Triple-play offers need to chase movers

As people changing their residence become a bigger percentage of the available market for triple play services, telecom service providers will have to get more creative in how they identify and target this set of customers, according to Rory Altman, founder and director of Altman, Vilandrie & Co., telecom industry consultants. Unlike some other industry experts, however, Altman doesn’t believe over-the-top video will eclipse paid video service from telcos and cable companies.

In a presentation at the Citigroup's 19th Annual EMT Conference about growth/opportunity in the communications market last week, Altman advised service providers to consider ways to determine their customers are moving before the move takes place and market a package to that customer in advance. Movers are a more important part of the growth market, he said, because most of the consumers who want triple-play packages have purchased them, and getting consumers to switch once they’ve bought a triple play is much harder.

“We are approaching the end of this very turbulent phase of competition, where companies are selling what we call the ‘completer’ packages – I have one or two services with a cable company and a telco, and I move all my business to one or the other,” Altman said in an interview this week. “If you look at where service providers are getting their customers today, there are the triple-play completers, there is always a bit of switching activity, and there are movers. It is harder and harder to switch customers once you have more triple-play customers, because it is such a hassle for consumers. But movers are a consistent flow. With fewer prospects, fewer gross adds, movers become really important because that’s the biggest opportunity to grab a new customer.”

The best way to intelligently market to movers is to know when they are moving and act quickly to retain existing customers and poach new ones, Altman said.

“Service providers have to develop really effective ways of knowing when you are moving before you call them,” he said. “If I am talking to a realtor about signing a new lease or buying a house, the cable or telco needs to know that. If I am buying boxes from U-Haul, the service provider needs to know. They can pay people to get that information – pay realtors, pay U-Haul – a few dollars here and there for the potential to access a customer’s decision in advance. If it’s my customer, I need to know to save them. If it’s not my customer, I need to remind them how much they despise their current service provider.”

That doesn’t mean any let-up on customer retention, Altman added. “Absolutely service providers have to be focused on retention – it is becoming more and more important,” he said. “They need to still be working on creating a variety of offers. They should be using those lower price retention offers a little more aggressively now to try to keep customers.”

Altman expects a small amount of paid TV service erosion due to Internet-based video offerings but doesn’t believe consumers will abandon paid TV services to watch more video on their PCs. He does see a race between the consumer electronics and service providers on how to bring long-tail content to the TV screen.