A PROGRAM FOR T ELCO
C OMPANIES IN W ISCONSIN
It’s a big state.
to provide the
for 5.5 million
L AND L INES ARE IN TROUBLE
US Phone Landlines
Per 100 Population
US Statistical Abstract
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
C ELL P HONES TAKING O VER
Y OU HAVE TO OFFER EVERYTHING
T HE EFFECT OF BUNDLING
Every additional product that you add improves
loyalty and reduces churn by 25%.
of land line
TO KEEP SUBSCRIBERS , BUILD
A M ARKETING DATABASE
A database is
more than a list
It is a tool to use
to sell them
M ARKETING D ATABASE FED
FROM O PERATIONAL D ATABASE
This is your in house Model RFM &
can be billing database Scores Lifetime Value
to a vendor.
Advantage: Database Database
costs down, Sales, shipments, payments
General Promotions Surveys &
what he Transactions
Ledger & Responses Preferences
D ETERMINE THE LIFETIME
VALUE OF YOUR SUBSCRIBERS
We are looking Land Line Customer Year Year Year
at the career of 1 2 3
60,000 Customers 60,000 54,600 49,817
subscribers over Churn Rate 0.75% 0.73% 0.71%
a three year Retention Rate 91.0% 91.2% 91.5%
ARPU $41.00 $41.50 $42.00
Revenue $29,520,000 $27,190,800 $25,107,788
The lifetime CCPU - Cash Cost per User $18,720,000 $17,035,200 $15,542,916
profit from each CPGA - Cost per gross add $9,000,000
of the 60,000 is Total Cost $27,720,000 $17,035,200 $15,542,916
Gross Profit $1,800,000 $10,155,600 $9,564,872
To beat that we Discount Rate 1.00 1.11 1.15
have to improve Net Present Value Profit $1,800,000 $9,149,189 $8,317,280
something. Cumulative NPV Profit $1,800,000 $10,949,189 $19,266,469
Lifetime Value $9.00 $54.75 $96.33
W HAT CAN WE DO TO KEEP
with them often
Put them on
Sell them a
E FFECT OF ADDING DSL
Land Line Customer Year Year Year
With Broadband 1 2 3
Customers 60,000 54,960 50,475
Churn rate down Churn Rate 0.70% 0.68% 0.66%
ARPU Up Retention Rate 91.6% 91.8% 92.1%
ARPU $76.00 $76.50 $80.00
CCPU up Revenue $54,720,000 $50,453,280 $48,456,253
CCPU - Cash Cost per User $33,120,000 $30,337,920 $27,862,346
CPGA - Cost per gross add $15,000,000
Total Cost $48,120,000 $30,337,920 $27,862,346
Lifetime value Gross Profit $6,600,000 $20,115,360 $20,593,908
way up. Discount Rate 1.00 1.11 1.15
Net Present Value Profit $6,600,000 $18,121,946 $17,907,746
Cumulative NPV Profit $6,600,000 $24,721,946 $42,629,692
Lifetime Value $33.00 $123.61 $213.15
DSL B OOSTS P ROFITS
Land Line Customer Year Year Year
1 2 3
Without DSL $9.00 $54.75 $96.33
With DSL $33.00 $123.61 $213.15
Increase $24.00 $68.86 $116.82
With 60,000 Subscribers $1,440,000 $4,131,827 $7,008,967
A DDING TV:
T HE TRIPLE PLAY
The LTV has Land Line Customer Year Year Year
gone down. Broadband & TV 1 2 3
Why? Customers 60,000 52,080 45,518
Churn Rate 1.10% 1.05% 1.00%
It is expensive Retention Rate 86.8% 87.4% 88.0%
to add TV -- ARPU $131 $141 $151
Revenue $94,320,000 $88,119,360 $82,478,471
than to add
CCPU - Cash Cost per User $58,320,000 $50,621,760 $44,243,418
CPGA - Cost per gross add $72,000,000
Total Cost $130,320,000 $50,621,760 $44,243,418
And, the churn
rate has gone Gross Profit ($36,000,000) $37,497,600 $38,235,053
up? Why? Discount Rate 1.00 1.11 1.15
Competition Net Present Value Profit ($36,000,000) $33,781,622 $33,247,872
from Cable and Cumulative NPV Profit ($36,000,000) ($2,218,378) $31,029,494
Satellite. Lifetime Value ($180.00) ($11.09) $155.15
TV IS NOT A WORLD BEATER
Land Line Customer Year Year Year
1 2 3
With Landline Only $9.00 $54.75 $96.33
With DSL and TV ($180.00) ($11.09) $155.15
Increase ($189.00) ($65.84) $58.82
With 60,000 Subscribers ($11,340,000) ($3,950,270) $3,528,907
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.
W HY COMMUNICATION IS
All Wisconsin Telcos have additional services to
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
E- MAILS : L OW C OST S ELLING
E- MAIL – VERSATILE AND
F IRST STEP :
A UTOMATIC B ILL PAYING
or call us”
You cannot do
this on line.
What is the
benefit to the
YOU CANNOT SIGN UP
ON LINE IN W ISCONSIN
S EE HOW AT&T
D OES A UTO B ILL PAYING
W HY AT&T AND V ERIZON
SEND E - MAILS
Paying is the
entry point for
This is why they
pay you $10 or
$15 for signing
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
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
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.
E ACH T ELCO GETS THEIR
OWN E - MAIL SERVICE
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?
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.
W HAT WOULD BE IN THE E -
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
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
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
D ETAILS OF THE E - MAIL
Assume a phone company with
Open Rate 30%
6,000 subscribers who sign up for
Opened E-mails 93,600 e-mails.
Sales per opened e-mail 0.50%
Saes per year 468 Assume 20 Telcos sign up as
Revenue per sale $419.40 members to send emails
Annual Revenue New Sales $196,279
Annual Profit @ 40% $78,512 Assume a part time local e-mail
Cost per thousand e-mails $10 editor who gets $1,000 per month
E-mail Delivery Cost per Year $3,120 for creating the four e-mails sent
Part time e-mail creator / year $12,000
out by the Telco
Share of $5,000 prizes $3,000
Total Cost $18,120
First Year Profit after costs $60,392
Over three years the e-mail
Three year profit from year 1 $181,175 marketing program could produce
Two year profit from Year 2 $120,783 total profits of $362,350 per Telco
One Year Profit from Year 3 $60,392
Total three year profit $362,350
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
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.
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
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.
G ET THE BOOKS
Arthur.email@example.com 954 767 4558