A PROGRAM FOR T ELCO C OMPANIES IN W ISCONSIN Arthur Middleton Hughes VP The Database Marketing Institute

It’s a big state. Someone has to provide the phone service for 5.5 million talkative folks.

L AND L INES ARE IN TROUBLE US Phone Landlines Per 100 Population US Statistical Abstract

C REATIVE D ESTRUCTION  Monopolies have become competitive  Cable is muscling in on phone companies  Phone companies are fighting back with TV  Both are offering the internet  Wireless is stealing from both  You have to offer many services to survive

C ELL P HONES T AKING O VER Annual Household Spending on Telephone Service

Y OU HAVE TO OFFER EVERYTHING

T HE EFFECT OF BUNDLING  Every additional product that you add improves loyalty and reduces churn by 25%. Adding products boosts revenue AND improves the retention rate of land line customers

T O KEEP SUBSCRIBERS, BUILD A M ARKETING DATABASE A database is more than a list of subscribers It is a tool to use to retain subscribers and to sell them additional products

M ARKETING D ATABASE FED FROM O PERATIONAL D ATABASE The Marketing Database can be outsourced to a vendor. Advantage: keep the costs down, and control what he does. This is your in house billing database

D ETERMINE THE LIFETIME VALUE OF YOUR SUBSCRIBERS We are looking at the career of 60,000 subscribers over a three year period. The lifetime profit from each of the 60,000 is $96.33 To beat that we have to improve something.

W HAT CAN WE DO TO KEEP THEM ?  Communicate with them often  Put them on automatic paper-free billing  Sell them a second product: DSL, TV

E FFECT OF ADDING DSL Churn rate down ARPU Up CCPU up CPGA up Revenue up Lifetime value way up.

DSL B OOSTS P ROFITS

A DDING TV: T HE TRIPLE PLAY The LTV has gone down. Why? It is expensive to add TV -- much more than to add DSL. And, the churn rate has gone up? Why? Competition from Cable and Satellite.

TV IS NOT A WORLD BEATER  There is more competition with TV: Cable, Satellite, and over the air.  But TV and Wireless are important ways of staying in the game and keeping your customers.  The main way to win: communicate often.

W HY COMMUNICATION IS VITAL  All Wisconsin Telcos have additional services to sell.  All have churn problems.  Solution: set up regular communications with all subscribers.  Use those communications to sell more services, and keep from losing the subscribers you have now.

E- MAILS : L OW C OST S ELLING

E- MAIL – VERSATILE AND INEXPENSIVE

F IRST STEP : A UTOMATIC B ILL P AYING “Stop by or call us” You cannot do this on line. What is the benefit to the subscriber?

YOU CANNOT SIGN UP ON LINE IN W ISCONSIN “Visit or call our office”

S EE HOW AT&T D OES A UTO B ILL P AYING

W HY AT&T AND V ERIZON SEND E - MAILS Automatic Bill Paying is the entry point for monthly s that promote additional products. This is why they pay you $10 or $15 for signing up.

S UPPOSE W ISCONSIN T ELCOS USED A COOP ING SERVICE  One company could provide online bill paying service application service with a link on each Telco website.  Each subscriber would get a weekly from his Telco, with local news, sports news, and what is on TV this week, plus info about Telco products.  A coop and text mail service might reach most of the households of WSTCA members with news and promotions from their local Telco.

E ACH T ELCO GETS THEIR OWN E - MAIL SERVICE

W HAT DOES IT COST TO SEND E - MAILS TO SUBSCRIBER HOMES ?  52 campaigns per year to for 20 Telcos with 6,000 subscribers per Telco.  Cost $10.00 per thousand. Cost per Telco per year – 20 companies participating, perhaps $3,120 per year for the delivery plus $12,000 per year for the part time editor.  What would be the benefits?

A SSUMPTIONS  Assume that 20 Telcos participate.  There are 52 campaigns per year.  There is a monthly contest for subscribers. One winner of $5,000 per month. To enter: click on an entry box in the . Nothing to buy.  Each Telco designs their own s. Each has one part time $1000 per month developing copy.

W HAT WOULD BE IN THE E - MAILS ?  What sports, events and movies would be on TV this week – time and channel  Local results of local sports teams.  Video of local sports supplied by teams, and their supporters. Local to the Telco area.  Every opened is an automatic entry in the monthly $5,000 contest. Nothing to buy,  Ads from local merchants  Ads for Telco products

B ENEFITS OF THE E - MAILS  Assume each Telco has 6,000 subscribers  The open rate is 30% because of the $5,000 prize per month.  One half of one percent of the s result in a sale of a Telco product (DSL or TV or PC) with an annual revenue per product of $  Note, average sales due to s from other companies varies from 0.5% to 3%.  Resulting sales per Telco per year $196,279

D ETAILS OF THE E - MAIL PROGRAM Assume a phone company with 6,000 subscribers who sign up for s. Assume 20 Telcos sign up as members to send s Assume a part time local editor who gets $1,000 per month for creating the four s sent out by the Telco Over three years the marketing program could produce total profits of $362,350 per Telco

S ERVICES PROVIDED BY THE E - MAIL VENDOR COMPANY  Link to sign up subscribers and auto bill payers for each member Telco. Telcos do their own billing, and receive all revenue directly from subscribers.  Maintain a central database of subscribers for each Telco. Send s from this database. Telcos can access DB on line and do segmentation. Use cookies so Telco websites and s are personalized.  Shopping cart in s so subscribers can buy services from Telcos on line.  Deliver all s for the Telcos.  Provide a template to each Telco for them to enter their own content for the s.

H OW TO GET STARTED  WSTCA enlists members in the project. Get at least 20 to sign up. Set up an corporation with each Telco an owner.  WSTCA drafts an RFP for a company to provide the services.  Selected vendor creates software for each Telco website to enlist auto bill payers, subscribers, and shopping carts to sell Telco services. Sends both s and cell phone text content. Creates the monthly contest.

G ET THE BOOKS Arthur Middleton Hughes VP The Database Marketing Institute, Ltd