Smaller Cable Companies Find Success Playing Soft Cop With Huge Data Users
SAN FRANCISCO -- Smaller cable companies are succeeding with strategies to dissuade customers from using enormous amounts of data and to upsell to more expensive service tiers those determined to continue, executives said Wednesday. The approach requires heavy investments in planning and in technology or labor, they said, but it avoids the customer backlash and harmful publicity that some larger providers have bought themselves with data caps and service cutoffs. “Little Windjammer is able to come up with a creative solution and big Comcast can’t,” Kyle Johnson, the product-strategies director of IBBS, said after hearing sharply contrasting stories about the operators. IBBS provides technology-support to cable companies.
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Don’t take the approach that “you're going to beat ‘em up and charge, charge, charge,” said Belinda Graham, chief operating officer of Windjammer Communications. “Stick with the marketing, helpful, customer-friendly tone.” She and others spoke at the Independent Show put on by the American Cable Association and the National Cable Television Cooperative. Surcharges for exceeding caps end up being imposed on only “a dozen or less customers a month” of the company’s 23,000, Graham said.
Metrocast takes an even softer approach after having made investments to bring its bandwidth costs way down, said Josh Barstow, vice president of advanced services. “We charge a good price for our service, and we can’t complain that our customers use it according to our rules.” And when they don’t obey the rules, “we've had some very good success with some very heavy users moving to the business service at $100 a month,” he said.
Executives of small operators stressed the importance of informing customers about coming caps and sending warnings when the caps are close to being reached. Graham recommended giving subscriber education through billing statements and calls to heavy users an eight- to 10-month head start on enforcement. “The most painful step” for Windjammer was changing the subscriber agreement and the acceptable-use policy, “because that’s when the lawyers got involved,” Graham said.
Setting data caps is “the biggest question,” Johnson said. Overuse is concentrated in a tiny percentage of customers, but limiting overage charges to them can produce huge bills, he said. Spreading the cost reduces the sticker shock but hits less-gluttonous customers, Johnson said.