Operation OK From Tulsa to Muskogee

BY SHIRLEY BRADY You can’t talk about Cox Communication’s cable operation in Oklahoma City — the 45th-ranked market in the country — without taking into account what’s going on 15 notches lower on Nielsen’s list of top markets. That’s because Cox runs Oklahoma City and No. 60 market Tulsa as one business unit. Cox’s Oklahoma market also includes outlying cable systems in about 40 smaller communities such as the charmingly named Antlers. With roughly three-quarters of cable subscribers in Oklahoma making monthly payments to Cox, the company relies on Dave Bialis, VP/GM of Cox Communications Oklahoma, to manage growth in the statewide organization, which has its headquarters in Oklahoma City. And what growth it’s been. Since 1999 the cable operation has mushroomed from about 100,000 subscribers to approximately 525,000 today. Oklahoma City now accounts for about half (265,000) of the state’s cable subscribers, compared with Tulsa’s roughly 175,000 subs. Cox has invested more than $300 million in capital investments in the market to date. The primary driver for the statewide growth “has not been adding customers but multiple acquisitions,” says Bialis, who has been running Cox Oklahoma since 1992. “The challenge is how to smoothly integrate those different systems into one seamless, effective and efficient operation so it’s not just a hodgepodge of systems.” Cox’s move to decentralization, he adds, means “We make the decisions here — but we also have the accountability.” Now that Bialis and his team have hit the half-million subscriber mark in Oklahoma, and almost all the cable plant is upgraded to digital, his biggest task this year is to further refine the operation by enabling his management team to further increase efficiencies. Case in point: Shelli Osborn, VP of customer service and sales for Oklahoma, has been charged with streamlining her team’s functions over the past year. Customer calls are now handled by a virtual call center that routes billing inquiries to Tulsa while sales and technical support matters are handled in Oklahoma City. “We now handle 98% of our activity internally, with minimal outsourcing,” says Osborn, adding that improvements in Oklahoma help other Cox markets. “We have access to all the different databases, so when [Cox] San Diego’s phone system went down we were able to handle their customer calls.” Osborn, who previously worked for Cox in San Diego, Hampton Roads, New Orleans and the corporate headquarters in Atlanta, credits the company’s investment in technological advances for its recent improvements in efficiency. “We’ve invested across Cox a significant amount of money in the technology of our call centers, into improving our call routing and better leveraging our resources,” she says. “We were a beta site for Aspect CallBack [a virtual hold technology] and worked with Aspect to develop it. It’s much more cost-effective. During the estimated wait time of three minutes, the customer has the option to hang up and be called back by the next available representative.” Her challenge was not only to operate and manage a large call center — which has grown from 60 to more than 400 CSRs — but to get her employees to buy into it. “It’s all about managing change; we have different operational processes in place that help us bring best practices together,” she says. “Last year, for example, we implemented automated schedules. In the past, most calls came in Monday to Friday between 8 a.m. to 7 p.m., but more customers now call in the evenings and weekends so we needed to expand our hours. Automating schedules helped us balance our employees accordingly.” Such measures have been paying off. “We’ve completed our functionalization, reduced avoidable truck rolls, increased sales results, reduced our credit adjustments, improved accuracy and our customer satisfaction results greatly, and steadily improved throughout 2002,” Osborn says. Oklahoma City is the launch pad for the state, so Osborn’s team is also on the front line of helping to sell and educate customers about the expanding array of products available in the market. “In December we launched HDTV in Oklahoma City with selected retailers [the full market launch was last month] and we were getting ready to launch SVOD, and we’re now preparing to launch our Entertainment on Demand product and home networking,” says Osborn. “We are going to full market launches with SVOD and VOD toward the end of this month in Oklahoma City.” The companywide Cox University initiative, an online training program, allows customer care, sales and technical staff to master each product. InfoNet, a Web-based tool on employees’ desktops, highlights current marketing campaigns and news flashes. “HDTV requires more complex installation and understanding, because so few people have it here yet,” says Osborn, “so our technical team went through an eight-hour HDTV course.” As of last month, four channels are now available in HDTV: Oklahoma City network affiliates KFOR (NBC) and KOCO (ABC) and pay channels HBO East and Showtime East. Servicing Oklahoma’s diverse markets, from Oklahoma City’s 636,970 TV households to the smaller towns, presents Cox with further technical challenges. Oklahoma City is on a Scientific-Atlanta platform, Tulsa is a Motorola site and Greater Oklahoma City has Hits to Home, which means Cox technicians need to master the different technologies. Cox customers get a single bill that includes advanced products such as HDTV or Xbox Live, which is now available to broadband subscribers. “The bundle is alive and well here,” Bialis says. Oklahoma City, he adds, has made “excellent progress” with its residential telephone service. Last year, Oklahoma City, along with Omaha, outpaced other Cox systems for penetration of telephone services such as voice-mail and call waiting or forwarding. Customers can buy a service assurance plan for $3.25 a month to cover the maintenance and repair for cable, high-speed Internet and telephone wires, even if Cox is not the household’s phone provider. Cox customers who take Cox Digital Telephone in addition to basic cable and high-speed Internet service can receive a free premium channel or 100 minutes of long-distance each month. An online savings calculator (at www.cox.com/okc) shows the value of digital telephony. Cox also tapped Oklahoma City as its test site for IP telephony, conducting a trial last year to blend VoIP technology with its existing circuit-switched plant featuring technology from Nortel Networks and Arris. On the programming front, state and high school sports are popular, while a Hispanic tier with eight channels is available for $6 a month. The market made headlines in November 2001 when it announced in the local press its intention to drop the Sundance Channel. After Robert Redford pleaded on behalf of his channel, Cox decided to maintain the service on its digital lineup. Redford visited the system last May to thank Cox staffers in person. Cox Business Services Oklahoma also made headlines last year. Now the second-biggest Business Services division for Cox, it has major accounts such as Tinker Air Force Base, hospitals and schools including Oklahoma University. But its biggest coup was landing the state as a client in August, making it the first cable company to wire a state capital complex. Cox now provides digital voice, data and commercial video services to all state government buildings, handling 20% more calls than the previous analog infrastructure. The contract, worth a reported $1.75 million, beat a bid from its biggest competitor in the state, SBC Communications Inc.’s Southwestern Bell subsidiary. “Not only was this a high-profile job — the state has more than 200 agencies with 18,000 employees,” says Mollie Andrews, Cox Business Services Oklahoma VP/GM. She adds that one of those agencies is the Oklahoma Corporate Commission, the state body that oversees telecommunications companies — including Cox Business Services — in Oklahoma. Last year, Andrews also hired a network of agency managers — independent contractors who represent Cox Business Services and receive a commission on any contracts they land — to expand the service in Greater Oklahoma City. The strategy has resulted in double-digit growth in 2002 for Oklahoma City. “We now have 30% to 35% of this market in terms of dollars spent,” she says. The unit — which until November reported to the regional VP based in Atlanta and now reports directly to Bialis — has also seen growth in servicing small and midsize businesses. Andrews’ team is now targeting alliances and professional organizations. Her sales force is pitching statewide associations of retailers, lawyers and teachers with customized offers for each group. Mark Kanter, who oversees ad sales as the VP/GM of CableRep Oklahoma, is also focused on growth. His team is pitching packages for the six digital networks (Toon Disney, ESPN Classic, ESPNews, History International, Biography and Lifetime Movie Network) added to their sales quiver in December. His team’s challenge is to boost ad sales in Tulsa — which is still reeling from layoffs at local divisions of WorldCom and American Airlines — while not neglecting Oklahoma City and beyond. A revamped organizational structure that echoes the state’s cable operation is helping to meet that goal. Kanter oversees the statewide operations out of Oklahoma City while a general manager runs the Tulsa office and a general sales manager handles accounts in Oklahoma City, with separate sales teams for each market. Sales reps based in smaller markets such as Muskogee and McAlester offer face-to-face service to clients. “When Cox consolidated Oklahoma over the past couple of years, they gave us a great opportunity here, as Cox now represents 78% of the cable homes in the Oklahoma City DMA,” says Kanter. Back-office consolidation helps CableRep service both DMAs. All traffic functions have been handled through Oklahoma City since 2001, when two computer networks and different software were merged into one platform, which boosted efficiency and profits. Automotive continues to be the top advertising category for Kanter’s team, with retail also important. “If the automotive guys catch a cold, we catch a flu,” he says. “I was concerned when the car dealers had slow sales in November and December, but overall they had a good year, and we’re definitely seeing things turn around right now.” CableRep has also seen a surge in fast-food advertising, landing McDonald’s for the first time last year. The fast-food giant was won over by CableRep’s idea for a “Latino youth leader of the month” campaign in partnership with Oklahoma City’s Latino Community Development Agency and public schools. McDonald’s now awards scholarships to outstanding students — who are congratulated in bilingual TV spots on Cox Cable — from the city’s Hispanic population, which grew 108% from 1990 to 2000. Such savvy strategies attract advertisers like local furniture retailer Bob Mills — who says TLC’s Trading Spaces has been “huge” for him — and media buyers such as Oklahoma City’s New West Group. This month, one New West client (a premium used car dealership) is shifting its entire ad budget from radio to cable. “CableRep is an extremely cost-effective way to reach a specific audience, such as upper-income households, because it allows us to have repetition and frequency,” says New West Group creative director Bob Hammack. “Suffice to say, I’m a huge fan.” EMPLOYEES: 1,250 MILES OF PLANT: 5,000 AREAS OF COVERAGE: Oklahoma City Metro SUBSCRIBERS: 265,000 HOMES PASSED: 435,356 PERCENT UPGRADED: 98% at 750 MHz LIMITED BASIC RATE: $6.31 and $10 (depends on area) EXPANDED BASIC RATE: $35.50 for complete basic DIGITAL RATES: $47.50 to $81.50 HIGH-SPEED DATA CUSTOMERS: N/A HIGH-SPEED DATA RATE: $39.95 (two products), $49.95 (data only) LOCAL PHONE CUSTOMERS: N/A TELEPHONY RATE: $12.36 first line, $9.20 second line HDTV: Available to Cox subs with HD set-top box or converter (retail partners sell HD converters for $499 plus tax) HOME NETWORKING: Standard installation charges (includes networking of two PCs): $299.95 (wired), includes installation charges and equipment; $349.95 (wireless), includes installation charges and equipment. Additional PCs: $49.95 (wired) or $99.95 (wireless) per PC up to four PCs. Monthly service fee is $9.99 for Home Networking Assurance Plan. AD INSERTIONS: 43 channels SOURCE: COX Bialis, a 19-year Cox veteran, oversees the company’s cable operations in Oklahoma. Previously CFO for the Cox-owned newspaper The Atlanta Journal & Constitution, Bialis is active in many community organizations, including the United Way of Oklahoma City, Oklahoma City Public Schools Foundation, Greater Oklahoma City Chamber of Commerce and the State of Oklahoma Science and Technology Council. Head of Cox Business Services Oklahoma since 2000, Andrews is responsible for all commercial video, voice and data sales and services. Prior to joining Cox, she worked in the telephone industry as global sales director and national sales manager. Andrews serves on the Greater Oklahoma City Chamber Board of Advisors and the Industry Advisory Board for Oklahoma State University Masters in Telecommunications Management Program. Kanter has led CableRep Advertising in Oklahoma for 15 years. He joined Oklahoma Cable Advertising in July 1985 as an account executive, eventually becoming general manager. He is active with the Oklahoma City Philharmonic Orchestra and is vice chair of the Statewide Business in the Arts Committee, among other organizations. Kanter and CableRep were recently honored with the State of Oklahoma Governor’s Arts Award. Osborn has been with Cox Communications for seven years and has more than 18 years experience in the telecommunications industry. She joined the Oklahoma management team in 2002, from her previous position as director of customer care at the Cox corporate office in Atlanta. Prior to Atlanta, she served as VP of customer operations for Cox New Orleans. Osborn is a board member with Special Care, a United Way agency. Comparison of Cox subscribers in Oklahoma City to the top 75 market average.