Charter 2005 Annual Report Download - page 22

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
MANAGEMENT OF OUR SYSTEMS SALES AND MARKETING
Many of the functions associated with our financial and Our marketing infrastructure is intended to promote interaction,
administrative management are centralized, including account- information flow and sharing of best practices between our
ing, cash management, billing, finance and acquisitions, payroll, corporate office and our field offices, which make local decisions
accounts payable and benefits administration, information system as to when and how marketing programs will be implemented.
design and support, internal audit, purchasing, customer care, In 2005, our primary strategic direction was focused on
marketing, programming contract administration and Internet eliminating aggressive promotional pricing and implementing
service, network and circuits administration. We operate with targeted marketing programs designed to offer the optimal
four divisions. Each division is supported by operational, combination of products to the most appropriate consumers to
financial, customer care, marketing and engineering functions. accelerate the growth of profitable revenues.
In 2005, we increased our targeted marketing efforts and
CUSTOMER CARE related expenditures, the long-term objective of which is to
increase revenues through deeper market penetration of all of
Our customer care centers are managed centrally by Corporate our services. Marketing expenditures increased 19% over the
Vice Presidents of Customer Care. This team oversees and year ended December 31, 2004 to $145 million for the year
administers the deployment and execution of care strategies and ended December 31, 2005. We will continue to invest in
initiatives on a company-wide basis. We have 36 customer targeted marketing efforts in 2006.
service locations, including 14 regional contact centers that serve We monitor customer perception, competition, pricing and
approximately 97% of our customers. This reflects a substantial product preferences, among other factors, to increase our
consolidation of our customer care facilities. We believe that this responsiveness to our customers. Our coordinated marketing
consolidation will continue to allow us to improve the consis- strategies include door-to-door solicitation, telemarketing, media
tency of our service delivery and customer satisfaction. advertising, e-marketing, direct mail solicitation and retail
Specifically, through this consolidation, we are now able to locations. In 2005, we increased our focus on marketing and
service our customers 24 hours a day, seven days a week and selling our services through consumer electronics retailers and
utilize technologically advanced equipment that we believe other retailers that sell televisions or cable modems.
enhances interactions with our customers through more intelli-
gent call routing, data management, and forecasting and PROGRAMMING
scheduling capabilities. We believe this consolidation also allows
us to more effectively provide our customer care specialists with General
ongoing training intended to improve complaint resolution, We believe that offering a wide variety of programming is an
equipment troubleshooting, sales of new and additional services, important factor that influences a customer’s decision to
and customer retention. subscribe to and retain our cable services. We rely on market
We believe that, despite our consolidation, we still need to research, customer demographics and local programming prefer-
make improvements in the area of customer care, and that this ences to determine channel offerings in each of our markets. We
has, in part, led to a continued loss of customers. Accordingly, obtain basic and premium programming from a number of
we have begun an internal operational improvement initiative suppliers, usually pursuant to a written contract. Our program-
aimed at helping us gain new customers and retain existing ming contracts generally continue for a fixed period of time,
customers, which is focused on customer care, among other usually from three to ten years, and are subject to negotiated
areas. We have increased our efforts to focus management renewal. Some program suppliers offer financial incentives to
attention on instilling a customer service oriented culture support the launch of a channel and/or ongoing marketing
throughout the company and to give those areas of our support. We also negotiate volume discount pricing structures.
operations increased priority of resources for staffing levels, Programming costs are usually payable each month based on
training budgets and financial incentives for employee perform- calculations performed by us and are subject to audits by the
ance in those areas. programmers.
In a further effort to better serve our customers, we have Costs
also entered into outsource partnership agreements with two Programming is usually made available to us for a license fee,
outsource providers. We believe the establishment of these which is generally paid based on the number of customers to
relationships expands our ability to achieve our service objec- whom we make such programming available. Such license fees
tives and increases our ability to support marketing activities by may include ‘‘volume’’ discounts available for higher numbers of
providing additional capacity available to support customer customers, as well as discounts for channel placement or service
inquiries. penetration. Some channels are available without cost to us for a
We also utilize our website to enhance customer care by limited period of time, after which we pay for the programming.
enabling customers to view and pay their bills online, obtain For home shopping channels, we receive a percentage of the
useful information and perform various equipment troubleshoot- revenue attributable to our customers’ purchases.
ing procedures. We also offer chat and email functionality on- Our cable programming costs have increased, in every year
line to our customers. we have operated, in excess of customary inflationary and
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