Marketers Debate Value of Bundle Discounts

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New Orleans-Consumers who purchase bundled packages of video, voice and data services expect to be rewarded with discounts from the bottom line, at least one marketing executive speaking here last Monday said during a National Show panel on marketing broadband services.

In consumer research done by Cox Communications Inc., discounts are "the first thing customers want" in return for bundling, vice president of marketing Joe Rooney said. "Close behind that was one bill, one company to call and a medallion level of service" as a reward for spending more money every month with the MSO.

As an example of better customer service, Rooney recommended that bundled-service customers should have guaranteed access to seasoned customer-service representatives when they call the company, which isn't necessarily a given in the days of rapid employee growth and turnover.

"Do we really want a new employee to be talking to a customer who's spending $150 per month with us?" he asked.

American Movie Classics president Kate McEnroe said cable operators don't need to focus on price discounts for newer services like high-speed cable modems until the market becomes more mature. In addition, she said, "We don't want to focus so much on price that it becomes a commodity."

AMC is developing ways to repurpose some of its television programming across other media, including enhanced television, broadband Internet services and even handheld wireless-communications devices.

Insight Communications Co. Inc. chief operating officer Kim Kelly said bottom-line discounts for bundled-service packages help to serve as a reminder of value, which, in turn, helps keep customers loyal.

The MSO is cautious about deploying more aggressive loyalty programs because it is concerned about degrading the perceived consumer value of its packages, Kelly added.

Rooney said the most effective gifts in a customer-loyalty program are those tied to the services a customer is buying, such as free or discounted premium-movie networks, or extra minutes of long-distance telephone service.