Charter Builds Subscriber Loyalty

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Charter Communications will reward its customers for buying products from the company, with more points the more they buy.

The operator launched its “Live It with Charter” rewards program nationally last week after a year-long trial in the MSO’s Eastern Division. The program was offered to only 5% of the division’s base — about 100,000 customers — in case the program did not meet Charter goals, said Phil Bellaria, vice president of customer loyalty and retention.

The trial had two goals: to see if loyalty program members retained their services as a higher rate than a similarly situated control group; and to see if it improved revenue. Bellaria said the program proved itself on both points.

Although the program and its Web site, www.liveitwithcharter.com, are not set up to sell, program members appeared to be more responsive to upselling than people who were not in the program, he said.


Consumers can opt in to the program at the Web site. They are awarded 10 points for every $1 they spend on Charter services, unless they spend more than $125 a month. These high-value customers get 15 points per dollar per month.

The company has set up a “digital mall” in partnership with Mall Networks Inc. of Lexington, Mass., a provider of merchant-funded loyalty shopping solutions. Subscribers can spend their points on entertainment-related products, such as digital cameras or HDTVs.

Customers can earn extra points for adding services, such as a digital-video recorder, and retaining it for at least four months; or for signing up for electronic funds transfers. Other rewards include a $3.99 bill credit for the sixth on-demand title a customer buys in a two-month period. Program members will also be eligible for “life experience” prizes, such as programmer-funded sweepstakes.

Individual Charter systems have dabbled in loyalty rewards. The Reno, Nev., system tested “VIPspree,” a credit-like card mailed to its best customers that could be swiped in readers at participating local merchants for monthly discounts. But Bellaria said the company didn’t want to launch a national campaign until it could measure effectiveness — retention and revenue growth — and the company was confident it could deliver good customer service and high-value products.

Pete Cirelli, Eastern Division vice president of sales and marketing, and Brian Kryzanski, director of retention and loyalty took on the task of locally funding and designing the program.

In the past, loyalty programs have come and gone because it is a challenge for cable to continue funding such marketing programs, Bellaria said. (Cablevision Systems is one of the few with a long-term program, Optimum Awards, which provides customers with discounts at other Cablevision-owned properties such as Clearview Cinemas.) But Charter has been planning a national loyalty program for three years, he said, adding marketers believe they have tracking methodology in place to prove the program is cost-effective.

<p><br>At a Glance<br><br> Charter’s Loyalty Program<br>Levels:</p>


Bronze: Customers spending $64.99 or less monthly


Silver: $65-$94.99 a month customers


Gold: $95 to $124.99 a month


Platinum: $125 a month an up



Benefits:


10 points for every $1 spent by first three levels: 15 points per dollar for platinum customers.


Entry to sweepstakes underwritten by programming partners, eligibility for product discounts on upgrades.


Extra points awarded for signing up for electronic funds transfer, or upgrading and keeping a product such as a DVR for at least four months.


Points can be “spent” at the Charter Mall, operated by vendor Mall Networks. Premiums are entertainment-related items such as MP3 players and digital cameras.

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