How Should MSOs Respond to New Competitors?

Cable MSOs once again must reinvent themselves in order to maintain a level of differentiation against their competitors. But where should executives focus as they strive for competitiveness?

A recent study finds 54% of cable customer attrition is due to negative customer experiences. This same Maritz study found that two-thirds of telecommunications customers who defect point to employees as the primary culprits. Worse, three-quarters of those with a negative service experience told at least one other person. Cable companies lose more customers themselves than competitors take away.

To reach a new level of differentiation, cable MSOs need to deliver a customer experience that’s consistent with the brand promise. Customers experience the brand through interactions with a sales or service employee every time they do information gathering, ordering, experience installation and set-up, manage upgrades and service charges, engage in billing/dispute resolution, call customer service or repair service. That is a lot of touch points.

Where should a cable MSO start? With the employees that customers interact with first—your sales force. Here are six keys to building a sales team:
           

1. Sales Hiring Practices
Recruiting and hiring the right people starts with the desired end result (“I really want my cable service through him/her”). Does the candidate have traits found in top performers? What’s the competency model?
       
2. Training and Reinforcement
MSOs cannot wait several months for a new salesperson to be productive. Optimize training programs and build them around customer and employee research. You’ll drive better performance out of rookies, core sales staff and recognized MVPs.

3. Sales Coaching
Sales Executive Council research says sales reps who received coaching for just three hours a month exceeded their goals by 7%, boosting revenue 25% and increasing the average close by 70%. Coaches must foster a self-directed learning environment by providing questions, not answers. They must help salespeople develop problem-solving skills.

4. Incentives and Recognition
A self-funding, non-cash-incentive program provides motivation to drive increased sales performance. You must address needs and drive performance for sales reps at all levels—the top tier, your core and new hires.

5. Top-Performer Recognition
Top performers already are self-motivated. With them, your focus must be retention and continued growth. Obtain feedback from those likely to be rewarded before designing incentive and recognition programs.            

6. Core and New Hires
A 2004 Maritz poll found three-quarters of participants in incentive and recognition programs aren’t motivated by top-performer programs because they don’t perceive an opportunity to win. A “moving the middle” initiative works with core employees and new hires. Everyone has an opportunity to earn.

Service-focused employees are part two of the solution. Cable MSOs must integrate customer and employee perspectives to drive improved performance. A 2008 study found that eight of 10 customers who were satisfied with the services received also said they would listen to additional sales offers. When it comes to improving service, cable MSOs must:

1. Understand what customers and employees say
Engage customers—both consumers and SMBs—in research. Get their full take on attitudes. Listen to your employees. Identify specific links to key business results. You’ll likely find critical gaps between customers’ desired experiences and what employees deliver. Employee behaviors drive business results. Uncover them.

2. Enable employees to perform
Customer-experience breakdowns are the roots of customer churn. All employees must be “owners” of the customer experience, including service technicians and call center representatives. Host learning sessions for teams. Supply performance aids that build knowledge and skills. Offer coaching for leaders. Repeat and reinforce.

3. Motivate employees to excel
Once standards are set, cable MSOs must establish recognition tools and rewards that are meaningful to individuals. For technicians and customer service reps, evaluate and reward behaviors that have the most positive influence on the customer experience. Such behaviors include consistency in first-call resolution, high satisfaction scores for quality/speed of installation, high satisfaction scores for attitudes with customers and getting caught “doing something right.” Research suggests non-cash rewards are more effective in driving lasting behavior change. They are built on choice, allowing participants to earn appealing rewards that won’t get absorbed into the family budget. Consider employee empowerment, more meaningful communication, formal recognition and meaningful incentives including non-cash perks.

4. Integrate a service culture throughout the organization
Continually communicate a compelling service mission set against the brand. Doing this gives energy to the everyday work of customer experience. Gain buy-in and alignment of leaders across the organization. Dismantle organizational silos that stymie goal integration and make producing results difficult. For example, adding a referral program enables service technicians to become part of the sales force. With proper training and coaching, they can identify sales opportunities when interacting with customers.

Cable MSOs are at a crossroads. To sustain true differentiation under increased competitive pressures, they must optimize both the sales process and the customer experience. By crafting the right strategies, cable organizations can transform the industry and build credibility with skeptical customers.

Mark Syp is group VP, major cable and telco accounts, for Maritz, where he develops research and designs employee effectiveness initiatives for cable operators. He welcomes questions at [email protected], and more details can be found at www.Maritz.com.