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June 2007
Bundling Solutions
By Susanne B. Deitzel

     The very nature of a technology company is evolutionary. It involves a delicate balance between scientific innovation, tense competition, and traditional business practices to assure quality products and customer service.

No one knows this better than Time Warner Cable’s Charlotte Division. Franchised in the early 1970s, the division grew through repeated acquisitions and is now more than 448,000 customers strong and climbing. It boasts a subscriber base growing at a rate of around 24,000 a year.

     Michael Munley, the division’s new president as of August 2006, explains this growth in comparison to other markets he has been involved with in his 25 years at Time Warner: “I spent 20 years previously in the Syracuse, N.Y., market, and three years prior to coming to Charlotte in Minneapolis, Minn. I don’t think that we added in ten years the amount of new customers we see each year in Charlotte.”

     Many folks would agree that the challenges that come with this kind of growth are a ‘problem of privilege.’ For the past several years, Time Warner Cable’s Charlotte Division has been beset with resultant issues involving customer service and their customers ability to reach customer service representatives and be serviced in a timely manner.

     That is precisely why Munley was called in to take stock of the situation and implement initiatives to bring new focus on the customer experience. He makes no bones about the problems he encountered when he arrived. However, it is clear he has a firm grasp on the plan that is leading the company of 1,300 employees toward his vision.

According to Munley, “My goal is for the Charlotte division to become a technological and customer service showcase for Time Warner Cable nationwide.”

A Jump Start

     In the 10 months since he came on board, Munley’s plans have already yielded positive results. The company began a $50 million upgrade of its network, which is scheduled to cover 2,000 miles of cable this year, and 2,000 miles of cable in 2008. “This will bring fiber closer to the home, increasing capacity and facilitating the delivery of more services in the near future,” explains Munley.

     The last major cable upfit was 12 years ago, when the Charlotte division was one of the first in the country to receive resources of this magnitude. As a result, though, they have had to sit back while the rest of the country catches up. Now it is time, once again, for the Charlotte region to become the leader in faster, easier, more comprehensive and more integrated products and services.

     The Charlotte division is a big market which gives it leverage, but it also benefits from the proximity of a Time Warner Cable Corporate office two miles down the street from its Arrowood Operations office. Explains Munley, “Here, 700 additional employees provide back office services and an advanced technology group with labs, engineers and strategic thinkers that help us test and move products and enhancements out into our market quickly and first.”

     Some of the changes will be more transparent to the customer, but no less important. “Our changes are increasing Internet speed, and reducing the incidences of cable outages in the case of weather or accident emergencies. We are in the process of installing battery backup power to many parts of our plant. (Many readers might ask, ‘Why do I need cable if I don’t have power?’ The answer is that cable grids and power grids are different; before the backups, a power outage in an adjacent power grid could impact the cable of a home that wasn’t itself affected by the power outage. Now, that scenario is eradicated.)

     In addition to speed and reliability, the changes will also add services to Time Warner Cable’s offerings. The company is testing a ‘Start Over’ service that allows the customer to restart a show that they missed the beginning of, and are also testing Caller ID via the cable connection on the television screen for their digital phone service.

     Some people might think these additions aren’t quite as sexy as a few of the quantum leaps we have made in technology over the past decade. And if that is true, then it is probably good that they aren’t in the cable business. Comments Munley, “It is simple ideas like these that can make a big difference in a customer’s lifestyle. That is what we are focusing on. We have come to appreciate the individual consumer.”

     If the DVR is any indication, it appears that rather than devising flashy new products, Time Warner uses technology to make improvements for the customer that simplify life and make it more enjoyable. It is a good sign when one of your products becomes a verb: “Did you DVR it?”

     The cable company most recently made news when it began offering digital phone service and bundling it in a package with its digital cable and high speed data Roadrunner service. Munley says they are also branching out into the wireless community. With this service, DVRs could be programmed from work after watercooler talk about a particular show, or a call received at home could flash up as an instant message at work. Again, these may appear seemingly modest ideas, but before we know it, we see that these subtle changes help shape the way we live.

 

Strengthening the Signal

     In assuming his new position, the real challenges Munley faced had relatively little to do with technology. He recalls, “My first day, I left the office and had set my priorities.”

     The most immediate issue was customer service. In his three years in Minneapolis Munley had raised that division’s rankings from the cellar to the top five nationally. It is clear that Munley is the guy for the job. Speaking with him, his authority and clarity make it easy to see why — he understands leadership.

     Comments Munley “Leadership, particularly in the call center, was an area that had not had the focus it should. When you have a customer-focused business, that’s a problem.” Munley brought in Mike Smith from Albany to serve as his vice president of customer service because, as Munley says, “He ran the top call center in the county for five consecutive years; he knows how to do it.”

     Results don’t lie. On a recent Monday, typically a heavier call day, 90 percent of the incoming calls received personal attention from a representative within 30 seconds.

     Munley says that they have taken steps not only to get calls answered once they come to the center, but to circumvent the need for them with increased and improved customer communication. “We try to do all our upgrades between 2 a.m. and 6 a.m. to reduce the inconvenience to the customer. We also make calls to customers when there is an expected outage, and send postcards when there is work scheduled on part of the grid.”

     But Munley attributes the huge improvements primarily to finding the right people. “We spend a lot of time recruiting, hiring and training good people to serve our customers. We are very thoughtful about designing our leadership. And we try very hard to keep our employees happy.”

    Vice President of Public Relations Sue Breckenridge says that Munley’s message was clear from the first day he addressed the company. “He told everyone that his job was to take care of the employee, and that our job was to take care of the customer. Since Mike arrived, we have seen consistent demonstration of his sincerity.”

     Breckenridge cites several new practices that have been designed to bring more fun and community involvement options to the employees. Time Warner Cable hosts an annual family picnic and employee ‘fun days’ throughout the year; conducts outreach and volunteer initiatives including Hands Helping Heroes, JDRF and United Way fund drives, and tutoring programs; and has increased communication and participation opportunities among employees by appointing department ambassadors, increasing employee meetings, and producing company newsletters.

     “If the customer is happy, and the employees are happy, then everything else falls into place. So it is my priority to make sure that those two elements are solid,” sums Munley.

 

Lengthening the Cord

     There have been a few news-breaking distractions, however.

Last August, Time Warner Cable with partner, Comcast, purchased 5 million subscribers from struggling Adelphia Communications for $17.6 billion. A group of local municipalities in northern Mecklenburg County and southern Iredell Counties including Cornelius, Davidson, Huntersville, Mooresville and Troutman have been exploring a right of first refusal and began considering purchasing and operating the cable system in their communities. The towns suggest that operating their own systems could yield economic development opportunities but Munley says his experience has taught him otherwise.

    “Despite how it may look from the outside, running a cable company is an extremely complicated business. Constant evolution and heavy competition are the biggest challenges. We have to think and act quickly, and historically, government just doesn’t do things that way.” Adds Munley, “We have seen several initiatives like this end up reselling back to the cable company because of difficulties.”

     As of mid-May, Huntersville had pulled out of the consortium, with the remaining municipalities still officially ‘in the game.’ Munley said that, in the meantime, in the communities where franchises were transferred to the company, Time Warner continues to upgrade the region’s plant and will continue to do so until a resolution is reached. “Regardless of how this plays out, our aim is to continue serving and improving things for our customers.”

     Through this process, the company has added Statesville, Harmony and unincorporated Iredell County to its customer area, expanded the reach of its Channel 14 24-hour news further north, and continues to expand and enrich its product offerings while also offering new ways of using and paying for the services together. ‘Bundling,’ or packaging several digital services into a customer unit has been very effective for Time Warner Cable. Of Time Warner Cable’s 14.7 million subscribers, 6.5 subscribe to two or more products, and 1.7 subscribe to all three products.

    “Our customers say that bundling is very convenient and efficient for them, and we expect those numbers to strengthen even more,” says Munley.

     Other numbers to keep an eye on? Munley says he will continue to add staff in customer service, which so far has a net gain of 55 employees. He will lead the center in an expensive technology overhaul to improve the interaction between customer service representatives and customers. He will continue to challenge his team to take advantage of the remarkable amount of home businesses by working with developers and builders and to win over customers with new products and a customer-focused philosophy. With this he hopes to continue to ward off the satellite companies and new entrants to bring the Charlotte division of Time Warner Cable into the winner’s circle.

    Munley’s is a bold, integrated approach that leverages his company’s technological and financial strength with a steadfast resolve to anticipating and addressing subscriber needs customer by customer.
    
With Munley’s guidance, Time Warner Cable’s Charlotte division clearly sees the big picture—pixel by pixel.

Susanne Deitzel is a Charlotte-based freelance writer.
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