Every year up to 25 percent of the subscribers in a given cable system move. When they do, they may sign up with a new system from the same operator, a new MSO. But they are also six times more likely to switch to the competition, a direct-broadcast satellite provider or an overbuilder.
The Multiple Operator Subscriber Transfer (M.O.S.T.) program from Hamilton Direct provides a mechanism to keep the customer in cable's fold, often by transferring him or her from one operator to another—and beating the competition to the punch. Relying on a letter system sent immediately to customers, Hamilton helped Charter Communications in Los Angeles substantially boost its connect rate with moving customers. For its efforts with the MSO, Hamilton's M.O.S.T. program is being recognized as a second-place winner in CTAM's Customer Retention Case Study Competition for programmer/industry suppliers.
Neal Flyer, president of Chatsworth, Calif.-headquartered Hamilton Direct, said M.O.S.T. was created because cable operators do not have an effective and consistent method to forward and transfer customers within their own franchise area, or to other cable operators.
Operators participating in M.O.S.T. are provided with "new move leads" by others in the program.
Hamilton Direct's national data base now encompasses 49 million cable households, a total that continues to grow with daily updates. In addition to Charter, Hamilton Direct works with such cable operators as Time Warner Cable, Adelphia Communications, Cox Communications and Comcast Corp.
"With personnel-and-corporate ownership changes, this kind of marketing has not been a priority," said Flyer. "There was this kind of mentality among many cable operators that they would get the business anyway. That's changed of late with these days of increased competition. Cable operators are being more proactive in trying to retain valued subscribers."
The centerpiece for M.O.S.T. is a same-day letter program. Historically, direct-mail pieces from the local cable operator were forwarded to the folks who moved out, so there might be considerable lag time — and an opening for the competition — before contact with the resident takes place.
From May 2002 to April 2003, Charter's L.A. system had 10,900 new move leads within its own franchise area and information from other M.O.S.T. MSOs.
Of that total, 3,600 (33%) were moving from other MSOs within the U.S., 1,600 (14.7%) were moving from within the Charter system) and 5,700 (52.3%) were moving but didn't provide a forwarding address. Charter's goal: to generate a 4% immediate connect rate from customers moving into the system, obviate alternative-provider threats and lost revenue from sign-up lag time.
"Move-in" letters — thanking customers and informing them of their new cable provider — were mailed to customers tranferring from another cable system. An "intra move" missive — thanking them for their past patronage while apprising them that Charter was still their operator — were disseminated to those moving within the franchise area.
"It's not too often that you get a message thanking you for being a valued customer," Flyer said.
Those who did not provide a forwarding address at the time of the disconnect received a "sorry to see you go postcard," which stated that the operator wanted to let them know about their new cable provider. Research indicated that 65% of this group really didn't move — but just disconnected.
The results were strong. Charter's L.A. system experienced an overall connect rate of 23.6% among "move-in" customers within 14 days. A breakdown showed that 24.6% of move-in, 14.7% of intra-move and 21.9% of no-forward customers reconnected. In signing up subs within two weeks, Charter generated an additional month of revenue, translating into $167,050 in revenue. Moreover, Charter kept the 2,570 new customers from signing up with alternative providers.