And You Thought Subs Hated the Bill

Cable World,  July 15, 2002  

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Byline: ANTHONY CRUPI

If you're like us, the monthly billing cycle is something to be approached with equal measures of fear and loathing. The mortgage payment hits the mailbox along with the car payment; four separate credit card bills are due on four separate dates; that infernal student loan check has to be mailed to the black-hearted zombies at Sallie Mae somewhere in between.

And then there's the cable bill.

Though the least essential bill on the stack, the monthly Time Warner Cable statement that arrives at Rob Shavers's Brooklyn apartment gets treated with the kind of brisk efficiency rarely seen outside of a German synchronized swim revue. The day Shavers's bill appears, he tears the envelope open, scribbles a check and has it in a mailbox in minutes. "You don't want to sleep on [forget] the cable bill," Shavers says. "They shut off your cable and then where are you? Lost, that's where."

This from a man whose studio is literally festooned with unpaid bills bearing an ominous red "overdue" legend on the envelope.

Those of us whose priorities aren't wholly out of whack may have a less cozy relationship with the monthly cable statement, especially if the account in question includes two or more services. Cox New England, which offers bundled services (video/high-speed data/telephony), foresaw the potential paperwork nightmare its multitier customers faced and was one of the first systems to switch to a single billing platform. According to SVP of marketing Doreen Studley, the move has reaped unexpected rewards. "When we migrated our software iterations so that everything would appear on one bill, we began to notice a change in customer spending habits," Studley says. "One in five customers began to order other services."

This should come as no surprise to anyone versed in direct marketing techniques. When the paying process is simplified, consumers often won't object to paying a little more for an additional feature or two. Mark Cameron, Cox New England's director of product management, refers to this as "the power of the bundle."

"Not a piece of mail goes out without a message about bundled services," Cameron says. "On top of that we are gathering information on customers to gauge their desire for tiered services, and as a further draw we offer a $10 discount per additional bundled service." Cox New England also allows customers to select when the monthly bill arrives. "If it's more convenient to pay at the end of each month, we can arrange that," Cameron says. "It's all up to the customer."

Other systems have looked to predictive analysis to keep customers from straying from the fold. By examining a consumer's billing record, purchasing history and service requests, a savvy MSO can determine whether or not a subscriber may be a flight risk. Meri Christenson, the product manager for CSG Systems' ProfitNow antichurn software, says Time Warner's Desert Cities system in Palm Springs, Calif., has retained 83% of customers identified as potential fugitives, following the implementation of ProfitNow.

What's more, ProfitNow also includes a module that identifies upsell opportunities, which in turn improves profitability. "About 95 percent of the customers we've been able to identify as likely buyers of additional services have accepted these kinds of offers," Christenson says. "That works out to an increase in the average annual revenue from each of these subscribers by just under $300."

Generally, those who opt for additional bells and whistles tend to stick around longer than no-frills types. "We have seen a 50% reduction in churn when customers bump up to another tier," Studley says. "As operational efficiency gets better and the services become more alluring, it stands to reason that our customers are more satisfied."

And simplicity works both ways. Last week N2 Broadband announced the integration of its MediaPoint BMS (Business Management System) with every major U.S. cable billing system, including CSG, Convergys, and DST Innovis. Darryl DeFreese, N2's principal architect, explains that open standards are the key to retaining cable customers. "If you can't communicate freely between the various billing systems out there, it's like having to rewrite the code for Microsoft Word every time you switch platforms," DeFreese says. "With integration, customer transactions can be effected in less than a second."

As for Shavers, may he heed the advice of our friendly neighborhood Time Warner customer service representative: "It's great he pays his bills so quick. Better hope he pays his electricity bills just as fast."

COPYRIGHT 2002 Access Intelligence, LLC
COPYRIGHT 2008 Gale, Cengage Learning