When Charter Communications completed its acquisition of Time Warner Cable in 2016, the plan was to push through a massive rebranding that would quickly replace the much-maligned Time Warner Cable brand with a new, more modern brand: Spectrum. The essence of the Spectrum brand was supposed to be “better service at a better price,” all backed by much-improved customer service.
To make that a reality, Charter Communications focused on several key steps:
(1) Stripping away the Time Warner name from all billings, advertising and mailings
(2) Boosting the Internet speeds of all customers to a base level of at least 60 Mbps
(3) Reducing a confusing mix of incentives, programs, plans and offers into just a few core offerings (Select, Silver, Gold)
(4) Revamping customer service by hiring nearly 20,000 customer service representatives and bringing call centers back to the U.S.
The first leg of the rebranding launched in September 2016, with a rollout to Texas and California markets. That was followed by a rebranding in New York and Florida. Finally, the company rolled out the rebranding to the Midwest, including Ohio, Kentucky, Indiana and Wisconsin.
If this were a business school case study, it would be a textbook example of how to achieve a rebranding. Any corporate strategist would tell you that you can’t accomplish a massive national rebranding overnight, and that a staged process would make sense. And those same corporate strategist would also probably tell you that any brand needs to be easily defined in terms of a few basic principles. And here the “better service at a better price” brand offer seemed to make sense.
And, just to make sure that the rebranding efforts hit all major demographic groups, Charter Spectrum also rolled out a marketing campaign specifically targeted to Hispanic and Spanish-speaking populations in Texas and California. Again, that’s a perfectly logical step designed to maximize consumer awareness of the new brand.
So, nearly 9 months after the rebranding effort started, how has Charter Spectrum done? It’s too early to see the effect of the rebranding in terms of customer satisfaction surveys (where Time Warner typically scored extremely low), but it is possible to check out some of the chatter on branding blogs and cable TV blogs. And it’s here that it’s possible to really see how customers perceive Charter Spectrum’s rebranding.
Let’s go back to the four major components of the rebranding to see how Charter Spectrum has delivered. To see how well the rebranding has gone, we can compare what the company initially set out to achieve with what the customer response has been thus far.
#1: Stripping away the Time Warner name from all billings, advertising and mailings
From the outset, it could be expected that this move might be confusing for customers. If you’ve been a long-time Time Warner Cable customer for years, what are you going to think when you start to see cable trucks emblazoned with “Spectrum” zipping through your city? In many ways, Time Warner was always a brand that people loved to hate. As much as people complained about Time Warner, it was still a company with a long, distinguished pedigree. And it wasn’t always clear to people why the Time Warner name lived on for some cable TV content assets (like CNN), while Time Warner Cable simply disappeared.
And there was one more problem here, and one that perhaps could have been avoided. When customers had a problem, they were used to calling a certain number to complain. But when the rebranding took effect, it suddenly became difficult to figure out who to call. If you read the customer comments on blogs, one important point that emerged was that some customers were both confused and angry that their old customer service numbers simply disappeared.
But remember – Charter Spectrum was also in the process of closing down overseas call centers and moving them to the U.S. So it perhaps only made sense that the process of transitioning to new customer service call centers was perhaps harder than expected. Plus, as noted above, Charter Spectrum was in the midst of hiring 20,000 new customer service reps and teaching them a new sales script.
#2: Boosting the Internet speeds of all customers to a base level of at least 60 Mbps
This should have been a clear customer win for Charter Spectrum.It meant that some customers automatically saw their Charter Internet speeds increase overnight, all at no additional cost. In terms of customer perceptions, this should have seen an outpouring of support from disgruntled customers. They should have been praising Spectrum, right?
Not so fast. The problem is that Time Warner Cable had been quietly boosting the Internet speeds of some customers to 100 Mbps and even 300 Mbps. There were so many Time Warner cable programs and price tiers, that there were actually more customers than might have been expected who were getting faster speeds than 60 Mbps.
Moreover, they were often getting special promotional pricing for those speeds. Once those promotional periods came to an end, they suddenly found out that there would be an “activation fee” to keep those higher speeds. As some angry customers pointed out on blogs, they felt “exploited” and they were angry about paying activation speeds of up to $200 ($200!) to keep those super-fast 300 Mbps connection speeds.
#3: Reducing a confusing mix of incentives, programs, plans and offers into just a few core offerings
This, too, should have been a slam dunk win for Charter Spectrum. If you’ve ever seen all the programs, tiers and offers from Time Warner Cable, it would have made your head spin. So Charter Communications did what it thought was best – it “rationalized” all those plans into several core plans – Select, Silver and Gold. Charter thought it was making the lives of its customers easier, not harder. All of a sudden, a very complex choice about which cable TV package to choose became very simple.
But, again, theory and reality did not always go hand in hand. One big problem was that customers actually enjoyed the idea of negotiating with the cable company and feeling like they had won. When they called up and were told that legacy pricing was no longer available, and that they didn’t have as many choices, customers responded by blaming the “monopoly” pricing power of a huge cable giant. And, even worse, customer service reps were given a script to stick to. At times, there were “hidden” options not on that script and customers, indeed, wanted them.
It would be as if you walked into your corner Starbucks and your favorite drink that you’ve been ordering for months was no longer available. Your favorite barista still knew how to make it, but they weren’t allowed to give it to customers. Just imagine how your opinion about Starbucks might change after that.
#4: Revamping customer service
This was perhaps the biggest win for Charter Spectrum. Let’s face it – the customer service at Time Warner was abysmal. And part of the rebranding was meant to gloss over the fact that this was still the same company. But here Charter Spectrum really put its money on the line. Hiring 20,000 customer service reps is a big step. And the company really tried to reinvent itself as a friendly, customer-centric company.
Several branding blogs (including Brand Channel) even pointed out that Charter was redoubling its efforts in the local community. One big winner with Charter had been “Charter Our Community” and so the company intended to bring that same community spirit to regions served by Time Warner Cable. One example was a video posted on YouTube of how a California mom was able to make important home repairs, all thanks to Charter. As Charter establishes itself as a brand in these local communities, the sort of word-of-mouth buzz that’s possible from these efforts should not be underestimated.
At the end of the day, any rebranding takes time. And keep in mind – Charter is the second-largest cable company these days (trailing only Comcast) with a huge national footprint. It’s not a case of an upstart brand changing its logo and “pivoting” to a new customer segment. In the case of Charter Communications, it meant a re-thinking of every single Time Warner Cable touch point with customers, in very diverse markets. The same branding message that might go over well with customers in Los Angeles or New York might not resonate as well with customers in Ohio and Wisconsin. And any increase in price – even if it meant significantly faster speeds or better service – would be seen by customers as proof that they were being exploited.
After summer 2017, we’ll have a much better view of how the rebranding went. The multi-stage rebranding across all geographic markets will be complete, and the first customer service satisfaction ratings should start to be available. If all goes according to plan, customers will view Spectrum as a progressive, modern brand that offers crystal-clear HD picture, a fully-featured voice service, and the fastest possible Internet — all without a confusing mix of tiers, programs, offers and incentives. That will give Charter Spectrum a solid base to build out its broadband infrastructure and continue to offer its national customers the most innovative product offerings possible.