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Providers Vie for [email protected] Customers

Competing cable and DSL providers are scrambling to grab [email protected] broadband customers who lost their high-speed Internet service earlier this month with direct mail campaigns and special offers on their Web sites.

A U.S. bankruptcy judge in San Francisco allowed [email protected] to break off relationships with its cable and telecom partners on Dec. 1. While [email protected] subscribers serviced through Cox Communications, Comcast and other broadband providers experienced no service interruptions because an agreement was reached, 500,000 subscribers through AT&T Broadband were cut off when [email protected] and AT&T Broadband could not reach an agreement.

Though AT&T Broadband promised that its [email protected] users nationwide would regain service within a few days, many [email protected] users began looking for another service, especially after [email protected] announced it would shut down by Feb. 28.

“We've definitely seen a spike in signups and call volume since the problems with [email protected] People are afraid that they'll lose all Internet access,” said Brian Kovalesky, spokesman at EarthLink, which offers high-speed DSL and cable access in addition to nationwide dial-up service.

EarthLink has launched a “3 for 1” promotion aimed at [email protected] customers. On the EarthLink.com home page, [email protected] customers are urged to sign up for three months of DSL for the price of one. Kovalesky would not release results.

Other telecom and DSL firms are getting into the act.

Connecticut Telephone, Hartford, CT, said it would waive its high-speed Internet installation fee, a $149 value, for former [email protected] customers.

“We put an offer together specifically for @Home folks, and we're trying to give these orders priority processing,” said David Epstein, CEO of Connecticut Telephone. “It addresses some of the headaches people have had with broadband.”

The offer is included in newspaper ads and direct mail postcards that dropped Dec. 10. Using in-house and Dun & Bradstreet lists, Connecticut Telephone sent thousands of cards to densely populated areas of Connecticut. In the mailing, Connecticut Telephone stressed its stability, alluding to [email protected]'s financial problems and service interruptions.

“We're focusing on our history and stability in the space,” Epstein said.

Connecticut Telephone is still on the lookout for lists of small and medium-size businesses, its primary target customer.

Covad Communications, Santa Clara, CA, wasted no time in pursuing [email protected] customers. On Dec. 1, it offered free installation and equipment for [email protected] customers who wanted to switch to Covad's DSL service. It also said customers could have access to dial-up services while waiting for the DSL line to be installed.

Covad is offering a rebate of the $225 installation charge and monthly rates starting at $49. It is publicizing the offer on the front page of its Web site, Covad.com, and one of its wholesalers, Speakeasy.net, is running banner ads.

SBC Communications, San Antonio, is spending “millions of dollars” in a two-week radio and print campaign launched the week of Dec. 3 to “make sure [email protected] customers are aware of us,” said Joe Izbrand, spokesman at SBC. The company is targeting 16 of its major markets, including Los Angeles, Houston and Chicago.

SBC is stressing its reliability and that it works with 600 independent Internet service providers; customers of cable modem providers are usually dependent on one company.

SBC is not using direct mail or Internet marketing to promote the offer.

Though New Edge Networks in Vancouver, WA, started a direct mail campaign in October, it recently began publicizing the offer of a $500 rebate on its DSL installation to [email protected] customers.

“We were getting so many calls from [[email protected]] customers looking for alternatives,” said Sal Cinquegrani, executive director of New Edge Networks.

“Losing broadband service is not only incredibly inconvenient, it can also mean a serious loss of productivity and business for customers who work from home,” said Dan Moffat, president/CEO of New Edge Networks.

New Edge capitalized on its direct mail effort already under way, four drops of 10,000 each from October through December. The envelope contained a three-panel brochure about the company and its service, along with a letter from Moffat with a perforated mail-in rebate slip at the bottom of the letter.

Though New Edge executives had debated sending the mailing given the anthrax scares, Cinquegrani said the professional appearance of the piece put potential customers at ease. “Our mailing was professionally done, and we put it in an envelope that had our company logo,” he said. “It eliminated any questions in people's minds, and we haven't received any complaints.”

New Edge purchased lists from Dun & Bradstreet for the drops, targeting small businesses with two to 10 employees in selected markets.

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