I disagree with the assessment that the faltering economy will force people to pull back from $80 per month cable/sat bills. DirecTV is not targeting the people who are struggling to pay $80 per month and need to cut back. They are targeting the people who had $1000 per month entertainment expenses (theater, dining out, clubs, etc) and even if they cut back, DirecTV's $80 per month is a bargain.
The problem is that DirecTV has done a lousy job leveraging their advantage in HD and sports programming. They have significantly reduced involuntary churn by tightening credit requirements (good), but have not made any impact on voluntary churn, despite locking a much larger portion of their customer base into longer 2 year commitments.
The HD and Sports advantage is helping to get DirecTV new subscribers, and get them locked into 2 year commitments. But after those commitments are up, the customers walk away as fast as they ever have. Price alone is not the excuse for the churn. So DirecTV needs to figure out what they are doing wrong which is causing customers to want to quit. It may be that the HD is not living up to the promise or expectations. Or it may be other issues like technical problems or poor customer support.
I think DirecTV's problem is they are trying to be premium without being able to fully back up the claim. You can't pretend to be Nordstroms when you treat your customers like K-Mart.
The problem is that DirecTV has done a lousy job leveraging their advantage in HD and sports programming. They have significantly reduced involuntary churn by tightening credit requirements (good), but have not made any impact on voluntary churn, despite locking a much larger portion of their customer base into longer 2 year commitments.
The HD and Sports advantage is helping to get DirecTV new subscribers, and get them locked into 2 year commitments. But after those commitments are up, the customers walk away as fast as they ever have. Price alone is not the excuse for the churn. So DirecTV needs to figure out what they are doing wrong which is causing customers to want to quit. It may be that the HD is not living up to the promise or expectations. Or it may be other issues like technical problems or poor customer support.
I think DirecTV's problem is they are trying to be premium without being able to fully back up the claim. You can't pretend to be Nordstroms when you treat your customers like K-Mart.
Wow.....imagine that....:sure:
