INSIGHT

THE BOTTOM LINE BLOG

 

When will Comcast learn? With its recent failed merger attempt with Time Warner Cable behind it, Comcast must search for what it is lacking. Time and time again, the answer is staring it in the face: a great brand experience.

Cable companies don’t get it. They behave like utilities in one of the most competitive markets in the world – entertainment content. It’s no longer about infrastructure and milking customers. For the last 15 years, cable companies went from nearly a 100% share of the multi-channel television market to under 60% and the trend is accelerating. Why is that? Universally bad customer service, poor program offerings, a consistently disappointing viewing experience and being tone deaf to customer needs. The big three cable companies –Comcast, Time Warner and Charter (who is now trying to acquire Time Warner) – consistently rank at the bottom of customer satisfaction surveys.

This is particularly the case with Comcast. With a website dedicated to its demise (www.comcastmustdie.com) inspired by Ad Age Editor Bob Garfield’s frustration at epically horrible customer service and a legion of scathing of editorials, blogs and customer rants, Comcast seems oblivious. Things got so bad that, a few years ago, Comcast hired an individual dedicated to responding to customer complaints on social media within 30 minutes (they should have hired a team). Surprisingly, Comcast won a marketer of the year award from Ad Age for the valiant effort of this social media triage unit. Nevertheless, this was like putting on a band aid on a gaping wound that requires a tourniquet.

While the cable companies flail, satellite television and even telecomm carriers have provided innovation and great service. DIRECTV has been the leader in providing the best television viewing experience, Dish Network has chosen value and innovation as a differentiator and Verizon FiOS service has delivered the strongest overall experience combining its television service with a strong bundle. Among the cable companies, only Cox has successfully innovated its DVR technology and offers good customer service.

The biggest complaints about cable and satellite providers are that they forced consumers into expensive channel packages they didn’t want and they over charged them for equipment. Cable bills soared and satisfaction declined. Netflix and other “on-demand” content providers such as Hulu, Amazon and Google changed the equation. Now consumers can pick the entertainment they want to watch at much lower prices. As their core business model is collapsing, traditional cable and satellite companies should be quaking in their boots. Customers have begun to “cut the cord” and remove their television service. Sure, consumers might experience a brief moment of withdrawal, but being free of Comcast (and other providers) is a wonderful payoff. The cord cutting has just begun and is expected to accelerate, unless something is done…and fast. We believe that Comcast (and other cable and satellite companies) can still salvage their position by focusing on the customer experience.

Why the Attempted Merger?

Comcast’s attempted merger with Time Warner Cable was not for the right reasons. And most of them were internal. They wanted greater scale for better leverage in their negotiations with programmers, they wanted to stand up to social media giants (Facebook and Google) who are taking away a greater share of the television advertising pie and they wanted to reduce infrastructure costs and improve margins. While the merger was being reviewed, Comcast was one of the top three spenders on lobbyists in Washington, D.C.

No one would argue that Comcast should take steps to be more competitive. However, throughout the merger discussion, barely a peep was heard about the importance of a better customer experience or even passing some of the savings along to consumers.

What Should Comcast Do?

In order to position itself to survive in the future, Comcast must shift from an internal focus to a customer driven focus. Really understand what its customers want, become a true leader in innovation (especially online programming) instead of a lagging follower, enable consumers to pick and choose the entertainment they want to watch, where they want to watch it and, for goodness sake, focus on improving their customer service. With its cable backbone, customers grudgingly need Comcast’s broadband service. This affords Comcast an opportunity to remake its television service and reduce “cord cutting”. It’s not too late for Comcast and other cable and satellite players. The record industry didn’t own the infrastructure when Apple’s iTunes disrupted the entire business model. Comcast has a small window to truly resurrect its brand through a compelling customer experience. Are there any examples to look to?

A Work-in-Progress

The need to survive often forces companies outside of their comfort zone. Take Best Buy. After the electronics big box retailer crushed competition (Circuit City and department stores), Amazon and other online retailers have threatened their dominance. Best Buy sales have suffered and the retailer has had to reinvent itself with a better in-store customer experience, creating “store-within-a-store” brand experiences for Samsung and Apple products and changing the product mix both in-store and online to better reflect consumer purchase patterns – especially millennials. And during the holidays, consumers were able to order products online and pick them up in-store on the same day. The jury is still out but innovation is borne out necessity.

Comcast faces a long and ugly road but it must radically change to avoid a painful decline into oblivion. Can Comcast change a history of internal focus to really deliver innovation and a superior customer experience? It has a lot of nimble and aggressive competitors (new and old) that are making rapid changes. Is Comcast up to the challenge? Is the rest of the cable and satellite industry? As they say in television….stay tuned.

Pin It on Pinterest

Share This