Time Warner Cable keys on promos to win customers back
After posting largely glowing numbers in its fourth-quarter earnings report, Time Warner Cable is not about to rest on its laurels this year.
In combination with the down economy and housing market, Time Warner Cable now goes head-to-head with AT&T's U-verse service in a quarter of its footprint, while Verizon's FiOS service is available in 12 percent, according to Time Warner Cable President and COO Rob Marcus.
Those numbers are only slightly higher than Verizon and AT&T's penetration numbers from the third quarter, but Marcus said that combined, they represented roughly 10.2 million homes passed in Time Warner Cable's turf.
While Time Warner Cable posted strong fourth-quarter numbers, Marcus noted that Verizon's marketing and promotional efforts were more aggressive in the fourth quarter, while DirecTV and AT&T's "were somewhat less."
"The operating environment remains tough, but we're actively managing the business to yield improved results in spite of external factors," Marcus said.
Going forward, Time Warner Cable is focused on three fronts: customer acquisition, upsell and retention, which Marcus said was known internally as "get, grow and keep."
"We're making good progress on all three fronts," he said. "We're driving customer acquisition and migration with more aggressive offers; better, more focused marketing and advertising; and improvements in our sales channels. Our efforts are paying off. In the fourth quarter, new connects were 3 percent higher than a year ago."
Time Warner Cable had two primary promotional offers in the fourth quarter. The first targeted DSL users with a Time Warner Cable data tier that cost $29.99 per month, while the second, which was introduced in mid-November, introduced an $89.99 triple-play package that included a year of free DVR service.
Overall, Time Warner Cable's fourth-quarter double- and triple-play bundle net additions improved both sequentially from the previous quarter and year-over-year.
"We have a lot of initiatives trained on customer acquisition and upsell," Marcus said. "It's too early to forecast Q1 sub performance, but I can tell you subscriber net adds in the first few weeks of 2012 are somewhat better than comparable weeks last year."
Last week, Time Warner Cable launched a new triple-play offer, as well as a "buy wideband, get phone for free for a year" promotion. Marcus said the new triple-play bundle included "an attractive premium channel promotion" that was designed to boost flagging premium upsells.
"We're hopeful we can re-energize this category," Marcus said.
Over the past two quarters, Time Warner Cable has realigned its customer service operations, which included staffing call centers with experts who have specialized training designed to cut down on the number of disconnects, as well as offer more aggressive retention offers than the company has done in the past.
Marcus said Time Warner Cable now has a two-hour window on service calls "almost everywhere" and has one-hour windows and weekend appointments in some markets. In an effort to improve its customer service image, Time Warner Cable is also experimenting with setting up specific times for service calls in several cities.
Like Comcast, Time Warner Cable is also working on customer self-installs to increase customer satisfaction and lower its cost via reduced truck rolls.
"The bottom line on customer service is we're making progress," Marcus said. "There's still much work to do, but we're making progress."
Around Thanksgiving, Marcus said Time Warner Cable offered its longest-tenured triple-play customers free voice, "not as a promotion, but as a thank you."
"Although it was a relatively small gesture, the impact on customer satisfaction metrics was remarkable," he said. "You're likely to see more from us in this area."