1. A PROGRAM FOR T ELCO C OMPANIES IN W ISCONSIN Arthur Middleton Hughes VP The Database Marketing Institute

2. It’s a big state. Someone has to provide the phone service for 5.5 million talkative folks.

3. L AND L INES ARE IN TROUBLE US Phone Landlines Per 100 Population US Statistical Abstract

4. C REATIVE D ESTRUCTION  Monopolies have become competitive  Cable is muscling in on phone companies  Phone companies are fighting back with TV  Both are offering the internet  Wireless is stealing from both  You have to offer many services to survive

5. C ELL P HONES T AKING O VER Annual Household Spending on Telephone Service

6. Y OU HAVE TO OFFER EVERYTHING

7. T HE EFFECT OF BUNDLING  Every additional product that you add improves loyalty and reduces churn by 25%. Adding products boosts revenue AND improves the retention rate of land line customers

8. T O KEEP SUBSCRIBERS, BUILD A M ARKETING DATABASE A database is more than a list of subscribers It is a tool to use to retain subscribers and to sell them additional products

9. M ARKETING D ATABASE FED FROM O PERATIONAL D ATABASE The Marketing Database can be outsourced to a vendor. Advantage: keep the costs down, and control what he does. This is your in house billing database

10. D ETERMINE THE LIFETIME VALUE OF YOUR SUBSCRIBERS We are looking at the career of 60,000 subscribers over a three year period. The lifetime profit from each of the 60,000 is $96.33 To beat that we have to improve something.

11. W HAT CAN WE DO TO KEEP THEM ?  Communicate with them often  Put them on automatic paper-free billing  Sell them a second product: DSL, TV

12. E FFECT OF ADDING DSL Churn rate down ARPU Up CCPU up CPGA up Revenue up Lifetime value way up.

13. DSL B OOSTS P ROFITS

14. A DDING TV: T HE TRIPLE PLAY The LTV has gone down. Why? It is expensive to add TV -- much more than to add DSL. And, the churn rate has gone up? Why? Competition from Cable and Satellite.

15. TV IS NOT A WORLD BEATER  There is more competition with TV: Cable, Satellite, and over the air.  But TV and Wireless are important ways of staying in the game and keeping your customers.  The main way to win: communicate often.

16. W HY COMMUNICATION IS VITAL  All Wisconsin Telcos have additional services to sell.  All have churn problems.  Solution: set up regular e-mail communications with all subscribers.  Use those communications to sell more services, and keep from losing the subscribers you have now.

17. E- MAILS : L OW C OST S ELLING

18. E- MAIL – VERSATILE AND INEXPENSIVE

19. F IRST STEP : A UTOMATIC B ILL P AYING “Stop by or call us” You cannot do this on line. What is the benefit to the subscriber?

20. YOU CANNOT SIGN UP ON LINE IN W ISCONSIN “Visit or call our office”

21. S EE HOW AT&T D OES A UTO B ILL P AYING

22. W HY AT&T AND V ERIZON SEND E - MAILS Automatic Bill Paying is the entry point for monthly e-mails that promote additional products. This is why they pay you $10 or $15 for signing up.

23. S UPPOSE W ISCONSIN T ELCOS USED A COOP EMAILING SERVICE  One company could provide online bill paying service application service with a link on each Telco website.  Each subscriber would get a weekly e-mail from his Telco, with local news, sports news, and what is on TV this week, plus info about Telco products.  A coop e-mail and text mail service might reach most of the households of WSTCA members with news and promotions from their local Telco.

24. E ACH T ELCO GETS THEIR OWN E - MAIL SERVICE

25. W HAT DOES IT COST TO SEND E - MAILS TO SUBSCRIBER HOMES ?  52 e-mail campaigns per year to for 20 Telcos with 6,000 subscribers per Telco.  Cost $10.00 per thousand. Cost per Telco per year – 20 companies participating, perhaps $3,120 per year for the delivery plus $12,000 per year for the part time editor.  What would be the benefits?

26. A SSUMPTIONS  Assume that 20 Telcos participate.  There are 52 e-mail campaigns per year.  There is a monthly contest for e-mail subscribers. One winner of $5,000 per month. To enter: click on an entry box in the e-mail. Nothing to buy.  Each Telco designs their own e-mails. Each has one part time editor @ $1000 per month developing e-mail copy.

27. W HAT WOULD BE IN THE E - MAILS ?  What sports, events and movies would be on TV this week – time and channel  Local results of local sports teams.  Video of local sports supplied by teams, and their supporters. Local to the Telco area.  Every opened e-mail is an automatic entry in the monthly $5,000 contest. Nothing to buy,  Ads from local merchants  Ads for Telco products

28. B ENEFITS OF THE E - MAILS  Assume each Telco has 6,000 e-mail subscribers  The open rate is 30% because of the $5,000 prize per month.  One half of one percent of the e-mails result in a sale of a Telco product (DSL or TV or PC) with an annual revenue per product of $419.40  Note, average sales due to e-mails from other companies varies from 0.5% to 3%.  Resulting sales per Telco per year $196,279

29. D ETAILS OF THE E - MAIL PROGRAM Assume a phone company with 6,000 subscribers who sign up for e-mails. Assume 20 Telcos sign up as members to send emails Assume a part time local e-mail editor who gets $1,000 per month for creating the four e-mails sent out by the Telco Over three years the e-mail marketing program could produce total profits of $362,350 per Telco

30. S ERVICES PROVIDED BY THE E - MAIL VENDOR COMPANY  Link to sign up subscribers and auto bill payers for each member Telco. Telcos do their own billing, and receive all revenue directly from subscribers.  Maintain a central database of subscribers for each Telco. Send e-mails from this database. Telcos can access DB on line and do segmentation. Use cookies so Telco websites and e-mails are personalized.  Shopping cart in e-mails so subscribers can buy services from Telcos on line.  Deliver all e-mails for the Telcos.  Provide a template to each Telco for them to enter their own content for the e-mails.

31. H OW TO GET STARTED  WSTCA enlists members in the project. Get at least 20 to sign up. Set up an e-mail corporation with each Telco an owner.  WSTCA drafts an RFP for a company to provide the services.  Selected vendor creates software for each Telco website to enlist auto bill payers, subscribers, and shopping carts to sell Telco services. Sends both e-mails and cell phone text content. Creates the monthly contest.

32. G ET THE BOOKS Arthur Middleton Hughes VP The Database Marketing Institute, Ltd. Arthur.hughes@dbmarketing.comArthur.hughes@dbmarketing.com 954 767 4558