Cox Communications Inc. is betting that repeat personalcontact with its best customers will trim churn.
And recent field trials of the "Cox VIP" program,which targets the highest-spending 20 percent of new customers, seem to bear that out.
In 90 days of field tests in nine systems, Cox saw a 45percent reduction in churn among subscribers targeted with the customer-loyalty program,compared with a control group, Cox director of direct-response and database marketingMargaret Ross said.
She called the VIP program "a collection of positivetouches and serendipitous benefits. It's true one-to-one marketing."
Like any new one-to-one marketing effort, the Cox VIPprogram has start-up costs related to creating a database. But Ross said retainingcustomers is worth the effort, especially considering that it costs six times more toacquire a customer than to keep one.
Ross worked on airline frequent-flyer programs beforecoming to Cox, and she said she learned to listen to customers and realized that differentgroups had different needs.
In the first 90 days, Cox VIP customers get three"personal touches" -- a welcome letter, a follow-up phone call and anotherletter containing a personalized offer or discount.
The welcome letter, Ross said, details every service thecustomer recently purchased and reinforces why those purchases were good investments. Theletter also alerts the customer that a Cox representative will call soon to see how thecustomer likes the service.
Of those customers who agree to start the call, 95 percentstay on the phone long enough to finish the interview, Ross said. During the call, Coxextracts facts and statistics about its customer base, then moves on to see what kind ofprogramming interests them and their families.
The call also serves to check on any unresolved problems.The customer can be connected to a service representative on the spot if necessary.
Two weeks later, the customer gets a letter of thanks fortaking the time to talk to Cox. The letter also includes two benefits: a discount on a newservice, plus a move-transfer benefit, or installation discounts for customers who move tonew Cox territories.
New VIP customers get three more positive touches by theend of the year, Ross said. Within two weeks, VIP members get surprise postcards offeringdiscounts on travel-related products, such as luggage and hotel rooms. The postcards alsodirect them to the Cox Web site, and then to Travel Channel's site, with moretravel-related goodies.
Also, VIP customers get invited to local events sponsoredby their systems. And they get special values on new services that they expressed interestin and notices about "What's on TV," also tailored to them.
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