Tim Doolittle, VP of marketing science at Charter Communications
Like many large companies with geographically dispersed outposts, cable company Charter Communications' 14 key marketing areas have typically handled direct mail and outbound telemarketing campaigns on a local basis.
Earlier this year, however, Charter became the first major cable operator to nationalize its print production — enabling its St. Louis headquarters to produce almost all of the firm's direct mail. According to Charter, this move was part of an overarching strategy to improve the efficiency of its direct response marketing.
“Like other telecommunications firms, Charter is experiencing a lot more competition than existed five or 10 years ago,” says Tim Doolittle, VP of marketing science at Charter. This development, combined with rising costs and the fact that the company has a fixed footprint — and therefore a finite number of households to market to — is “the backdrop for Charter's need to be more efficient and effective with its marketing efforts,” he continues.
Charter is the third-largest publicly traded cable operator in the US, serving 5.7 million customers in 29 states. However, its customer base is spread out geographically and includes few major metro areas. That makes buying mass media a challenge. “Charter relies more on direct response than other [cable operators],” Doolittle explains, adding that direct response accounts for the majority of the company's marketing spend. In fact, Charter sends out more than 150 million pieces of direct mail each year.
Partnership drives centralization
The amount of direct mail Charter drops annually has flattened somewhat, as the company has identified consumers who do not respond to mail and changed how it contacts them. But what has driven efficiency in Charter's direct mail program is a partnership with integrated marketing agency Wilen Media, which features specially designed processes and systems to maximize printing and production efficiencies, such as centralizing the production and printing of direct mail.
Previously, Charter used 20 or more printers, many of which had relationships with Charter's local offices. The company now uses only a handful of printers and most of the orders go through Wilen.
“It's clearly more efficient to work with one vendor than 100,” says Darrin Wilen, president of Wilen Media. As the ability to get to market quickly with marketing communications becomes an ever more important part of strategic competitiveness, he notes, more companies see the need to consolidate their printing and production processes.
Wilen has set up a centralized digital workspace for Charter that allows all necessary personnel to make changes to a direct mail piece. When a change has been made, everyone involved in the project receives a real-time report. “This allows us to shrink the production cycle upwards of 70% [over] time,” Wilen says.
Once a direct mail piece is completed, Wilen places it into a digital asset management system that allows Wilen to track it and run various reports. These reports let Charter ensure that in-home drop dates are met. Its call centers are then alerted that calls may start coming in. This last step “is integral to our being efficient and to maximizing the marketing budget,” Wilen says.
Wilen has helped Charter to both optimize its volume on press, driving down printing costs, and work with the US Postal Service, minimizing postage costs by efficiently getting mail from the printer into homes.
From a production standpoint, these moves have led to changes in Charter's mailer formats. “We work with printers to come up with formats that are very efficient on press and with the postal service,” says Doolittle. But Charter still has flexibility, he adds. Since implementing these changes, Charter has seen a steady reduction in its cost per piece.
Modeling increases response
At the same time that costs have gone down, response rates have risen. What's driving the increase in response rates is the application of predictive modeling, Doolittle explains, which has enabled Charter to communicate with customers using the offer they are most likely to respond to at any given time.
It is Charter's nationalization of its direct mail and outbound telemarketing efforts, however, that could have the biggest impact on the company's business going forward.
“It's very difficult to use a handful of printers and get everything on press on time when you have fifteen organizations doing campaigns,” Doolittle says. More importantly, by having the direct mail program in one central location, Charter will be better able to track the results of its campaigns. “We can implement a lot of control in the front end and be able to continue to refine tactics, which should further increase response rates,” he explains.
The nationalization program has also freed up the offices across the country to engage in more local marketing activities. “That was part of the plan,” Doolittle says, adding that allowing the test market areas to concentrate on those types of efforts in which local knowledge drives results is an important step. He points to Madison, WI, a big college town, as one example. “We have to be very innovative in the way we approach that specific customer because there is a lot of competition,” he adds.
One of Charter's goals going forward is to integrate its marketing efforts across channels, in order to “continue [refining] what channel we connect to customers through,” says Doolittle. “Getting the elephant in shape” – that is, direct mail and telemarketing, and being more efficient in these two channels — is the first step, he explains, which “will allow Charter to optimize its marketing spend across all channels.”