The average retail store has thousands of products, each with different demand levels and marketing commitments. Retailers have been successful in their sales for multiple products by prioritizing their marketing. They have established criteria to decide who markets the product, who gets what shelf space and who gets the end cap.
Both satellite and cable providers are experiencing a similar phenomenon of multiple products to market — more channels, more customers, more choices. Both industries have experienced phenomenal growth in the past few years. Historically, technological constraints with bandwidth (channel capacity) have been the barriers. Many programmers had ideas and services they wanted to provide, but technology and bandwidth did not allow for that. Now that technology and capacity have assisted in overcoming that hurdle, a new challenge has presented itself – garnering marketing shelf space and distributor "mindshare."
Distributors large and small face strategic and growth issues that include digital-cable migration, defense against direct-broadcast satellite/retention, video-on-demand, high-speed data, telephone services, commercial sales, HDTV, home networking, pay-per-view and multicultural marketing.
These strategic issues do not include the day-to-day operating issues that distributors face in dealing with customers, employees and partners. Now that programmers have multiple-channel offerings, distributors have even more decisions to make regarding promotions. There are a variety of ways distributors can promote programming, including guide advertising, bill inserts and direct mail. How the resources are divided and used varies.
A distributor's in-box is filled with promotions. They must have some sense of how often they can run promotions. Frequency must be reviewed from a cost standpoint, from a consumer perspective — what amount is tolerable, and from an effectiveness perspective — which promotions garner new customers and which ones retain current customers. Response rates and offer management are also key considerations in the decision-making process.
Distributors have their own responsibilities when it comes to tracking marketing initiatives. The customer-relations management systems need to be in place, as does the ability to track all channel and distributor promotions to determine what is actually having a positive impact on revenues. This will play a key role in deciding which promotions to execute.
How do you get the prime marketing shelf-space that only a select few can have?
Programmers have multiple offerings, and with the continual mergers and acquisitions, it is likely that single programmers will have double-digit channel offerings. A cable representative used to take a one-hour meeting with a distributor to sell-in marketing programs for one channel. Now that same hour is used to sell-in initiatives for multiple channels.
Programmers can no longer just send in a promotion that they believe is good and expect it to garner the appropriate attention without some additional punch to get through the noise and make the services as sticky as possible. Distributors need to know how they benefit from running your promotion.
For both distributors and programmers to be effective in the current climate it requires marketing discipline. The keys to marketing discipline are frequency, consistency, targeting and tracking.
The change in technology has given the industry a host of new challenges to address. More channels, more choices, less shelf space. Deciding who gets the end cap is no easy job.