The race is on. It's a race to rebuild our cable systems, deploy new services and acquire new revenue-generating units. In the current competitive environment, there is no time to waste. Though, while we focus on the future, we must not lose sight of what got us to where we are today-our strong customer base.
Right now, the most valuable resource we own is not the miles upon miles of two-way plant or our state-of-the-art headend equipment. Our true advantage is the customer base and potential customer relationships that we have.
Our competitors certainly recognize this. They have built their business model upon taking away our customers. New entertainment and communication service providers' growth is directly related to the cable industry's customer loss. So, as we implement new marketing strategies to launch new services, it is critically important to increase brand loyalty and maintain our strong customer base.
The battle begins before
our customers are lured away by a competitive offer. While many operators are focused on expensive win-back tactics, few have implemented strategies to keep customers before they defect. By implementing brand loyalty strategies now, cable operators can lay a firm foundation for growth.
It goes without saying, but is worth repeating: it's more expensive to win back a customer than to keep one. But in order to retain our customers, we must first realize why they might leave us in the first place.
LOYALTY BASED ON 'RELATIONSHIP'
While price sensitivity and poor service can lead to customer defection, neither is the primary reason that customers leave one company or brand for another. Customers leave because they do not have a relationship with their current provider. The traditional relationship between customers and their cable company has been, for the most part, a monthly bill.
Too many customers perceive their cable provider as a commodity, completely replaceable by anyone calling with a discount, promotional offer or invitation. Just the fact that another company called and initiated dialogue could be reason enough to switch.
The keys to building a relationship with the customer are twofold: dialogue and education. The cable operator must be an active partner in the relationship. We must solicit and welcome feedback on our products and services and have a full understanding of each customer's needs, then act on that knowledge. Cable operators also must proactively communicate their advantages over any other service provider. Too many of us are guilty of assuming that customers understand our advantages.
INCREASE BARRIERS TO EXIT
It's time to erect some barriers to our customers' exit, so that they realize they will truly be losing something if they decide to go with the competitor.
Barriers to exit include superior (and local) customer service, exclusive programming, customer loyalty programs and "bundled" offers and perks. If we deliver on any of these, we plant the seed in our customers' minds now, before the competition comes calling.
Customers develop loyalty to brands, not to products or services. In order to build loyalty, we must build unique and relevant brand images that communicate to customers why we are different and what this means to them. We must create value that the competition cannot match. Value does not always mean lower price; value has more to do with added benefits.
Customers will pay more for convenience, superior service, and a credible reputation. If we do not have a unique brand image, we will be viewed as a commodity. If we are viewed as a commodity, we will lose customers. It is that simple.
What about cutting prices to encourage customer loyalty? By reducing price in the wake of competitive pressures, we fall back into the commodity trap. It may also suggest to customers that the service was priced too high all along.
A better way to increase the value is to raise the benefits. Value can be seen in loyalty campaigns, such as points-based programs (Adelphia Awards, AT&T Rewards, etc.) or by tie-ins and exclusive offers with local cable advertisers. Value also can be found in exclusive cable-only programming, quality local origination programming and enhanced customer service.
The best benefits to all are those that the competition cannot match. Can competitors bundle digital cable, data or telephone service? Can they offer the same variety of programming? Do they have the same economic/employment impact and relationships in the local community?
As the cable industry rebuilds its systems to offer more services, these are the benefits we can continue to emphasize. So as we race through 2001 and seek new customers, let's also keep an eye on our present customers. And as we continue to rebuild our systems, let's also implement strategies to build these lasting relationships that will help us to win the race.
John D. Cimperman is vice president of sales and marketing for Adelphia's Great Lakes Region. He also serves as executive vice president of marketing of the NHL's Buffalo Sabres.
