Customer retention is vital, and one service offers distinct challenges — video.
The cost is low for a video customer to switch to a new provider, the competition offers compelling teaser rates, and promotions such as free video weekends are popular but insufficient for consistent lock-in.
“The profit margin is so slim; we haven’t found anything to entice those customers to not switch,” says LaCosta Fields, sales and service coordinator at Scott County Telephone Cooperative in Gate City, Virginia.
She says customer service representatives have authority to make special offers to try to keep a customer from considering a switch. “But by the time they call our CSRs, they have already changed providers,” she says. “We haven’t found anything to get ahead of the disconnects.”
It’s a common problem in the industry, and companies search for creative ways to keep customers interested and loyal to video services.
Occasionally offering free movie weekends, such as HBO or Cinemax, is one strategy to build customer loyalty, says Shannon Hamilton, customer service manager at Ben Lomand Connect in McMinnville.
When a customer tries to terminate service, there are bundles designed to keep them and that offer upgrades such as free movie channels for one month, Hamilton says. But if a customer comes in ready to return their equipment, it is usually too late, she adds.
Similarly, Fields says that when they can reach the customer before they switch to a new provider, they use offers of free premium channels for 30 to 60 days and free HD or DVR services.
When video and telephone customers explore dropping services, internet access can keep them loyal. ”When our co-op members call in to disconnect their dial tone, they change their minds when they find out they cannot keep internet only,” Hamilton says.
Customers also like the promotions such as free movie weekend, but a customer may jump ship once the offer expires, Fields says. The competition, however, also faces similar challenges.
“We have the video provider jumpers — once the promo with Dish or Direct expires and they have to start paying the current price of their package, they come back,” she says. “We watch those customers closely to make sure they do not abuse the offers, and we are not likely to offer anything to the customers who are repeat non-pays again. We charge them to come back out and rewire.”
For DTC Communications in Alexandria, Tennessee, customer retention plans are receiving a greater emphasis. “We have a lot of competition in our service areas but our local channel, DTC3, sets us apart from the competition,” says DTC Sales and Marketing Manager Jannie Mulaski. “We are researching additional options to increase customer retention. They are going to become very important in the future.”