Telcos vow to localize more

Telecom service providers are vowing to localize their marketing and customer service more in an effort to combat cable companies that they say are already doing so.

“We’ve tended to have more centralized marketing,” Ed Mueller, Qwest’s chief executive officer, said at a UBS investors conference on Tuesday. “We’ve initiated and are in the process of [adapting] our marketing and execution to a regional focus. You’ll see us market then separately, market by market.”

That regional approach, Mueller said, is “one thing the cable competition has done better than us.”

But other telcos are aiming to follow suit if they haven’t already done so. At the same investor conference, R. Stewart Ewing, CenturyTel’s chief financial officer, vowed to bring a similarly varied geographic approach to much-larger Embarq after it acquires that company. “[Embarq] prices across the country, with one price in all markets,” Ewing said. “We are very targeted and strategic in how we price, market by market, based on competition.”

That approach is important in large part because CenturyTel (and Embarq) face wholly different competitors in different markets, Ewing said: In Wisconsin, it faces Charter Communications; in Washington state, it’s up against Comcast; and in Texas, it’s Time Warner Cable. And in some markets, there is no competition. In addition, cable companies are rolling out faster speeds in some markets, creating widely disparate competitive dynamics from one market to the next.

“Truth be told, all marketing is regional/local, or should be,” said John Celentano, president of Skyline Marketing. “AT&T and Verizon both adapt their pitch to local markets as well, even though they both spend a ton on national media advertising. And as they both increase penetration of their respective U-verse and FiOS deployments, they are stepping up advertising and sales in those key markets. For example, last year, Verizon was offering a free LCD television targeted at new customers in the Mid-Atlantic region who took FiOS; that garnered a lot of new FiOS subscribers in those markets, but that promotion was not offered everywhere.”

Another mid-tier telco, Frontier Communications, has also moved more locally in recent years. As the company integrated acquisitions over the years, it originally centralized many management functions in order to yield synergies. But more recently, Frontier began adding local managers again that were responsible for the revenue generated in their own local turf. “We want to make sure the decision-making is close to the customers,” said Donald Shassian, Frontier’s CFO, at the UBS event. Local managers are most familiar with what works and doesn’t in each market, he said, and are best able to engage the local community in the most effective way possible. Thus, it doesn’t make sense to force them to implement a single, national plan. One of the local managers Frontier put in place is a former member of his city’s chamber of commerce; another is a former disk jockey. “People who are well-known and grew up in the community leverage that. That’s how you make a difference,” he said.

While Frontier has consolidated its customer call centers, replacing 14 with just 3, it dedicates certain call-center resources to specific geographies, so that, for example, call center staff dedicated to Arizona -- wherever they’re physically located -- are familiar with the network and technicians there and any common problems or promotions. “Each [customer care] rep doesn’t have to know about promotions across 27 states,” Shassian said. “They can be more personalized.”