Wednesday, August 27, 2008

Cox Marketing in the Field

Cox, as the Independent notes in this week's issue, is in the field with a marketing survey. I started hearing about a survey about 3 weeks ago and I gather that something had been in the field a bit longer than that from subsequent discussions.

The current survey is, by all accounts, a straightforward marketing survey that is unabashedly aimed at figuring out how to get and retain customers in the face of competition from LUS. (This is in pretty marked contrast to the push polling that set the citizens of Lafayette's teeth on edge during the fiber battle.1,2) As it is recounted to me the most interesting questions were "hypotheticals" about how best convince Lafayette's citizens to sign contracts to lock them into Cox before LUS' competition actually appears. One question asked if giving a 10% price break would lead a customer to sign up for a 12 month contract and another asked if doubling internet speeds for the same price would convince the user.

The story, which is illustrated by Sharon Kleinpeter standing in front of an empty server rack, gets at least one fact seriously wrong and a quick trip to the internet would have prevented the mistake. The IND compares LUS' cheapest, slowest speed (10 mbps up & down!) to Cox's second highest of 4 tiers: 9 mbps down and a measly 786 kbps up. Cox's cheapest, slowest tier is actually 786 kbps up (that is .786 mbps.! --the numbers don't start till after the decimal place!) and 256 Kbps down. That's a better than 10:1 contrast in download and a whopping 40:1 in upload.

That gaffe aside there are interesting tidbits in the article. LUS will have 3 internet tiers to Cox's 4. Levels 1 and 2 will both be more than 20 megs...Cox's highest speed is 15 mbps. Huval also touted the 100 meg intranet (my favorite feature) and:
“We’re not going to require a contract,” Huval adds. “We’re not going to bind anybody. Somebody takes our service one day and decides to swap then that’s what they’ll do. We’re trusting that the people of Lafayette are going to see the benefit of what we bring to the table, which is going to be more than a pricing benefit. It’s also going to be the capability and the and the clarity.”
Real competition might actually be coming to Lafayette and it's ironic proof of the pro-fiber position that Cox is so unfamiliar with real competition that it has to run a survey to figure out what might work against a superior network. As soon as the marketing department figures out just what it should offer expect a new round of 6 month specials...especially in the first build area.

LUS has its response in place and it's surprisingly low key:
As for pricing, LUS is still shooting to offer its triple-play package of phone, cable and Internet service for 20 percent less than Cox’s standard rate, which remains about $105 a month. This puts LUS’ price at around $85 a month. While Huval suspects Cox may be able to beat that price with some of its promotional plans, LUS is counting on many Lafayette customers looking at more than price. “I think there are going to be some people who are looking at price and price only,” Huval says, “who are going to fall for [promotional offers]. I think most customers, most people in Lafayette, realize the only reason why Cox is offering any of this now is because there’s a competitor in town. And we’ve gotten a lot of support, both at the polls and otherwise in the community for our project.”
I'm not signing any long-term contracts...

(A thanks goes out to Nick who first alerted me to the survey.)

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