Cable’s Urgent Need to Win Business Customers

By Michelle Nowak

On any given night in any market the world over, audiences can switch on their TV sets – or increasingly PCs and mobile devices – and find Jaws, one of the most popular and ubiquitously distributed movies ever made.

For many cable companies, the image of a great white shark menacing its prey may strike a little too close to home as satellite TV, telecom communications companies and new over-the-top providers vie with cable for share in the increasingly competitive video marketplace.

While cable companies continue to battle aggressively in the residential arena, and make key gains in new consumer offerings that include high-speed Internet access and VoIP, industry leaders recognize the need to diversify aggressively into new markets. One opportunity frequently cited: the business class and commercial sectors.

Cable companies have many important credentials that add luster to their portfolio in the business class and commercial arenas. In the U.S. over the last decade, the cable industry has invested more than $130 billion in advanced network infrastructure to support next-generation services. Globally, cable’s investment in new networks is a significant multiple of that figure. In the same period, many cable operators have created packages expressly designed for businesses, including metro Ethernet, private line, high-speed Internet, VoIP and other services.

Despite these efforts, cable’s bid in the commercial arena seems to move in slow motion: In the U.S., cable companies score 5 to 10 percent revenue contribution from businesses – at best – while many telecom operators pull in 35 percent of revenue from the sector. One obvious reason: Telecom companies are firmly entrenched with business customers. As comparatively new players going up against competitors with years of experience serving commercial accounts, cable providers may find that their lauded record in the consumer market means nil to a business.

So, the question is: Does cable have what it takes to grow as a significant presence in the commercial marketing, serving not just SMBs, but also midmarket and large enterprises? The answer: Yes, they do, in all areas except one that ranks high with businesses – billing. There the cable sector needs work. However, commercial customers are not happy with their billing from current service providers either. A recent survey of business customers by Convergys finds that:

• Only 36 percent rate their primary provider as effective in billing.
• Only 37 percent say their provider can bundle services.
• Just 31 percent say billing issues easily are easily resolved and 40 percent say customer service is too slow.
• 70 percent have complained about billing issues.
• 90 percent of C-level execs have complained about billing.

Because billing is a top priority in the business class and commercial arenas, the ability to deliver what business customers want most provides a major market opening for cable companies armed with sophisticated BSS solutions. So what do business customers want?

• Simplicity – Easy-to-understand invoicing. The ability to provide full detail on complex bundles of service, from any individual or network, in one master invoice.
• Hierarchical Treatment – Presenting billing across multiple geographic zones and allowing each user to define an organizational invoicing arrangement. Also includes the ability to be invoiced at the “appropriate" level, including corporate, division, local and individual.
• Convergent Billing – A consolidated invoice that re-rates as prices increase or decrease, and also has the ability to generate a statement of charges at non-invoiced locations
• Discounting – The application of discounts and sharing of minutes across the whole commercial account. All charges, including discounts, must be reflected on invoices and statements down to the service level. They also must include all devices, for example, pay-per-view discounts across not just TVs, but also wireless devices and PCs.
• Sophisticated Pricing – Bundling that is attractive to the commercial customer. At the same time, the bill must have the ability to split charges for usage by the organization versus usage by the individual.
• Rock-Solid Service Level Agreements – The flexibility to tailor and support SLAs by customer

The cable sector must move expeditiously on the commercial market opportunity. Residential subscriber revenue is no longer the sure thing of the past, and rest assured that the competition is stepping up its own market initiatives across the board – not just in the consumer sector but with business customers, too. Cable companies have the chance to seize an important window by quickly addressing commercial customers’ demands for better billing and care.

The competitive equivalent of Jaws is circling. Cable leaders know this well and understand that they must broaden their horizons to include commercial customers. How successfully they do so will hinge on their speed and resolve in embracing advanced BSS as the platform for future growth.

Michelle Nowak is the Convergys Global Head of Strategy, Solutions and Marketing for the Cable, Broadband and Satellite market vertical. She has 20+ years of experience in the technology industry and an extensive background in cable, broadband, satellite, telecommunications, enterprise software and solutions, and innovation.