New BSP Mantra: Retention, Retention, Retention

Doug Williams | May 29, 2008, 10:33 AM

DSLReports picked up a story from CED about Comcast’s new retain-at-any-cost customer retention program set to begin June 1. Clients will recognize that I’ve been writing about the need for BSPs to shift from an acquisition strategy to a retention strategy. Why is this important?

1. Growth in the broadband market is slowing, so there are fewer new broadband customers to target. Our new Broadband Forecast was just published, which shows our view of the market opportunity through 2013.

2. With the proliferation of bundles in the market today, losing a broadband customer means potentially losing revenue from two, three or even four services, not just one.

3. The promotional periods and term contracts BSPs are using to entice new customers means that a BSP may be unable to win back a lost customer for 12 or 24 months.

I also see customer retention efforts perpetuating promotional pricing offers for customers who face steep increases upon expiration of those introductory offers. This is good news for consumers, but it could hinder revenue growth for carriers. Or, it could just mean that we can expect the providers to raise prices for value-added services (e.g., DVR) to make up some of the difference.

Interestingly, I happened to see a Comcast customer acquisition commercial this morning on TV. In the “Dads and Grads” spot, Comcast offers a $200 cash rebate for customers who signed up for the Preferred Plus bundle. On its website, $150 cash rebates are available to any new triple play bundle subscriber. I don’t recall Comcast mailing out checks to entice new customers to come on board in the past. Looks like the company is becoming more aggressive on both fronts.