Cable Marketers Reveal Their Retention Strategies

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Atlanta -- When asked how they tried to retain cable
subscribers, marketing executives at last week's National Show here cited several
tactics, including hiring customer-service-representative specialists, running ads
attacking the competition and implementing direct-debit and loyalty/rewards programs.

At the "How Could You Leave Me?" session here,
Rick Sperry, vice president of marketing for Comcast Corp., stressed the importance of
customer interaction and ad campaigns that attacked competitors' weaknesses.

He cited Comcast's 309,000-subscriber Baltimore
system, which was able to decrease basic churn by 4 percent by consolidating its call
center and establishing "retention specialists" among CSRs, who use customized
scripts when talking with customers who want to disconnect. Sperry also reported a 7
percent decrease in premium disconnects by having CSRs leverage the additional channels
being offered by pay networks.

In addition, Sperry screened several of Comcast's
anti-DBS (direct-broadcast satellite) TV spots, which stressed the hardware costs of the
satellite service, the added high costs for additional outlets and the lack of local
channels. In contrast, the Comcast ads emphasized cable's benefits -- especially its
role as part of the "electronic highway."

Sperry credited the aggressive campaign with limiting
Comcast's disconnects to DBS to 0.5 percent.

Angelina Li, vice president of marketing research for Cox
Communications Inc., said Cox experienced success with its direct-debit program, where
subscribers' monthly payments are automatically withdrawn from their checking
accounts. Li said Cox had found that subscribers using direct debit had a churn rate of
1.1 percent, as opposed to the average customer-churn rate of 2.6 percent.

Among the advantages of the program, she said, were the
fact that it appealed to a wide variety of customer segments, and that not actually seeing
a bill every month caused customers to be "less concerned" with the amount of
their bill.

Li also said this method of billing enabled operators to
"hide" rate increases.

Tom French, senior vice president of marketing for
Tele-Communications Inc., extolled the benefits of the MSO's new "TCI
Rewards" loyalty program as a way to retain subscribers in the face of increased
competition and dissatisfaction among customers.

French said the program, which launched in several key TCI
markets last month, has already exceeded expectations by achieving 15 percent penetration
in only three weeks. If the loyalty program achieves 20 percent acceptance, and it can
save 10 percent in controllable disconnects, French said, TCI's pay-out analysis
indicated that it should break even in approximately 16 months.

The keys to a successful loyalty program, French
emphasized, were a good database and the ability to segment profitable customers.

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