Charting a New Course in Marketing

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Barely four months into his job as Charter Communications Inc.’s senior vice president of sales and marketing, Jim Heneghan has already managed to turn the MSO’s marketing strategy upside down.

Back in July, Heneghan headed Charter’s ad-sales division. When asked to expand his responsibilities upon the departure of former marketing chief Kip Simonson, he saw an opportunity to pass the bulk of the decision-making power to the mavens in the field.

Before, there was little, if any, local-level customization. The tactic made sense when it was first implemented. After all, Charter was created by a series of wide-ranging and disparate acquisitions in the late 1990s and early 2000 that gave the company a patchwork of cultures and styles.

TIME FOR CHANGE

The properties needed to assimilate into a cohesive unit, said executive vice president of operations and customer care Mike Lovett. Broad campaigns that helped the company move forward as a whole were a practical strategy.

“Having central control over marketing made sense in 2003 and 2004 because we needed to draw a strong line for what we stood for,” Heneghan explained. “We were also aligning our team and refining our database. We needed to spend some time to better understand our customers.”

Added Lovett: “We also didn’t have the talent in the field that we felt could oversee our marketing efforts at the time. Now we do. Our bench is deep enough to handle a decentralized marketing environment.”

There were also the pesky financial pressures that Charter was living under late last year, which prevented the company from being able to truly market its products and services effectively. The MSO couldn’t afford to let its systems undertake marketing plans that weren’t going to have big economies of scale behind them, according to interim CFO Derek Chang.

Said Lovett, “You have to remember that last year, we were operating on a week-by-week basis.”

A broad refinancing of Charter’s massive debt load earlier this year gave the company more wiggle room to spend money on things like marketing.

Coupled with a stronger talent pool at the local level, Charter’s top brass believes it’s now time to decentralize the MSO’s marketing efforts.

“We have now scrubbed our subscriber lists, and we can differentiate our conversations and marketing plans based on a number of factors we now know about our customers today,” said Heneghan. “A centralized approach going forward just wasn’t going to make us nimble enough to talk to our disparate customers.”

Tim Kelly, the corporate director of marketing for the core video product, said Heneghan came in with a baseline of respect for what he’d accomplished in ad sales.

“Collectively, there was a sense of excitement when Jim took the reins of marketing,” said Kelly, who came to Charter from EchoStar Communications Corp. “He has a well-run department that sets and meets aggressive goals … and we are excited about getting some of those wins under our belt.”

He added: “Coming from Charter Media, he brings a unique perspective into marketing and is able to challenge areas that have not been challenged in the past.”

FOCUS ON RETENTION

One of Charter’s biggest initiatives going forward is an extensive customer-retention plan. It’s little wonder, considering the MSO has lost over 100,000 customers in the first nine months of the year. To begin, Heneghan said, he wants Charter to begin treating its customers differently.

“I’m surprised that as an industry we have not segmented our customers more thoroughly,” he said. “Three years ago when I came here to Charter in charge of ad sales, we treated all our clients the same. The big clients got the same things as the little guys.

“Today, our big clients are rewarded accordingly. We have not done that much with our customers and we should.”

Heneghan also wants to reward and acknowledge customers that stick around for more than a few months. “We’ve contacted and done things for customers after their first 100 days,” he said. “I want to start doing something for them on the first anniversary and beyond.”

Charter’s corporate marketing department will continue to craft overall guidelines for marketing campaigns, but the strategic decisions on how and when efforts are rolled out will be made by regional and local marketing executives.

Charter has also begun crafting a stronger retail presence in its service territories. The MSO is working to secure shelf space in more local consumer-electronics stores — local, independent shops as well as national chains — where Charter employees will sell products and services.

The MSO will offer “spiffs,” or commissions, to CE store employees where necessary. Charter is already installing billing computers in some CompUSA stores to help facilitate sales. A Charter salesman can access the MSO’s billing software and automatically sign customers up for service or check to see what services might make sense for that particular customer without having to contact a call-center representative.

AD-SALES TIE-INS

Heneghan has also asked his ad-sales and marketing departments to work more closely together going forward.

“We operate in a lot of 'C’ and 'D’ counties, and the ESPN bus doesn’t come to our markets very often,” he explained. “We have to begin running marketing and ad-sales campaigns together more often to make sure we are being as efficient as possible. And our teams want to work together. We’re already seeing more shared promotions in the first round of budget proposals.”

An example of that teamwork: A local Mercedes-Benz car dealership in Long Beach, Calif., wanted to participate in Breast Cancer Awareness Month in October. The dealership ran ads on Lifetime Television, which also televised special programming and PSAs on the issue throughout out the month, advertising the fact that any time one of the cars from the dealership went out on a test drive, it would make a donation to a local clinic.

“Our network partners bring us tremendous opportunities to tag team, and we want to do much more of that going forward,” Heneghan said.

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