Monday, January 28, 2013

Reconnecting With Time Warner Cable

If you live by the deal, it's likely that you will die by the same fate.  I think that's true of every industry; however, it's difficult to find an industry more addicted to the deal than television providers. 

Time Warner Cable is the second largest cable company in the country, although its television business is losing customers at an alarming rate.  In the third quarter of 2012, it surprised analysts when it lost 140,000 customers.  In the same quarter of 2011, it lost 129,000 subscribers.

As a result, Time Warner Cable recently launched a $50 million advertising campaign to reconnect with the subscribers that it lost.  The campaign is centered on Time Warner Cable's "Better Guarantee," which fits nicely into its overall "Enjoy Better" campaign.  This appeal to former subscribers acknowledges that while its service may have faltered in the past, it has made significant improvements to services like smartphone apps, on-demand programming and the length of service call windows.  Time Warner Cable is stamping their "Better Guarantee" pitch with, what else, a 30-day money back guarantee to any born-again subscriber that isn't satisfied with the improved service.

Cable companies are in real jam.  The primary problem is that they live by the deal.  Customers sign up at low introductory rates but are gradually punished for their loyalty until they get fed up and decide to take-the-bait of the next guy's introductory offer.

What if Time Warner Cable had allocated a portion of that $50 million toward client retention rather than client re-acquisition?  They could transform their marketing plan so that customer service didn't begin with a customer problem

Time Warner could contact loyal customers to offer enhanced recording capabilities when they re-up beyond the introductory offer.  And with its intimate knowledge of our show preferences, Time Warner could add and delete programming (or offer sampling) based on known customer preferences.  They could even react to very nuanced consumer behavior too.  For instance, when a customer watches a couple episodes of a new show, Time Warner could offer them the earlier episodes on-demand.  Furthermore, they could make a point of adding customers' favorite shows to their on-demand panels in anticipation of the season premieres.  Or Time Warner could launch a social marketing program by allowing customers to recommend shows to their friends with Time Warner chipping in by sharing the old episodes of that series they missed on-demand for a month or so. 

Yet, as it stands now, most customers are only in contact with Time Warner Cable when something goes awry or when it's time for them to collect the money.  They need to show customers how they're truly "enjoying better."      

Time Warner certainly has more immediate marketing problems; however, its secondary problem may be more troublesome.  Cable operators may start to consider the erosion of the category itself.  It may sound like a wild prediction, but I believe the day when television channels no longer exist is getting ever closer.    

Less than a after this was published, Time Warner breaks this unfortunate news to its Los Angeles area customers.  Make sense?  

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