Cover Story: The Customer’s Keepers

Paul Belle Isle, senior directior of loyalty and retention (left); Phil Bellaria, vice president or customer loyalty (middle); and Tim Doolittle, vice president of marketing science (right)

Charter hands out these buckslips (shown front here) during service visits, community events and at its service centers to encourage customers to join its "Live It" loyalty and retention program.

Charter hands out these buckslips (shown back here) during service visits, community events and at its service centers to encourage customers to join its "Live It" loyalty and retention program.

In Charter's "Double Trouble" program, customers who have made two service calls in 60 days—with at least one of the calls requiring a visit—receive a Hallmark apology card following the repair work.

With a ramped-up loyalty and retention program, Charter Communications is having positive, measureable churn reduction results

However, Charter tends to see involuntary churn closer to the 25 percent mark because the company thoroughly vets its subscribers and takes fewer risks than other cable providers, Schmitt says.

Customers composing the rest of the churn pie contend with competitive offers, need pressing service issues resolved, or are considering disconnecting or downgrading service because of the volatile economy.

“For any subscription services firm, and cable would be that business model, churn is always, always an issue,” Doolittle says. “So while the economy might be impacting the rate of churn, our tactics are generally fairly robust, just because of the nature of the business. We have 12 million subscribers in the footprint, and about half of those are customers. And in any given month, they are choosing whether or not they’re going to continue their service with us.”

Charter seems to be holding its own, according to industry judges. In August, JPMorgan analysts characterized Charter’s subscriber “loss stabilization,” or churn reduction, as a bright spot in the company’s second-quarter performance.

How Charter is doing compared to other cable providers is difficult to independently measure. The industry’s overall churn rate is a closely guarded secret—even the Cable and Telecommunications Association for Marketing won’t disclose it. Therefore, Charter declined to reveal its churn rate.

Keeping Customers 101
Every customer is subject to leaving on any given day, says Phil Bellaria, Charter’s vice president of customer loyalty.

So, Bellaria says, the company approaches retention on three levels:

  • through improving end-to-end customer service, such as increasing network reliability and customer relations (i.e., allowing call-center agents to route customers with service issues through the “same-day service” queue);
  • by marketing methods, including launching “Live It” nationwide in July and continuing trigger-based retention programs;
  • via enhancing brand perception, through the media (i.e., commercials on Charter’s cable stations) and speaking to customers regarding Charter’s value to them and differentiation from other brands.

“My favorite retention success stories are just the stories I hear from different agents about how they were able to resolve [a] customer’s issues and the customer wrote back and said, ‘Thank you so much,'” Bellaria says.

Heather Fletcher is senior content editor with Target Marketing.

Related Content