In today’s cable industry, customers are far different today than those in the days of the truck chasers, the ones who ran after installers’ trucks in hope of getting their HBO or MTV. Now customers face a multitude of choices for media,
entertainment, and telecommunications. They’re not chasing down cable
trucks—they’re pursuing value, price, quality, and service.
As cable expands its product offerings to increase revenues
per customer, it must present customers with more choices, based upon services
that appeal to their individual preferences. Additionally cable operators must
maintain or grow their base of customers by winning the “war on churn.” Losing
subscribers to satellite costs the cable industry more than $1 billion a year
in lost revenue potential. Additionally, it is currently estimated that about
one half of digital cable subscribers will churn in a given 12-month timeframe.
The cost to replace a lost customer is estimated at $400, according to industry
analysis and this cost is in addition to the loss of revenue.
Cable marketers need to gain insight into their customer
relationships in order to successfully acquire, retain, and serve diverse
subscriber segments for each product—whether it is traditional cable, digital
cable, high-speed Internet, video-on-demand, personal video recording,
interactive TV, home networking, telephony, or another service. By properly
capturing and utilizing their customer insights, cable marketers can both
leverage the large scale of today’s cable systems and cost-effectively provide
local, personalized marketing and service.
Customer insight does not require vast expenditures on new
software solutions or armies of new hires. It starts with a philosophy of
understanding your relationship to your customer and building upon it. It
requires having the processes and systems in place to learn more about
customers—in terms of demographics, buying patterns, income levels, call-in
history and preferences—and then tailoring the services, offers, and
interactions that will appeal to the needs of each customer. In fact, it
requires operationalizing customer insight at the moment of truth—the point of
interaction with the customer.
Companies can gain customer insight by capturing pertinent
information at every customer touch point. Understanding that a customer has
called in the past and requested specific services, or has responded to a piece
of direct mail, or has encountered specific troubles is all important
information that can be used to improve the effectiveness of future customer
interactions.
For example, when armed with customer insight information, a
cable system rep can say to a subscriber: “I see that you have ordered four or
more VOD movies in two out of the last three months. Do you know that we have a
VOD package that includes five VOD movies per month with an additional discount
beyond the fifth movie?”
To visualize how customer insight can be used, think of a
cable operation as being like a brain. The left brain is the analytical side
that gathers and assesses customer preferences, interaction history, and
profiles. The right brain—the creative side—uses that information to determine
how to treat customers and market to them. The two sides need to work together
in order to best satisfy customer needs. Both sides of the brain are essential
while interacting with customers to enable effective and efficient
communication.
Accenture has developed an Insight Driven Interaction
Business Model that cable operators can leverage for capturing and utilizing
customer insights. Customer profile models are created based upon demographic
and interaction information. These models are used as the basis of
understanding individual customers. They are the “left half of the brain.”
Workbenches and toolkits enable “rules” to be created
defining services, offers, and treatment methods for customers within each of
the profile models. These workbenches allow the business to be creative in
using the understanding of customers, and hence, make up the “right half of the
brain.” Finally, the model contains an engine that uses the knowledge in “both
halves of the brain” to determine the optimal method for interacting with
customers across multiple channels. Customer interaction data is then collected
and used to refine the profiles and rules. This approach ensures that customer
insight is effectively linked with how a cable operator interacts with their
customers.
Cable offers the best broadband products on the market
today. But if cable operators are going to reduce digital churn, fend off
satellite providers, meet customer demands for high-speed Internet and
telephony, and grow video-on-demand and other new services, they must leverage
their best understanding of each customer. It all begins by knowing your
customer better and better using that knowledge.
About the Authors: Timothy Hanson and
David Pramer are partners within Accenture’s North America Communications &
High Tech practice. For more information,
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