Cable Direct Marketing

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TEAM 2An Analysis: Cable/Satellite Service

Mary-Nevin GauthierWhit Garland

April SheppardJessica Liu

Larry Lowe

+Agenda

Introduction

Industry Landscape Current Television Ownership

Porter’s Five Forces

Data Insights

Customer Segments

Strategy – Master Plan What tactics?

Competitive Landscape Differentiation

Experiment

Conclusion/ Q&A

+Introduction

Objective: Examine the customer database of a cable service provider to uncover insights and segment those insights into customer profiles to determine the best direct marketing strategy for the company going forward

Examine customer database

Find insights

Determine customer segments(target)

Plan a DM strategy to reach those segments

Test

Recommend

+Industry Landscape

Television has a strong “life” component in the US – despite the recession , 2010 saw the largest jump in TV’s per household since 2006

Facts from Nielsen:

55% of homes have 3 TV sets or more

28% have 2 sets

17% have 1

+Current Television Ownership

+Industry Landscape

Cable TV distribution in the U.S. is controlled by a short list of large cable system owners and satellite operators

that include:

Adelphia

Charter

Comcast

Cox Communications

DIRECTV

EchoStar Communications

Time Warner Cable

1.Comcast

2.Time

Warner

3.Cox

* by subscribers

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Cable Television NEEDS Direct Marketing

Both industry & consumer have evolved in past years

Technological advances along with wider programming choices serve as engines for growth

DVR’s are more common – advertisements can be skipped

Total ad spending is down 10%

Spending on Cable is up 16%

Video Streaming is becoming increasingly popular

+Porter’s 5 Forces Bargaining Power of the Customer: High

See notes in summary about the new power of the consumer

Bargaining Power of Suppliers: Low

Threat of Substitutes: High

Threat of New Competition: Medium Cable Providers vary from region to region based of a number of

outside circumstances, such as. Atlanta has 5 options while small towns often have just 1.

Intensity of Competitive Rivalry: High The Cable TV industry is extremely fragmented but this can be

addressed by securing high levels of differentiation, innovation and value the company offers

+Data Insights

Who bring in more revenue to the company? Living in single family house Earning higher household income Male Homeowner Married Computer owned/internet access Photography More number of rooms Younger customers

+Data Insights

Total revenue is around 50 million from 26,257 customers

99% of the company’s revenue comes from the total revenue from all the receivers

total rec total PPV Total HD total DVR$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$49,548,600

$62,721 $68,490 $278,080

Series1

99%

1%

+Data Insights

The highest 25% of the customers contributed 39% of total revenue

13%

21%

28%

39%

The Percentage of Total Revenue in Each Segment

1234

+Customer Segments/Target Market

We divided all customers into 4 segments by Quartile.

The critical points are Q1, Median, and Q3.

25%

25% 25%

25%

Q1 Q3Median


The upper 50% of all customers bring in 67% of the total revenue

Median

67%33%


Segment 1: total revenue is from $0 - $1210


Segment 3: total revenue is from $1811 – $2420


+Information about Segment 1

The total revenue from the segment 1 is 12.79%

The mean of the number of receivers is 3.19

Over 95% of customers do not have DVR & HD service

76.53% of customers are female

61.12% of customers are single

81.23% of customers’ education level are high school and some college

The mean of income is $34,158




55.83% of customers do not have DVR service

93.8% of customers do not have HD service








78.39% of customers have DVR service

Only 22.57% of customers have HD service








86.64% of customers have DVR service

79.84% of customers have HD service

53.85% of customers are male

50.87% of customers are married

23.48% of customers’ education level is completed college


+Strategy – Segment1 Customer acquisition – not going to acquire

Customer retention

Up-selling HD & DVR service

Target: male, living in a single family, having 6 rooms or less, high school or some college

DVR: homeowner, married

HD: homeowner, home business, or computer

Communication

Direct mail and email

+Strategy – Segment1

+Strategy – Segment 2

Customer acquisition – not going to acquire

Customer retention

Male customers:

Up-selling HD service

Target: homeowner, gourmet food, or computer

Cross-selling DVR service

Target: homeowner, upscale, or computer

Female customers: Incentive to keep current female renew contract and get 3 months of premium service free

Communication

Email, in-program message, incentive


Customer acquisition

Target new customers with similar customer profile, some college to college, male/female, near the age 42 who lives in a single family house that they own

Customer retention

Up-selling HD service:

Target: homeowner, upscale, married, or computer

Increasing the retention rate:

Free HD service for a year with 2 years contract

Partnership with local stores to provide HD service bundle

Communication

Direct mail, email, in-program message, Direct Response TV advertising, and telemarketing.


Customer acquisition

Target: male, married, education level in college, higher number of rooms in household

Customer retention

Cross-selling

New package bundle to customers who are about to renew contract

Free credit to use PPV service

Communication

Direct mail, email, in-program message, Direct Response TV advertising, telemarketing, and face to face marketing.

+Differentiation

Exclusive contracts with apartment complexes, condos, townhome communities as well as new build communities.

Partnership with retailers for HD service.

Offer PPV credit for the most profitable segment in the company

Tracking customers through the company’s website, digital magazine, and newsletters

Face to face marketing to partnership with local franchises such as TV network

+Field Experiment

Conduct a field experiment for segment 3 & 4 testing rather or not there is a difference in the response rates between direct-response TV marketing and direct mail.

Period: 6 months

2 Suburban Areas, one is testing group another is control group

Determination: Response rate from each Direct Marketing strategy.

Separate our sample segments into the following: Direct-response TV marketing Direct mail Both direct-response & direct mail Control—neither direct-response or direct mail

Cable Direct Marketing

Documents

Transcript of Cable Direct Marketing