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Renewal in the Rust Belt

Fifteen months ago, Time Warner Cable’s Northeast Ohio division, centered in Akron, was not a poster child for growth. Though sales of digital services were trending upwards, the Ohio system lagged its corporate siblings in digital penetration, according to local executives.

But today, the system boasts a digital-penetration rate of 55%, a 17% gain during the period. The cause: “Operation Renewed Value,” a system-wide sales model adopting uniform bundled price points with all employees, not just sales associates, involved in selling. The Northeast Ohio division passes 685,278 homes.

Akron was one of the first Time Warner divisions to adopt uniform bundled pricing. Prior to the change, the operator charged $52 to $53 per month for digital cable; $45 for Road Runner high-speed Internet service and $45 for phone. The sales pitch was video-centric.

“We did a lot of short-term offers, but that was activity that clogged the phone lines and led to dissatisfaction when customers couldn’t get in,” said Greg DiPaolo, senior vice president of marketing and sales for the Midwest region.

Executives knew they had to do something different. Like most of Ohio’s service companies, the state’s general economic woes have negatively affected Time Warner’s Akron operation.

Ohio has relied heavily on the traditional manufacturing sector for jobs, but according to an Aug. 15 article in the Akron Beacon Journal, that sector has lost 217,000 jobs in the state since 1997, a 20% decline. Families are fleeing urban areas in search of jobs.

Direct-broadcast satellite TV providers also took a chunk out of the multichannel-video market, capturing 12% to 13% of the region’s subscribers, executives said.

Time Warner’s plan: Devise a sales strategy that would make any employee comfortable talking about pricing without the aid of a manual. The price point was changed to $39.95 per product. Employees were trained about the importance of generating growth for the company, and were taught that each product, not just video, has value.

“People really grasped that,” said Northeast Ohio division president Steve Fry. “We had to start selling within our four walls before we went selling outside.”

Regarding the uniform pricing, he jokingly added: “It’s simple. Even I can understand it.”

Management emphasized that customer satisfaction rises commensurate with the number of products in the home. And a one-product competitor is less likely to pick off a multiproduct home, officials added.

One of the best salesmen now is an engineer who used to have little contact with customers at all, Fry said. The engineer, Rick Hanson, has something akin to Tupperware parties at his home, selling products to friends and neighbors. All employees receive a commission on sales, executives noted.

Employees are encouraged to wear lapel pins or logo-wear in public. “That starts a conversation: If I can talk to you, I can sell you,” Fry said.

Besides the simplified pricing, executives said the launch of phone service propelled bundled sales.

“It’s the enabler. There’s great savings there,” Fry said. “We have a better mousetrap with video, high-speed data and phone.”