The approach of the CTAM Summit in “Comtown,” as some call Philadelphia, makes one's thoughts turn to cable marketing. And when it comes to cable marketing, this corner likes to turn to Bruce Leichtman, whose experience started with Continental Cable, evolved at the Yankee Group and emerged into customer surveys and data analysis at Leichtman Research Group.
He was feeling reflective. “As I look at it, there's two things that separate 2005 from 1995,” he said by phone from New Hampshire last week. “The first one is a positive from a marketing standpoint. Boy, it's a lot more exciting that it was a decade ago. There are so many more products and services to offer people. Even a decade ago it was, really, do you want fries with that? Do you want HBO and Showtime? Now it's just so much more. That makes it more challenging but a lot more exciting. There's a lot more things to sell — and a lot of better products to sell.”
The other big change is competition, with the advent of satellite TV and its 26 million customers. So the video market is now fairly saturated.
Cable has always been a universal service — “we're there for everybody” has always been the approach, abetted by Wall Street's focus on total customer counts.
But now, cable really has the high-end video product and the high-end broadband product, and that's not just on price, Leichtman said. The key is to target those customers who want those high-end products — HDTV, digital video recorders, on demand. Not everybody needs them or can afford them. If you try to oversell products to every customer, you end up creating churn.
Cable's doing a good job in some respects and not in others, the analyst said. “I think they're missing some huge opportunities on the HD front,” for example. “Because they don't feel the pain.” He sees maybe an 18-month window of opportunity to assert control over the HD category and those high-end consumers. Cable has the programming edge over DBS, and there's his oft-cited statistic of 12 million plus homes with HD sets and only a third getting HD programs.
Another cable advantage exists in the homes getting both on-demand and DVR services. But that's one of those edges that's difficult to articulate in marketing material. It's not just making a cute 30-second cross-channel spot: “It's something that has to be integrated into the whole operation,” Leichtman said. “And the CSRs and the techs have to be able to understand and articulate as well.”
With phone service coming, again he says to focus on the right customer and the right blend and set the right priorities. “Make sure you're using phone to help glue in broadband.”
“The question goes to the priorities. The priorities and the budgets. Those are two of the biggest challenges. Because the budgets aren't huge, and how many priorities can you have?”
So what's the top priority? “To me the priority is try to wrap up and glue those best customers.”