challenged in numerous ways."

In the campaign, Charter service reps telephoned new digital subscribers within three to 10 days after their hookup, to thank them for selecting the service and inquire about any problems.

If the subscriber raises a problem, it's resolved before the call is over or other settlement arrangements are made. CSRs call new subscribers three times. On the fourth try, a recorded welcome message is left, voiced by Charter national spokesperson Dan Aykroyd.

At the same time, mailers are forwarded to each new subscriber within seven to 10 days after installation, offering service highlights, program guide tips and discount coupons. The coupons cover free pay-per-view or video-on-demand movies, $15 off Home Shopping Network merchandise and 20 percent off A&E Network or The History Channel gifts.

Eagle Direct developed the activation mailer, with some information customized for different Charter systems.

"The piece provides the education, while the call is to welcome customers in and check problems quickly," said Brockhaus.

Charter's monthly digital-subscriber churn rate has dropped to 5.2 percent over the first three months of 2002. That rate was above 6 percent a year ago. And in a recent study of 810 current and former digital subscribers, the churn rate was 25 percent less among those who received the welcome mailer, 36 percent less among people who answered the CSR call, and 53 percent less among subs who got both.

Importantly, a high percentage of digital subscribers wanted Charter to call them two or three times a year to check on how they're doing with digital.

"Our subs are giving us the green light to be more proactive with them," Brockhaus said. "Now, we need to integrate more strategies to take care of customers when they're not communicated directly, as well as address different demographic groups with specific messages."

He's reviewing some creative telemarketing and direct mail tactics for that purpose, as well as introducing new services such as interactive-TV product Digeo Inc.

AT&T REWARDS

Of the winning entries, AT&T Broadband has the longest-running project — "Rewards," inherited through its acquisition of Tele-Communications Inc.

TCI started the retention-provoking effort in 1998 "to reduce customer downgrades and increase the upgrade count," said AT&T Broadband retention manager Karen Valliant.

A play on loyalty campaigns prevalent in the airline industry and other sectors, "Rewards" awards points to AT&T customers who upgrade their service in some manner. Those points are redeemable for merchandise provided by a group of basic and premium cable networks, including gifts the programmers give away at cable convention booths, from T-shirts to CDs. MTV: Music Television, Home Box Office, and ESPN and the other The Walt Disney Co.-owned networks have been among the programmers involved with the effort all along.

The programmers subsidize the campaign's cost, through cooperative dollars and merchandise considerations.

A catalogue mailed to AT&T Broadband subscribers each year describes the point system and merchandise in detail, and supplements keep subscribers posted on new available items.

Subscribers can redeem their points for merchandise by dialing a designated call center, or logging on to a Web site set up just for "Rewards." Frequent users of the program can keep an account of their redemption on the Web site and check their point totals at all hours.

From Valliant's vantage point, "Rewards" continues to reward: Almost 700,000 subscribers have used the program during its run, accumulating more than 1.5 million gifts.

Churn among program enrollees has declined by 27 percent, while digital service downgrades have been reduced by 44 percent. Overall, AT&T Broadband estimates that it saves about $90 million per year in churn-related costs because of the campaign.

COX'S 'EASYPAY'

Recurring direct debit or credit-card payment plans have been available to Cox subscribers since 1999. But only about 5 percent of the MSO's customers were going that course, and when two research inquiries were conducted a year later to determine why, the conclusion was that the option was little known and not aggressively marketed.

So why get aggressive in May 2001 through a "EasyPay" promotion? The research also showed that with a debit or credit card option, more subscribers surveyed put themselves in the "less likely" churn camp.

"The last outcome woke us up," said Cox director of competitive strategy and retention Warren Jones.

With EasyPay, Cox systems used cross-channel TV ads, bill inserts and point-of-purchase displays at their local offices to highlight the payment option and use it through Cox's Web outpost.

Jones and his staff advised systems to run the cross-channel spots in heavy rotation for a month, send out bill inserts to one-third of their customer universe the following month, then bring back the spots.

"We use cross-channel to build awareness and the inserts to drive customers to the online payment area of our Web site," Jones explained.

Over the course of three months, every Cox customer has a bill insert in his or her possession highlighting EasyPay, and the mailer process is conducted on a quarterly basis.

Cox projected that the campaign would increase its debit or credit payment customer base by 1.6 percent by the end of this year.

The mission was more than accomplished: 468,000 subscribers, or 7.5 percent of the operator's universe, were EasyPay option users at last year's end. That's about 123,000 more subscribers from launch date.

More than 65 percent of the payment plan users go online to apply it. Since then, the EasyPay universe has crossed 500,000 subscribers.

In Omaha, Neb. — one Cox market that made this option available three years ago, and did promote its existence all along — more than 15 percent of customers use EasyPay. "A lot of our national program is modeled for the most part on what that system did," Jones said.

ADELPHIA'S ECONNECTION

Adelphia's CTAM-winning retention vehicle is eConnection, a quarterly e-mail newsletter delivered to users of Power Link, the operator's high-speed Internet access service. The newsletter contained info on new Power Link content, plus updates on other Adelphia services.

Banner ads from various cable networks helped Adelphia keep the e-mail delivery and format costs down.

More than 255,000 Power Link customers received the first issue of eConnection
last October, with more than 78,000 hits, for a response rate above 30 percent, according to case study documentation provided by CTSI, an agency working with Adelphia on the project. About 701,000 Link subs picked up the second issue this past March, with more than 106,000 hits recorded, or a response rate in the neighborhood of 15 percent.

Multichannel News
invited Adelphia to discuss the winning case study in detail through an interview. Adelphia agreed to participate, but could not arrange the interview by press time.

Adelphia is picking up a second-place CTAM retention case study citation for its "Awards" project. The other second-place citations will go to Comcast for its "Save Database" work, and Cox for its performance among in-bound save teams.