Forum: A Mainland Approach to Generating Customer Loyalty7/05/1998 8:00 PM Eastern
Customer loyalty is one of the toughest challenges in thecable business. By comparison, the technical challenges of delivering information over ournetworks are simple.
The scramble to get customers -- a key feature of ourbusiness in its early years -- is now replaced by the challenge of keeping customers. At atime of increasing options for entertainment services, why do they need cable? Why shouldthey count on us to deliver Internet or telephone services? How do we convince them toexpand the services that they buy from us?
Here's a formula for customer loyalty that is nottaught in business schools: Give away something that people value; tell them in as manyways as you can that you're doing it; and, with patience, watch the costs of the giftdisappear -- replaced by customer loyalty that adds profits to the bottom line.
Experts in management will tell you that a giveawaydoesn't convert to direct profit on a balance sheet. But, they haven't paidattention to one of our industry's greatest success stories and the benefits thatit's yielding.
When I became chairman of Cable in the Classroom, I joinedmy predecessors in accepting the challenge of building on the most dynamic gift that anyindustry is giving to society -- providing schools in our communities with freebasic-cable service and more than 540 hours of commercial-free, educational televisionprogramming each month.
In the nine years that Cox has been committed to CIC,we've concentrated on the impact that it has on our schools. It's now time tolook at the effect that CIC is having on our communities. There's somethingsignificant going on -- CIC is no longer an island within our company.
COMMUNITY RELATIONS ON THE MAINLAND
In some companies, community-relations endeavors are anisland unto themselves. At most, these efforts to influence goodwill in a community areconnected to the mainland of day-to-day business by no more than a flimsy causeway.
At Cox Communications Inc., we're changing the"geography" of marketing. We are making community relations a vital part of ourmarketing. This "mainland" approach to community service is paying off.It's not just a way to do good in the communities that we serve: It's aninvestment in our customers and in what they care about.
Over the years, CIC quietly provoked new thinking aboutmarketing because it gave us a compelling reason to take community service seriously. Byworking with schools, we started to learn more about community leaders. By working withteachers, we started to promote an entirely new way of valuing television as a learningresource for schools. By providing something good for kids, our message went home toaffect the perceptions of parents. By publicly supporting education at a time when it tookso much political heat, our message influenced entire communities from Main Street toCapitol Hill.
CIC affects the internal organization of our company. Itcreates new collaborations among managers and employees. It supports our identity amongour customers and inspires loyalty that promotion dollars alone can't purchase.
CONNECTIONS THAT LAST
Consider the comments of Patricia Sylvia, our manager ofcommunity relations in the Cox system in Rhode Island. There's a new dynamic in hersystem, she reports. Unlike before, marketers and new-product managers now come to her foradvice and help. Why? They want direct communication to customers. Who has the rightconnections in the market? The person closest to community service.
Cox's educational commitments in Rhode Island laid afoundation where customers see Cox as a real partner in education. The billing insertdoesn't merely carry promotion for pay-per-view or sports: That information sitsside-by-side with news about what we are doing for, and with, more than 300 schools.
According to Sylvia, the successes of the externalpartnerships have prompted the formation of new, internal partnerships. The strategy:"Look to the local community. Figure out what's important there, then tie Coxinto it." The results: "It's value," she says. "If you build onfertile ground, you can launch new initiatives successfully. It takes work; itdoesn't happen overnight. But when we have a new service or project, we have a venuefor it."
Long-term, supportive relationships take time to develop.As with the launch of CIC, it took years of dedicated support to increase its influence inthe nation's schools. Initially, it took effort to identify and support CIC's"early adopters," while the industry worked feverishly to connect more than 80percent of the nation's schools. It took enthusiastic promotion on the part ofprogramming networks and collaborations with major educational organizations to prove thevalue of our resources. And it takes refreshing new ideas like "Cable in theClassroom Comes Home" to reinvigorate cable's message of support forAmerica's schools.
Bruce Smith, the media-relations manager in our Phoenixsystem, reminds us of the value of staying connected to educators. Not only is shereaching out to educators, but she's actually bringing them inside the system'smarketing efforts. An "education delegation" that includes teachers,administrators, technology and media specialists and others from one of the nation'sfastest-growing communities meets monthly as a sounding board for new ideas. It acts as anadvisory group to identify how to increase usage and awareness of Cox's technology asa teaching tool in the classroom and how to enhance students' ability to learn. Itisn't Cox employees working alone to build programs like a new Web site to promoteeducational resources for Phoenix: The educators are building it with Cox.
Smith describes the purpose of public affairs as anopportunity to manage and leverage intangibles that reinforce Cox's position as ananchor in the community. Then she quickly observes, "How do you calculate the valueof an endorsement from a school superintendent who says, 'Thanks to our friends atCox Communications, we're able to recognize and provide grants to teachers who areadvancing the use of technology as a teaching tool?'"
Like many of our other systems, Phoenix seeks outopportunities to showcase cable's value in the information age. Recent activitiesincluded "Wolves @ Our School Day," a nature-science project with DiscoveryChannel that was conducted in six Cox markets. It included teacher-technology workshopsand a family movie night highlighting the Wolves @ Our Door program, and itshowcased the power of high-speed Internet access and provided the venue to upsellCox@Home to parents. Our systems also partnered with Disney Channel for an interactiveonline event on animation and the arts, providing the same community-relations/marketingopportunities.
People will soon have many more options for television,telephone and broadband services in Phoenix and in other markets around the country. Whatmakes us so special in this competitive environment? What makes our services the bestchoice for consumers? We are the only company that can be a full-service provider to ourschools and, because our systems are connected with their communities, we have givencustomers a reason to feel loyal to our company. And that goes to our bottom line.
MARKETING ON THE MAINLAND
At Cox, our new "geography" -- joining communityrelations and marketing -- is prompting our business practices to evolve. There'smuch to learn. CIC continues to expand our impact with school-to-home projects like CICComes Home and with teacher-training resources such as our own Multimedia Academy and theCable in the Classroom Institute. We are committed to providing one free cable modem toeach of our community schools where the services are available, and training on the usesof cable modems in schools illustrates the benefits of using these new devices in homes,as well.
Customer loyalty is not something that you win: It'ssomething that you earn. It takes effort to connect community relations with"mainland" business objectives, but it pays off by opening new marketingopportunities and new ways to renew and maximize our companies' vision and business.
Jim Robbins is president and CEO of Cox Communications Inc.