Seeing the Big Picture6/13/2009 2:00 AM Eastern
For over a quarter century, Sam Howe has taken calculated risks to create brand recognition and loyalty among cable consumers with much success.
As the chief marketing officer at Time Warner Cable, Howe also helped to create an environment that focuses on company-wide coordination to drive business objectives. He has pushed for consistent and targeted marketing messages that drive the bottom line and create customer loyalty.
“Sam has been instrumental in helping build Time Warner Cable into the powerhouse that it is today,” said Promax/BDA president Jonathan Block-Verk.
Howe considers himself a pragmatist first and a risk-taker second. “A so-called risk doesn't seem so risky if it's doable,” he said. “We tend to make things too complicated and complex. Making and building brands isn't difficult or mysterious. It's all in the execution.”
When Howe joined Time Warner Cable in 2003, he oversaw marketing of the company's digital phone product, a relatively new offering for U.S. cable companies at the time. But Howe, who previously worked for Telewest, had been successfully pushing phone service to consumers in the U.K. for years.
Telewest (which has since merged with rival U.K. operator NTL to form Virgin Media) deployed the first triple play product of voice, video and high-speed data in 1995.
The competition was stiff, but there were advantages to be had. U.K. cable companies had a difficult time wresting consumers away from News Corp.'s British Sky Broadcasting, a well-entrenched satellite-TV competitor. However, telephony rival British Telecom's reputation was tarnished with poor reliability and customer service. It wasn't long before Telewest was outselling BT in the phone game, and the ability to bundle its other offerings with phone service gave it a competitive edge.
That experience helped Howe when Time Warner Cable hired him to market its product. Most MSOs were bundling voice with video and high-speed Internet service. But Howe knew from his U.K. experience that phone service could be sold on its own merits.
When Time Warner Cable launched digital phone service in San Antonio, Texas, in 2004, it was the first product customer-service representatives pitched to customers who called in. TWC was successful at luring thousands of phone customers and then upselling them to the core video product.
Howe's years of marketing experience also come into play as the company battles intense competition from companies like Verizon Communications. When the telco launched FiOS TV in New York City last year, Time Warner Cable — and Howe — were ready.
TWC kicked off a multi-tiered marketing approach to combat Verizon's encroachment, including the introduction of a “Price Lock Guarantee” offering customers the chance to receive services at a fixed price for either one or two years.
The contracts were a new push for Time Warner Cable. Cable operators hadn't made wide use of the contract concept in the past. However, the concept has worked well for satellite companies and cellular firms.
After only a few months of offering its price-fix guarantee in Staten Island, overall churn was down 23% and voluntary churn — customers who chose to drop service, rather than being disconnected for non-payment, for instance — was down more than 40%. Howe said more than 90% of Staten Island's customers were choosing the two-year contract option. The concept has been rolled out throughout Time Warner Cable's footprint and 10% of its customers have signed up.
“There was some concern about losing revenue at first,” he said. “But we learned that customers wanted security and they wanted to manage their future with us. The Price Lock Guarantee does that.
“It looks risky because it wasn't the way we traditionally did things. But the concept captured customers' imagination,” Howe added. “And we found that people bought more than they might initially because they knew how to manage the costs over the long term.
“At the same time, we're not relying on the evil yearly rate hike. This isn't about a promotion. It's really about helping our existing customers manage their expectations.”
Time Warner Cable has also strengthened its brand by giving consumers power over the products and services to which they subscribe. Many of the MSO's products, including Start Over and the TV Everywhere initiative, are designed to give customers the ability to control their entertainment environment — hence the company's tagline, “The Power of You.” Consumers want to feel like they are in charge, Howe said.
Howe also knows that marketing successes don't happen overnight. It's imperative to make good choices and stick with them, he said. By being methodical, companies have time to thoughtfully respond to competitive challenges. But thoughtful doesn't necessarily mean risk-averse.
Howe has always thought outside the box, said Cable & Telecommunications Association for Marketing CEO Char Beales. As the top marketer at MSO Centel Cable (which sold out of the business in 1989), Howe gambled that consumers — who were interested in cable's expanded lineup of programming but not used to paying for TV — just needed a little taste of it to adjust to the idea of paying a monthly fee. The company's “60 Days of Free Cable” was daring but it worked, according to Beales.
Customers didn't really understand what cable was and what it offered, Howe said. There was some internal concern at the time that that by giving away service, the value of that service would be nullified. Just the opposite occurred.
“We ended up with a 50% penetration rate after one year,” he said. “That would normally have taken three to five years. We added 70% more new customers and we lost 20% of them when the promotion was over. But in the end, we got the penetration rate we were seeking all along.”
“Sam really sees the big picture and he's very good at figuring out what to do first,” said Beales. “He grew up in this industry and he has a keen understanding of what works. He's not a command-and-control person, but his knowledge and experience gives him the ability to lead and he does it well.”