Sell! Sell! Sell!—Direct Mail Marketing Just Got a Little More Direct

By Mavis Scanlon

Brian Cecere likes to know exactly who's on the receiving end of his marketing messages. What marketer wouldn't? Yet operators too often rely on the blind, one-market, one-message strategy to sell services.

Cecere, VP of marketing at Time Warner Cable's 111,000-subscriber system in Lincoln, Neb., and a believer in the power of database marketing, says he can "slice and dice" the information in his database in the way that's most helpful to his marketing efforts. "I want to talk directly to the people," he says. "I don't have to write a letter to IT" to get information about subscribers, he adds, and then wait two weeks for a response.

For years cable operators have used the "spray and pray" method of marketing--one direct mail piece is sent to an entire subscriber base in the hope that the message sticks. As new services--and competition--have proliferated, operators have learned that this one-size-fits-all method isn't always the best solution. Similarly, blanketing a market with one message on cable TV is not all that efficient either. Those consumers are already customers--in effect operators are preaching to the choir, and are not reaching the 40% of the population who are non-cable subscribers.

In a late August report titled "Cable Marketing Myopia, Marketing to Yourself," Bernstein Research analyst Craig Moffett noted that the cost of what he calls cable's "marketing myopia"--operators marketing mostly to their own subscriber bases--has been higher basic video subscriber losses as well as far lower high-speed data penetration (3.5%) among non-video subs compared with HSD penetration of 31% among video subs.

"Although cable operators have done a superb job selling bigger and bigger service bundles to the customers they already have, they have done a lousy job marketing to the other 40% of the world," Moffett writes.

Efficient database marketing can help operators zero in on people who don't subscribe to cable."With direct mail, your whole job as an operator or an ad agency is to make it interesting enough to make [the recipient] open it in between taking it out of the mailbox and throwing it in the garbage," says Warren Zeller, VP of account services at Cohorts, a database marketing firm.

Zeller says, for instance, that not all households may want to buy a bundle. An operator can tailor specific messages to, say, customers who index well for high-speed Internet service, such as high-income families with children, young single professional males and females or working or career-oriented couples (just to name a few of the 30-plus market segments Cohorts uses).

As Moffett points out, there are signs that cable is changing its attitudes--for example, both Cox and Charter have dropped the rate "penalty" that non-subscribers had to pay to get high-speed Internet service.

Originally, Cecere was skeptical that Cohorts could make a difference, so he designed a test: He asked Cohorts for demographic information based on the addresses of 35 Time Warner Cable employees. Cohorts provided accurate demographic information for 75% of the addresses.

For its first direct mail campaign utilizing Cohort's segmented marketed strategies, the Lincoln system mailed different pieces to seven segments which Cohorts named, for instance, Alex and Judith, for affluent empty-nesters; Stan and Carol, for upscale middle-aged couples; Barry and Kathleen, for affluent professional couples; and Megan, for female, budget-conscious students. The campaign, which Cecere deems a success, scored a 2.6% response rate, although some segments got a 3% response and one ran as high as 4.5%. He is now working on another campaign for multiple services that will be divided into 17 segments.

"This is a tool that allows me to reveal who the customer is," Cecere says. Each piece had different verbiage and different graphics--something that in previous years would have been a marketing and finance nightmare, due to the cost and tracking of several separate pieces. "If you do generic, you end up generic," he notes. "My marketing department knows more about subs and non-subs than they ever did before."