Independent Operator of the Year – Cable ONE
Business success often hinges on employee commitment, quick thinking by management and—more often than not—luck. The story of our MSO of the Year certainly shares those elements, but it also includes some deliberate pacing, several course corrections and more than a bit of bad luck.
That Cable ONE exists at all is a story in itself. It began when The Washington Post Company entered cable in 1986, with about 350,000 customers from the purchase of Cap Cities Cable. At the time, Post-Newsweek Cable was cable’s 26th largest. Just five of the 36 largest cable company owners in 1986 stayed in the business: Cox (1.4 million subs at that time), Comcast (1.1 million), Newhouse (1 million), Cablevision (627,000) and Cable ONE (369,000).
Then Cable ONE went against the conventional wisdom. In late 1990, as many operators were scaling up or getting out of cable, the MSO implemented its Safe Harbor Strategy. It exited tiny rural areas and metropolitan markets (Chicago, SF, Indianapolis and others). Instead, it bet heavily on large towns and small cities. As President/CEO Tom Might says, “We built a smaller market strategy a decade before it was cool.”
At about the same time, Post-Newsweek Cable rebranded as Cable ONE and shifted focus to customer and employee (or associate) care. Customer satisfaction surged and Cable ONE ranked #1 in J.D. Power’s 2000 Cable Customer Survey. While Cable ONE’s sample size now is too small to be included in the J.D. Power annual survey, customer service excellence continues. In bundle surveys done by Consumer Reports (2010 and 2013), only Bright House and DISH topped Cable ONE in video in the 2013 survey, and only Bright House and Cox bested it on Internet.
Because Might and his team believe that customer satisfaction and cost containment are based on high employee morale and long tenure, in 1997 Might embarked on a personal mission to boost employee satisfaction. Might personally has led 9 biannual employee surveys since 1997. In 2006, when CableFAX: The Magazine predecessor CableWorld began its yearly Best Places to Work in Cable survey, Cable ONE was among just 3 operators on its list. Company-wide, average tenure is 10 years; 14% of employees have remained for more than 20 years. The average tenure of its 16 senior executives is 20 years.
In 2008, Cable ONE adopted the strategy advocated by former Amazon.com chief of global customer service Bill Price in his book The Best Service Is No Service. Essentially, Cable ONE vowed to reduce costs by eliminating unnecessary customer contact based on Price’s belief that the fewer times customers need a company, the happier they are.
As a result, truck rolls and phone traffic were down 23% in the 1st quarter of 2013 compared to the same period last year. Phone calls have dropped from 6 million to almost 3 million. Teams in the field and some in Cable ONE’s Phoenix, AZ, headquarters work toward daily targets, dubbed Wildly Important Goals (WIGS). Most are linked to reducing avoidable customer contact. While less customer contact could lead to reduced body count, Might says “we have never laid off associates… they see the reduced work load as a benefit for meeting their WIGS.”
Last year, Cable ONE made a huge shift, moving from a Market Share Strategy to a Lifetime Value Strategy (LTV). MSS was based on a $75 triple-play. The aim was to offset the low, $75 price with volume gains. As Might says, “We put all our eggs in the triple-play basket just as it collapsed.” Essentially LTV calls for Cable ONE to target quality customers, eschewing short-termers. Might says LTV has meant gains in the quality of customers, cost savings and cash flow.
Skip to today and Cable ONE again is moving at its own pace, investing nearly $60mln into an infrastructure upgrade. It also is enhancing its TV Everywhere offering after famously moving slowly on VOD. As ACA COO/VP Rob Shema says, “They’re followers, not leaders, but they’ve proved you don’t need to be first to be best.”
• Cable ONE is the 10th largest MSO, with 2,100 employees and some 730,000 customers in 42 markets in 19 states, although 75% are concentrated in five states: Idaho (24%), Mississippi (20%), Texas (12%), Arizona (9%), and Oklahoma (9%).
• Cable ONE has been the bull’s eye for the worst hurricane and tornado in U.S. history. Katrina did some $60mln in damage to Cable ONE. Almost 25% of Cable ONE employees suffered major damage from the Joplin Tornado. In both cases, its corporate culture of taking care of associates helped all to come through with flying colors.
ED NOTE: Go here for the entire 2013 Top Ops issue.