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TCI Renews Rewards Program In Major Retention Effort

AT&T Broadband & Internet Services is bringing its
"TCI Rewards" program, "probably our single largest retention effort,"
into its second year, senior vice president of marketing Doug Seserman said.

One of the MSO's only national marketing efforts, the
company invests heavily in TCI Rewards, but it gets a great return on that investment in
terms of customer loyalty, according to Seserman.

Since its launch in April 1998, about 3 million of AT&T
Broadband's 11.2 million customers have enrolled in TCI Rewards, which gives customers
points toward free cable-branded merchandise.

"We've seen a 16 percent reduction in disconnects, a
25 percent reduction in downgrades and a 17 percent increase in digital upgrades"
among video customers enrolled in the program, compared with the general subscriber base,
Seserman said.

"We've never seen any marketing activity that led to
such a direct reduction in churn," he added.

Every new digital customer is automatically enrolled in TCI
Rewards, and multipay households are encouraged to join through targeted direct mail.

In addition, 30-second cross-channel spots and the monthly TCI
newsletter advertise a toll-free number that any customer can call to join.

Seserman suggested that consumers respond positively to the
program because it rewards them for activities they're already doing, without asking them
to do something new.

And the rewards are goods that tie into customers' love of
television that they can't find anywhere else, such as specially designed Rugrats T-shirts
or Disney Channel watches.

In addition, there may be a welcome element of surprise in
the rewards program.

"We have such a history of taking customers for
granted in the cable industry," Seserman said.

TCI Rewards will be transitioned to the AT&T Broadband
brand once the TCI systems adopt the brand, although Seserman could not say how soon that
would be.

The MSO is also working with parent company AT&T Corp.
on how to integrate the cable-focused rewards program with those of the company's other
services. AT&T also has a rewards program for its long-distance telephone customers,
for example.

Seserman said he expects to see an integrated rewards
program in place by the beginning of next year, following tests in limited markets late
this year.

An integrated plan would give customers more incentives to
buy additional AT&T services, such as high-speed Internet access and wireless, local
and long-distance phone service.

The separate divisions need to address operational and
billing issues before such a program could be implemented, Seserman added.

TCI Rewards members have redeemed more than 50,000 gifts to
date -- mostly low-end children's merchandise, Seserman said.

He predicted that in the second year of the program, more
people would claim higher-end merchandise, such as adult-sized jackets from programmers,
as customers build up more points.