Cable operators eye customer service to stop subscriber losses

Customer serviceOnly an ostrich would deny that cable is losing customers faster than the Washington Redskins are losing football games.

"We don't have our heads in the sand," said Comcast Cable President Neil Smit, speaking during a luncheon Q&A at the 38th Annual UBS Global Media and Communications Conference. "We can and will compete (with over-the-top providers alleged to be stealing cable customers) if need be."

The thing is, cable execs genuinely believe that OTT temptation is not drawing away subscribers. Satellite and telcos are getting their share and some subs are even going back to antennas, but there are very few leaving for over-the-top apps.

"Online video we view as complementary ... a convenient way for customers to get information, to get their content," he said.

While Smit insisted that Comcast (Nasdaq: CMCSA) has "seen no evidence of over-the-top" competitive losses, he did note that the MSO is putting a lot of time and effort into its offering because "we're not ignoring that possibility."

The Internet, it seems, can be cable's friend rather than its competitor because cable's "speed superiority continues to be a distinct advantage ... (to) generate non-video relationships," Charter (Nasdaq: CHTR) President-CEO Mike Lovett said at the same conference. "We look at the 12 million homes we pass with our network and quite frankly we don't have to lead with a video product any longer."

Cable customer serviceWhat cable needs to lead with--and now executives appear to be paying more than lip service to the idea--is better customer service.

"A lot of the talk that's going on in the industry regarding subscriber attrition is related to how we continue to improve the customer experience and how we continue to make the customer experience something that helps us earn our right to be the provider of services as there continue to be more and more options," said Tom Erskine, director of industry solutions for communications and media at Pegasus Systems.

Pegasus has been around for 25 years helping service providers understand customers and sell more services. It lists Time Warner Cable (NYSE: TWC-WI) and Cox Communications among its U.S. customers and, Erskine said, "we've hit on a way that allows the business leaders, the Tier 1 communications service providers, to develop dynamic business applications leveraging technology and use those applications to more quickly deliver a better customer experience."

Cable has, for years, talked about the customer experience ... and then done nothing or very little to the point where cable customer service is the punch line for jokes. Indicators now are that this attitude has changed at the top and the word is filtering down through the ranks.

"We're redoubling our focus on the customer experience to further improve our competitive position," Time Warner Cable CEO Glenn Britt said during a third quarter earnings call.

Among Time Warner's initiatives are an entry level video service designed to keep budget-conscious subscribers in the fold.

"We've heard loud and clear that customers would like more flexibility in video packaging, particularly in availability of smaller packages," Britt said, noting that these packages will be aimed at "a segment of our economy and our population that is under economic duress."

Comcast, likewise, is looking to chop down on its video offerings with a digital economy product that offers 50 standard definition and 25 high definition video channels for $29.99 a month as part of a bundle and $39.99 as a standalone.

"We're not promoting it aggressively, however we will sell it to the right customer as a save offer," Smit said.

Charter is less enthused about the idea.

"The industry has done this in the past and when the economy comes back you tend to see things go back to the way they were," said Lovett. "I'm a little hesitant."

Where no operator hesitates is in emphasizing a better customer experience. This might go hand-in-hand with flexible pricing and high-speed broadband, but it's the dominant hand right now and employees are being given that message.

"The reason that this is relevant is because not only is it about retention but in a lot of cases it's also about upsell and cross-sell," said Erskine. "At the core of what we do, we give the service provider the opportunity to analyze the customer information that they have and then make better decisions about how to treat that customer."

Treat 'em well, Smit advises his workers.

"Customer experience (is) an area where we've under-invested. We can capture more mindshare of our employees in it. No one wants to have a customer experience where someone shows up and it's not done right," he said.

That's because not doing it right hurts the bottom line in more ways than having an unhappy and potentially drifting customer, said Lovett. Repeatedly dealing with customer complaints is a non-reverence generating activity and "We look ... how we take that out of the business."

Perceptions of the cable industry as aloof and tough to deal with won't disappear overnight-and won't go away nearly as quickly as those hundreds of thousands of basic cable subscribers have. Things are improving, though glacially, Lovett said.

"I'm not pleased about where we're at today," he said. Even with marked improvements in customer satisfaction surveys, Charter is at or near the bottom among those offering opinions.

"It takes time to change consumer perception but I think we have the opportunity because we have superior products in the bundle; we have superior products in the Internet and we're now putting marketing muscle behind brand perception. I think there's significant opportunity for us to make improvements over the next several years," he concluded.

Smit agreed that there's room for improvement and that, more than anything, may staunch the subscriber leaks.

"It boils down to a few areas: one is get it right the first time," Smit said. "Let's make the install process work better; let's make sure there are fewer repeats; let's make sure if we're on the phone with a customer that we get it right the first time. It's not just about the call centers or dispatch or the tech visit or network reliability; it's about all those put together and let's make sure we don't drop the ball as we go along."

Perhaps this time, faced with subscribers drawn as if magnetized to competitors and other outside influences, cable will really pay attention to its core customer experience.