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Love and money

Is an appeal to emotion the key to keeping customers? Stuart Thomson weighs the arguments at the annual CTAM Europe EuroSummit.

Love was in the air at the CTAM Europe EuroSummit in Malta last month.

UPC Broadband’s Doron Hacmon kicked off the event by exhorting cable operators that their key focus should be on making their customers fall in love with their service provider. By delivering on emotional touch-points such as “a feeling of home” or “making life simple” cable operators could win the affection and loyalty of their subscribers, rather than their grudging acceptance.

What price this love? Hacmon cited examples of products that could command a premium over substitutes that failed to deliver the same emotional connection: BMWs, he said, were more expensive than Audis, despite being essentially the same vehicle; Starbucks could charge a 50% premium on similar cups of milky coffee because their shops delivered a ‘feeling of home’ to customers. Apple Macs and iPhones could command double the price of functional, but unloved, Dell PCs and HTC phones and so on.

Cable, he suggested, could repeat the trick by appealing less to self-interested calculation (complex bundled offerings at a discounted price) and more to its ability to cater to customers’ emotional needs (staying at home, eco-consciousness, the desire to connect with others via the web and social media).

Other speakers tipped their hats to the love theme at various points throughout the event. Convergys’ Michelle Nowak said that cable operators needed to “look at their consumers as persons” and argued that “the better you serve your customer, the more they like you”. Industry veteran David Hulbert noted that cable operators had never been good at putting themselves in consumers’ shoes and observed that the key to success was to identify (and market to) to two or three things that were most important to those consumers.

So, as Tina Turner asked, what’s love got to do with it? In response to Hacmon’s presentation, those of a Gradgrind-ish persuasion might ask how this ‘love’ can be measured. They may, after musing further, come up with something along the lines of: “love can’t be measured, but churn can”.

If by ‘love’ we actually mean ‘marketing’ (in its totality), this might give a better sense of what cable operators need to do. This means, above all, attention to detail, responding to customers’ complaints swiftly, and delivering services flexibly in a way that meets the needs of those customers. However, cable operators know all this. It’s a version of a refrain (“We need to do more about customer care”) heard at every cable conference since time immemorial. There is nothing new in industry executives and observers noting cable’s less than perfect record in delivering customer care and its historical focus on technology and infrastructure rather than marketing.

The fact is that organisations can take a very long time to turn around. It’s no doubt more straightforward (if not actually easy) to design a beautiful, functional piece of consumer hardware that people will fall in ‘love’ with – whether it’s an iPad or a BMW – than to build a service-based business that delivers to customers smoothly and perfectly, day in, day out.

Hacmon’s admonition to operators to take a lesson in love nevertheless speaks to the shortening window of time that operators have to smarten up their act. To stretch the metaphor a bit further, relationships are harder work than they used to be, in the days when consumers were more or less wedded to one TV provider till death did they part. They’re increasingly fickle these days, with a wandering eye for every flashy over-the-top newcomer on the video distribution scene, and more demanding, with an insistence on getting more back, maybe by asking for all content to be made available on those beloved iPads as well as on HD flatscreens TVs. If the cable operator’s ideal relationship with its customer is a monogamous one, operators are going to have to work a lot harder to earn and keep that love.