CABLE TV;CHASTISED CABLE MSOS CHOOSE SERVICE, AND SMILE;CONSUMERS UNHAPPY WITH RESPONSE, & TELCO INDUSTRY LOOMING AS COMPETITION

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Cable viewers are accustomed to unexpected service problems. But the cable industry is trying to give consumers yet another surprise: service improvements.

As cable networks have unveiled aggressive, intelligent marketing programs, multiple system operators and local companies historically have been plagued by marketing problems, especially those stemming from poor service.

"We as an industry have not done the best job of communicating our business correctly to our customers," acknowledges Lela Cocoros, VP-corporate communications for Tele-Communications Inc., the nation's largest MSO.

But the industry has been given two salient reasons to improve its customer service: research indicating high levels of customer dissatisfaction, and the impending possibility of competition from telecommunications companies.

So cable operators are learning that keeping subscribers depends as much on their own efforts-customer service, installation, repairs and maintenance, and the general quality of the signals they provide-as on the programming they carry.

The program to improve cable's customer service, sponsored by the National Cable Television Association and other industry organizations, is based on a simple promise: service will be delivered on time, or the customer will receive a credit on his next bill.

Participating local operators set their own service time windows, generally about three hours, and establish their own crediting schedule.

The idea to roll out the on-time guarantee program nationally last March was based on the success of similar efforts field-tested by Time Warner Cable of New York City and several other carriers.

"The service-guarantees program is not a campaign or promotion but the start of a new way for cable operators to approach their business," says Lenny Stern, CEO of New York-based Shepardson Stern & Kaminsky, agency for both Time Warner of New York and NCTA. The shop created advertising and collateral for both programs.

The Time Warner ad campaign, with the tagline, "We just might surprise you," played off the legendary cynicism of New Yorkers by depicting locals barely reacting to dramatic occurrences but being astonished by the timely delivery of cable service.

"It takes a hell of a lot to surprise New Yorkers" reads the headline of a print ad above a photograph showing real lions sitting on the podiums outside the New York Public Library as nonplused locals mill about beneath them.

"Consumers [in New York] were very skeptical about cable and any message that cable wanted to communicate until that perception of service was changed," says Char Beales, president-CEO of the trade group Cable Telecommunications: A Marketing Society. "Time Warner changed the way they did business to serve the consumer and offer the guarantees with some pretty clever advertising."

The NCTA program, dubbed "The Future is on Cable," was adopted by nearly all of the nation's 11,000 local cable systems, according to NCTA officials.

Support for this effort includes industry conferences, a comprehensive array of collateral materials from customizable advertising to a marketing workbook for local operator executives, and commercials from Shepardson Stern that compare operators to Federal Express and UPS.

These TV spots carry the tagline, "There's a new entry in the delivery of reliable, on-time service."

According to a study released in September by Market Facts, the public's impression of cable service is improving. It found that fewer customers have had service problems this year-43% versus 50% on average between 1990 and 1994.

Also, 14% of consumers reported trouble reaching the cable office by phone in 1995, compared with an average of 19% between 1990 and 1994.

"There are a lot of things that we and other cable companies [are now doing] to ensure that we are aggressively pursuing customer service excellence," says Ms. Cocoros.

Those figures, however, overlook a major change forthcoming in the cable business: new competition.

A telecommunications bill now in Congress would deregulate the phone and cable industries, allowing companies in each industry to carry both services.

Even though head-to-head competition between the two industries may not occur for some time, cable companies are taking the initiative to upgrade their public image.

A poll conducted last winter by Gallup Organization and USA Today found only 2% of cable subscribers would opt for phone and cable TV service from cable companies, with 17% choosing the phone company. A huge majority-74%-said they would continue to do business with separate providers.

These findings reflect the public opinion that telcos are more in tune with consumer needs than cable operators.

To counter such impressions, MSOs are actively attempting to create brand identity and awareness among consumers and communicate their commitment to customer service, reliability and technical advantages. Among recent efforts:

Cox Communications recently broke a campaign, from Bigelow & Eigel, Atlanta, with the tagline "First in reliability, service, and technology." These spots will air in Cox markets for the next six months. A major promotional program is also on the drawing board for next year.

TCI has followed two dramatic commercials, from Red Ball Tiger, San Francisco, about the value of cable in our society with a third light-hearted spot intended to forge a brand identity for the company.

Time Warner of New York is conducting a millionth-customer promotion, awarding a lifetime of free cable to that lucky subscriber.

And to continually refine their service processes, both Time Warner and Cox regularly conduct focus groups and telephone research.

"We see our competition as any company that's planning to get into the video business in the next 10 years," says Barry Rosenblum, president, Time Warner of New York. "[Our marketing approach] calls for strategic foresight and looking to the future, not saying, `let's wait until we have a strong competitor, then see what we can do."'

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