Driving subscriber numbers remains a goal of mostmultichannel providers. But increasingly, subscriber growth alone is not enough to measurethe success of a cable company's marketing team.
Newly named Cox Communications Inc. vice president ofmarketing Joseph Rooney said the company's main objective going forward is drivingwhat he calls "revenue-generating units" -- or RGUs -- rather than simply addingsubscribers.
"Everyone sees that this industry has changeddramatically in the past three years," he said. "We are in the revolution ofdigital voice, video and data, and a revolution of competition."
Although he wouldn't outline specific penetrationprojections for the MSO's new products, Cox "is going to grow like crazy"next year, Rooney predicted. He added that the company already has a strong field team inplace and "kick-butt" products to offer customers.
Each of the company's new products -- digital video,data and telephony -- represents an RGU, Rooney explained, and in many of Cox'slarger markets, customers are offered a choice of bundled services.
"You can have one customer with three differentrevenue-generating units," Rooney explained. "That's why we talk about ourgrowth as adding RGUs."
"The year 2000 is going to be about execution forCox," he added. But he doesn't plan to wait until next year to begin executinghis goals.
In mid-September, Cox executive vice president ofoperations Maggie Bellville announced Rooney's promotion. Within two weeks, Rooneyhad moved his wife and four children from their home in California -- where he had beenvice president of marketing, sales and programming for Cox's showcase Orange Countyoperation -- to Atlanta, where the MSO is headquartered.
"My first challenge is to hit this role up andrunning," Rooney said. With 18 years of experience in cable, he added,"there's an expectation that I don't have to learn the industry, thecompany and the people."
While in Orange County, Rooney was tasked with deployingall three new RGUs -- digital cable, telephony and cable modems -- for the first time atany Cox system.
The numbers in that system are impressive. In the last weekof September, Cox executives gathered several analysts there for a briefing, and SG CowenSecurities Corp.'s Gary Farber came away thinking that the company might exceed itspreviously stated target of 450,000 to 500,000 new-service customers by year-end.
In Orange County, Farber noted in a report, Cox had 36,741digital-TV subscribers, or 16 percent of the video base. That number is growing by 400 perweek, including some that Cox thinks are coming from direct-broadcast satellite.
High-speed-data service Cox@Home had 30,827 Orange Countycustomers, or about 25 percent penetration of online homes.
And the system had 23,457 phone customers -- a 21 percentpenetration rate of all video customers in upgraded areas, according to Farber.
Rooney admitted that the marketing team often debated aboutwhether they should speed up or slow down one or more of the product introductions, but itdetermined that "each product is significant in its own right."
He called data "a tremendous breakthroughproduct," for which cable has a window of opportunity to drive market share. Digitalvideo, too, is a key competitive advantage for Cox, Rooney added.
"It would be easier if one product stood out," heconceded, "but it's important for us to focus on them all."
Now that new products are deployed in most of Cox'smajor markets, Rooney said, "We've got to refine marketing so we'repenetrating beyond 10 percent," and focus on bundled sales, marketing andinstallation.
Cox is moving toward creating new subscriber marketingpieces featuring all three products, training customer-service representatives to speakabout all three products and training installers and service technicians to handle video,voice and data. In Orange County, 30 percent of Cox's installers are already trainedon all three platforms.
Ultimately, Cox wants to deliver a single bill for allthree services, too.
Rooney said Cox would hold field trials in Orange Countyand another system this fall to see how different bundled offers affect retention.
"Customers may want flexibility on where the discountsare applied," Rooney said. For example, customers whose employers reimburse them fordata expenses may prefer to have discounts applied to their digital-cable bills.
Rooney's experience in Orange County has taught himthat retail partnerships will become increasingly important for Cox.
"When you buy a new PC, the question will be,'Which kind of high-speed modem do you want built in?'" Rooney said."Our relationships with retail will help them to convince customers that they needus."
In California, Cox has worked with major stores such asCompUSA, as well as with smaller retailers, including car washes that hold cable-modemdemonstrations while customers wait for their cars.
Char Beales, president of the Cable &Telecommunications Association for Marketing, gave Cox credit for promoting its newmarketing vice president from within, rather than going outside of the company -- or eventhe industry -- as many operators have done in recent years.
With his field experience, Rooney knows firsthand whatgeneral managers at the system level are looking for from a corporate marketing departmentand, perhaps more important, when to let them make their own decisions.
"We have very strong field marketing people who arevery strong-willed," Rooney said, "and that's good. It puts thedecision-making closer to the customer."