Posts tagged ‘EuroSummit’

Love and money

Is an appeal to emotion the key to keeping customers?

Love was in the air at the CTAM Europe EuroSummit in Malta last month.

UPC Broadband’s Doron Hacmon kicked off the event by exhorting cable operators that their key focus should be on making their customers fall in love with their service provider. By delivering on emotional touch-points such as “a feeling of home” or “making life simple” cable operators could win the affection and loyalty of their subscribers, rather than their grudging acceptance.

What price this love? Hacmon cited examples of products that could command a premium over substitutes that failed to deliver the same emotional connection: BMWs, he said, were more expensive than Audis, despite being essentially the same vehicle; Starbucks could charge a 50% premium on similar cups of milky coffee because their shops delivered a ‘feeling of home’ to customers. Apple Macs and iPhones could command double the price of functional, but unloved, Dell PCs and HTC phones and so on.

Cable, he suggested, could repeat the trick by appealing less to self-interested calculation (complex bundled offerings at a discounted price) and more to its ability to cater to customers’ emotional needs (staying at home, eco-consciousness, the desire to connect with others via the web and social media).

Other speakers tipped their hats to the love theme at various points throughout the event. Convergys’ Michelle Nowak said that cable operators needed to “look at their consumers as persons” and argued that “the better you serve your customer, the more they like you”. Industry veteran David Hulbert noted that cable operators had never been good at putting themselves in consumers’ shoes and observed that the key to success was to identify (and market to) to two or three things that were most important to those consumers.

So, as Tina Turner asked, what’s love got to do with it? In response to Hacmon’s presentation, those of a Gradgrind-ish persuasion might ask how this ‘love’ can be measured. They may, after musing further, come up with something along the lines of: “love can’t be measured, but churn can”.

If by ‘love’ we actually mean ‘marketing’ (in its totality), this might give a better sense of what cable operators need to do. This means, above all, attention to detail, responding to customers’ complaints swiftly, and delivering services flexibly in a way that meets the needs of those customers. However, cable operators know all this. It’s a version of a refrain (“We need to do more about customer care”) heard at every cable conference since time immemorial. There is nothing new in industry executives and observers noting cable’s less than perfect record in delivering customer care and its historical focus on technology and infrastructure rather than marketing.

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TV Everywhere is both cable’s “best defence” and threat

TV Everywhere is cable’s best defence against cord-cutting…

…but could accelerate the unravelling of the relationships that keep the industry going, according to Stuart Sikes, president of Parks Associates. Speaking on a panel session at the CTAM Europe EuroSummit, Sikes said that cable operators were not actively promoting TV Everywhere services to their subscribers. He cited the example of Swisscom, which had bundled TV everywhere with its top-tier offering. This, he said, did not address the danger of lower-tier customers churning.

Parks Associates research showed that about 10% of customers were looking to “cut the cord” in the immediate future, and that very few of these would be retained by the offer of TV Everywhere services. Awareness of such services remained low, Sikes said. However, consumers did see value in TV Everywhere and a significant proportion would be willing to pay for it, which presents both an opportunity and a threat to cable as consumers could turn elsewhere for such services, Sikes added.

While cable operators had good relationships with content providers, the issues involved in delivering services over multiple operating systems to multiple devices with multiple DRMs was challenging. Sikes said that revenue from TV Everywhere would not be significant enough to pay for infrastructure needed to support it. There was also a trend towards the replacement of high-value subscription services with relatively low-value over-the-top TV Everywhere services, he said.

“Pay TV operators may be in for a long period when their return on investment on these services will be negative,” said Sikes.

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Liberty Global outlines marketing plan for Horizon

Liberty Global will emphasise the different capabilities of its new Horizon box in different markets, according to Peter Dorr, managing director, strategic marketing, sales and customer care, Europe, Liberty Global.

The operator has created 10 categories of features, allowing marketers in each country in which the box is launched to pick a selection for their particular market, Dorr told attendees at the CTAM Europe EuroSummit yesterday. Liberty Global will use a set of phrases beginning with the word “Imagine” to convey the capabilities of the service to consumers. Phrases like “Imagine…you never have to miss a goal again” will form the basis of the campaign, which will also include the tagline “Everything you love is on TV”. Liberty Global has developed point-of-sale material for use in its stores in the Netherlands and will also run print and internet campaigns. The company will launch its full marketing campaign in the Netherlands in about a week.

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