Building Loyalty In Reno

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Come July, the card — not the check — will be in the mail for Charter Communications Inc. subscribers in Reno, Nev.

To show appreciation, and to help retain customers, the cable provider is testing a loyalty program with a branded discount card, good at 121 merchants throughout the “Biggest Little City in the World.”

The cards are worth $500 in discounts at establishments ranging from Barb’s Big Pig Smokehouse to Tony Roma’s, and for services ranging from spa treatments to bowling. Discounts per merchant range from $3 to $25 in value.

NEW DISCOUNTS MONTHLY

The Charter-branded cards contain cable account information. As long as the consumer remains a customer in good standing, a subscriber can take advantage of the discount offers that may be revised each month.

Mailings and a new Web site will advise cable customers on exactly which offerings are available each month, and customers can track their own per-month savings by tallying the discounts they have already used.

The Nevada system is the first to roll out the card, developed by Complete Access of Portland, Ore. The company founders are veterans of Entertainment Book, the localized coupon tome.

Complete Access deals with participating merchants, installing proprietary card readers in their establishments, company president William Roskowski said. Merchants subsidize the program but pay only for the discounts they honor, Roskowski said.

“There’s no cost [to a merchant] unless a customer comes in,” he said. Charter also pays a percentage of the discount.

Michelle McLin, director of sales and marketing for the Nevada market area for Charter, said she hoped 30 merchants would come on board, allowing the company to offer $75 in monthly discounts.

The level of acceptance by merchants so far has been a pleasant surprise, McLin said.

Charter selected Reno for the test in part because the McLin had experience with the program. Complete Access conducted a trial run of the smart card program with Comcast Corp. in Fresno, Calif., where McLin worked at the time.

The Reno market has been a tough one for Charter. During franchise renegotiations in 2004, a consultant’s report took note of frequent outages, price hikes, “surly” customer service and no-show service appointments. A citizen’s panel suggested the operator be given a five- or eight-year renewal, but the city eventually agreed to a 15-year extension based on Charter’s assertions that service would improve.

The market is also very competitive, as direct-broadcast satellite providers have captured more than 15% of the local multichannel video base, which is also served by a multichannel multisource distribution system “wireless cable” provider called Quadravision.

STICKER SHOCK AID

Complete Access executives said the loyalty program could help soften the fall as Charter initial package discounts end and subscribers are hit with a full-price bill.

The program also can be perceived by consumers as cutting the cost of their cable bill if a subscriber uses the discounts effectively.

McLin said the system has already sent cards to a segment of its subscriber base. “They’ve called to say 'What is this?’ or 'Wow, that’s great. I think I’ll stay,’ ” she said.

Cards will be mailed throughout the Reno market beginning July 1.

Roskowski said his company is just beginning talks with other operators about rolling out similar branded loyalty cards.

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