Summer 2002
Public Affairs Issues
The Context Necessary to Accept Price Changes
Editor’s note: The following article provides
guidance on communicating price changes
for cable services. The brief is an original
work compiled from the experiences of cable
industry veterans and other sources.
The key is crafting (and testing) messages
about consumer benefits and delivering those
messages in our marketing, public affairs
initiatives and direct customer communications
throughout the year.
Veteran cable executives have learned
Employees:
It’s likely that veteran employees are cynical
about price increases or see them as routine.
Take the time to help employees understand
price increases in a competitive world. Start
with a mindset change: Use the term “price,”
which refers to what companies charge in a
competitive environment instead of the term
“rate,” which refers to what monopolies are
allowed by the government to charge for
services. Share talking points with all
employees to use as they encounter neighbors
and friends with questions about the price
changes – not just CSRs and technicians likely
to field customer questions. Our employees
represent the company to everyone they meet.
When employees can articulate the reasons for
price increases, they can be effective
ambassadors for the company.
much over the years about communicating
price increases. As we make those annual
announcements in an increasingly
competitive environment, it’s worth taking a
moment to dust off our time-worn
communication strategies, retaining what
works and ditching what doesn’t.
The key is targeting messages to the
appropriate audience, reinforcing those
messages in a variety of ways, and
communicating price increases in the
context of an ongoing relationship with our
constituencies.
Know Our Audiences
Customers:
In crafting messages, consider what’s
important to them, not us. Develop messages
that will resonate with customers and, as
importantly, invest in research to test those
messages. We may find it effective to tout
investments that increase the value
proposition for customers – investments in
the physical plant, additional channels or
products, or more or better-trained
employees. We also may find it effective to
put price increases in perspective, either
compared to other entertainment options or
the overall product offering. And we may
find it effective to emphasize the local
nature of our business, both our ability to
provide local customer service and our
commitments to our communities. Other
messages, such as choice and flexibility,
might also be effective.
Keep the internal communication feedback
loop open. A week or so after customers
receive notices, ask employees what questions
they’re getting about price increases and how
customers are responding to the messaging we
provided. Tweak responses as necessary based
on that feedback. As a further step, use your
company’s monitoring system to hear for
yourself how customers are responding to the
messaging.
Regulators:
A good place to start is reviewing franchise
agreements to ensure compliance with any
notification requirements beyond federal or
state requirements. In letters to local franchise
authorities (LFAs), build on the messages we
use with consumers, perhaps with additional
emphasis on local investments or greater
detail in explanations for increases. If the
LFA is regulating Basic Service Tier and
equipment rates, take time to meet with
officials one-on-one prior to notifying
customers. Remind them that increases are
in compliance with the law, don’t assume
that city staff or elected officials understand
how prices are (and aren’t!) regulated, and
be prepared to explain the process. Give city
staffers direct access to someone at the cable
company to whom they can refer questions
and concerns from constituents.
Media:
Some operators still send out a press release
about price changes; others have determined
that there’s no reason to proactively
announce price changes to the media.
Operators who opt not to announce an
increase to the media still should be
prepared for media calls after customer
notices go out. Many have had success
pitching the reporter on doing a comparative
story about competitive products or a story
that highlights the new channels or new
products being added. Reporters who have
covered the industry a while may just be in
the habit of portraying cable as a
monopolistic utility whose rates are set in a
vacuum; help them break that habit. If they
insist on writing a story, we may be better
off with one that puts prices in perspective
than a story that reports a price increase in
isolation.
It’s All About Relationships
Underscoring all of the above advice,
however, is that it’s all about relationships.
Price-increase time is not the time to
introduce ourselves to our customers,
regulators and media. If we are reaching out
to these constituencies year-round to build a
positive image, they can view price changes
as we do: just one element of our company
and our business strategy.
Cable operators are technology leaders. We
provide products and services that
consumers are asking for, in an increasingly
competitive environment.
Cable operators are partners in their
communities through their extensive
outreach: educational initiatives,
scholarships to local schools, Cable in the
Classroom programs, donating free highspeed Internet service to schools and
libraries, supporting local contests,
sponsoring community non-profit
organizations and events, and much more.
Year-round, we must tell both stories – about
our products and about our corporate
citizenship – directly. We can and should work
the media to get the word out in traditional PR
placements. But we must use other avenues to
tell our own story. Here are just a few of the
most obvious (but underused) mechanisms:
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Seek press coverage of every major
contribution or event sponsorship and
arrange compelling photo ops
surrounding them, ideally encouraging
the recipient to directly solicit coverage.
Send letters to local franchising
authorities and elected officials about
every new product launch and every
major community sponsorship. Or,
consider sending a quarterly newsletter
designed specifically for regulators.
Include elected officials in every event
we host. Invite them to press
conferences, have them cut ribbons on
new product launches, put them at the
top of every VIP invitation list.
Use our own ad-avails to promote our
community-outreach initiatives.
Host media back-grounding sessions
with individual reporters and editors so
they can understand – at their
convenience, not on deadline – how the
cable business works and the role of the
operator as an important community
and corporate partner. Make sure they
understand the fundamentals of how
we’re regulated, the limited role of rate
regulation, and how competition is
benefiting our customers.
Prepare regular bill-stuffers or customer
newsletters about our products and our
community commitments.
Work with marketing to reinforce these
value messages in cross-channel and
other advertisements.
Use our Web sites at every opportunity.
Regularly post customer bill-insert
newsletters, image marketing
campaigns and community-involvement
press releases. At price-increase time,
post a letter to customers, emphasizing
the key messages.
Communication is an ongoing process. We
must repeat messages over and over until they
are heard and believed. By carefully crafting
our messages, and then repeatedly delivering
those messages to constituencies in a variety of
ways, we provide our customers with the
context necessary to accept price changes.
© Copyright CTPAA 2002