Cable Direct Marketing
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Cable Direct Marketing

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An analysis of data and formulating a direct marketing strategy for a cable provider.

An analysis of data and formulating a direct marketing strategy for a cable provider.

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  • The industry is heavily consolidated with the largest 11 operators collectively serving more than 80 million subscribers, which is about 85 percent of the total subscriber base.
  • All in all, the industry has and will continue to operate on a new playing field and direct marketing is essential to meet the new and growing needs of both the networks and the consumer.

Cable Direct Marketing Cable Direct Marketing Presentation Transcript

  • + TEAM 2 An Analysis: Cable/Satellite Service Mary-Nevin Gauthier Whit Garland April Sheppard Jessica Liu Larry Lowe
  • + Agenda  Introduction  Industry Landscape  Current Television Ownership  Porter’s Five Forces  Data Insights  Customer Segments  Strategy – Master Plan  What tactics?  Competitive Landscape  Differentiation  Experiment  Conclusion/ Q&A
  • + Introduction Objective: Examine the customer database of a cable service provider to uncover insights and segment those insights into customer profiles to determine the best direct marketing strategy for the company going forward  Examine customer database  Find insights  Determine customer segments(target)  Plan a DM strategy to reach those segments  Test  Recommend
  • + Industry Landscape  Television has a strong ―life‖ component in the US – despite the recession , 2010 saw the largest jump in TV’s per household since 2006  Facts from Nielsen:  55% of homes have 3 TV sets or more  28% have 2 sets  17% have 1
  • + Current Television Ownership
  • + Industry Landscape Cable TV distribution in the U.S. is controlled by a short list of large cable system owners and satellite operators that include: Adelphia Charter 1. 2. Comcast Comcast Time Warner Cox Communications DIRECTV 3. * by subscribers Cox EchoStar Communications Time Warner Cable
  • Video Streaming is becoming+ increasingly popular Both industry & consumer Total ad spending is down have evolved in past years 10% Cable Television NEEDS Direct Marketing Spending on Cable is up 16% Technological advances along with wider programming choices serve as engines for growth DVR’s are more common – advertisements can be skipped
  • + Porter’s 5 Forces  Bargaining Power of the Customer: High  See notes in summary about the new power of the consumer  Bargaining Power of Suppliers: Low  Threat of Substitutes: High  Threat of New Competition: Medium  Cable Providers vary from region to region based of a number of outside circumstances, such as. Atlanta has 5 options while small towns often have just 1.  Intensity of Competitive Rivalry: High  The Cable TV industry is extremely fragmented but this can be addressed by securing high levels of differentiation, innovation and value the company offers
  • + Data Insights  Who bring in more revenue to the company?  Living in single family house  Earning higher household income  Male  Homeowner  Married  Computer owned/internet access  Photography  More number of rooms  Younger customers
  • + Data Insights  Total revenue is around 50 million from 26,257 customers  99% of the company’s revenue comes from the total revenue from all the receivers $60,000,000 $49,548,600 $50,000,000 $40,000,000 99% $30,000,000 $20,000,000 1% $10,000,000 $62,721 $68,490 $278,080 $0 total rec total PPV Total HD total DVR Series1
  • + Data Insights  The highest 25% of the customers contributed 39% of total revenue The Percentage of Total Revenue in Each Segment 13% 1 39% 2 20% 3 4 28%
  • + Customer Segments/ Target Market  We divided all customers into 4 segments by Quartile.  The critical points are Q1, Median, and Q3. Q1 Median Q3 25% 25% 25% 25%
  • + Customer Segments/ Target Market  The upper 50% of all customers bring in 67% of the total revenue Median 33% 67%
  • + Customer Segments/ Target Market Segment 1: total revenue is from $0 - $1210 Segment 2: total revenue is from $1211 - $1800 Segment 3: total revenue is from $1811 – $2420 Segment 4: total revenue is from $2421 - $5742
  • + Information about Segment 1  The total revenue from the segment 1 is 12.79%  The mean of the number of receivers is 3.19  Over 95% of customers do not have DVR & HD service  76.53% of customers are female  61.12% of customers are single  81.23% of customers’ education level are high school and some college  The mean of income is $34,158
  • + Information about Segment 2  The total revenue from the segment 2 is 29.54%  The mean of the number of receivers is 4.98  55.83% of customers do not have DVR service  93.8% of customers do not have HD service  61.62% of customers are female  55.87% of customers are single  80.99% of customers’ education level are high school and some college  The mean of income is $36,403
  • + Information about Segment 3  The total revenue from the segment 3 is 27.99%  The mean of the number of receivers is 6.76  78.39% of customers have DVR service  Only 22.57% of customers have HD service  57.35% of customers are female  51.77% of customers are single  79.92% of customers’ education level are high school and some college  The mean of income is $37,647
  • + Information about Segment 4  The total revenue from the segment 4 is 38.68%  The mean of the number of receivers is 10.69  86.64% of customers have DVR service  79.84% of customers have HD service  53.85% of customers are male  50.87% of customers are married  23.48% of customers’ education level is completed college  The mean of income is $39,721
  • + Strategy – Segment1  Customer acquisition – not going to acquire  Customer retention Up-selling HD & DVR service Target: male, living in a single family, having 6 rooms or less, high school or some college DVR: homeowner, married HD: homeowner, home business, or computer  Communication Direct mail and email
  • + Strategy – Segment1
  • + Strategy – Segment 2 Customer acquisition – not going to acquire Customer retention Male customers: Up-selling HD service Target: homeowner, gourmet food, or computer Cross-selling DVR service Target: homeowner, upscale, or computer Female customers: Incentive to keep current female renew contract and get 3 months of premium service free Communication Email, in-program message, incentive
  • + Strategy – Segment 3 Customer acquisition Target new customers with similar customer profile, some college to college, male/female, near the age 42 who lives in a single family house that they own Customer retention Up-selling HD service: Target: homeowner, upscale, married, or computer Increasing the retention rate: Free HD service for a year with 2 years contract Partnership with local stores to provide HD service bundle Communication Direct mail, email, in-program message, Direct Response TV advertising, and telemarketing.
  • + Strategy – Segment 4  Customer acquisition Target: male, married, education level in college, higher number of rooms in household  Customer retention Cross-selling New package bundle to customers who are about to renew contract Free credit to use PPV service  Communication Direct mail, email, in-program message, Direct Response TV advertising, telemarketing, and face to face marketing.
  • + Differentiation  Exclusive contracts with apartment complexes, condos, townhome communities as well as new build communities.  Partnership with retailers for HD service.  Offer PPV credit for the most profitable segment in the company  Tracking customers through the company’s website, digital magazine, and newsletters  Face to face marketing to partnership with local franchises such as TV network
  • + Field Experiment  Conduct a field experiment for segment 3 & 4 testing rather or not there is a difference in the response rates between direct-response TV marketing and direct mail.  Period: 6 months  2 Suburban Areas, one is testing group another is control group  Determination: Response rate from each Direct Marketing strategy.  Separate our sample segments into the following:  Direct-response TV marketing  Direct mail  Both direct-response & direct mail  Control—neither direct-response or direct mail
  • + Q&A