Ship Comes in for Cox San Diego Customers

Cable World, Dec 2, 2002

Byline: ANDREA FIGLER

Turn on FreeZone, Cox Communications' new advertising-supported video-on-demand service in San Diego, and you can catch Kraft Inc.'s infomercial Avocado Basics. Click on the title and, boom, a lady in a white button-down shirt tells you to make sure an avocado is ripe before you cut into it.

While Thomas Paine would probably spin in his grave if a FreeZone viewer hadn't already grasped this bit of common sense, Kraft's simple approach to avocados serves as a good metaphor for Cox's approach to its own products in San Diego. The cable operator makes sure, from point of sale to customer service, that consumers understand its products and how they work - that a home is ready for HDTV before rolling out a truck, just as Kraft seeks to make sure that no avocado is peeled before its time.

For instance, if a customer asks for HDTV - which was launched last month - the first question the Cox sales representative asks is, "Do you have a 1080i television?" says Art Reynolds, VP of marketing for Cox in San Diego. While this may seem basic for technophiles, consumers often buy "HDTV-ready" TVs from retail stores that aren't necessarily ready for HDTV. Next, the sales rep describes the limited amount of HDTV programming and warns of the slight possibility that installation could cost an extra $120 on top of the usual installation fee.

This approach has helped Cox's system in San Diego grow to over 1 million subscribers; about 540,000 video subscribers and the rest either phone, high-speed data or another advanced product. Cox offers basic cable, digital cable, video-on-demand, HDTV, local and long-distance phone service and high-speed Internet service.

More than half of the system's subscribers take more than one product, Reynolds says. Home networking is up next for a rollout, to be followed shortly thereafter by interactive television.

"So our challenge is integrating all of these services into coherent and simple choices for the consumer," Reynolds says. "Because we have everything."

To win over consumers and sell them these services, Cox first had to win over its employees, so it invested in a huge customer care center in San Diego (at an undisclosed price). Cox spends approximately $3,000 to train personnel at the center, which employs about 925.

Housed in a former Costco warehouse, the center has a day-care program, gym, pool table, cyber cafe, sick rooms and more; many of these features were requested by employees, and Cox listened. Unhappy sales and customer representatives, especially in one of Southern California's most beautiful beach cities, would be inefficient. And if you watch the folks stroll the warehouse halls, you'd be hard-pressed to find a gloomy face. Perhaps that's why employees stay with Cox an average of ten years, says Daniel Henson, director of business operations at the center. The center's retention rate is about 80% compared to the 40% to 50% for an average call center, he adds.

Employee retention is key since this center serves more than just San Diego. The center takes care of San Diego's northern neighbor, Orange County, as well as about nine other systems throughout the country for Internet services. High-speed access customers can call up at any time or go online and have a service representative walk them through a problem.

Outside parties, including local government regulators, have applauded Cox's customer service - unusual for an MSO in the age of rising consumer complaints.

"The complaint ratio here is very, very low," says Mark Jaffe, cable TV program manager for San Diego City. "Cox cable is putting a lot of effort into customer service."

Kathy Scoville, a San Diego resident and legal secretary at the law firm Milberg Weiss, also speaks highly of Cox's customer service. "They're always terribly good about technical questions," she says. "With my remote for my digital cable TV, if you accidentally push one button, it messes up everything. I call them and get a technician, and they get to the heart of the problem."

Sometimes, she admits sheepishly, the problem is as basic as changing the time on her recording settings to p.m. from the a.m. But Cox's attention to detail is one reason why Scoville keeps buying Cox product after product. She subscribes to Cox's bundled service - video, high-speed data and phone - and pays about $130 a month, which is slightly higher than the average $125 monthly bill for Cox's bundled service in San Diego.

To keep customers like Scoville satisfied, Cox markets its products cautiously and strategically. For HDTV, marketing VP Reynolds lets the early adopters spread the buzz for the first few weeks. On opening day, 250 subscribers signed on the dotted line, he says. Then after the buzz wears off, Reynolds markets new products community by community.

"It's definitely a product you need to see," he says. "That's how we did high-speed Internet. It took a year and a half to roll it out. We did demonstration events in each new neighborhood as we opened up the neighborhood. We did about 20 of those, and that worked very well."