We use demographic "cluster codes" to address specific messages to target
audiences through direct mail and telemarketing. Cluster codes identify
customers by marketing type, such as young professionals, retirees or families.
In addition, we promote our services on radio, in local newspapers and by
door-to-door selling. In many of our systems, we offer discounts to customers
who purchase multiple premium services such as Home Box Office or Showtime. We
also have a coordinated strategy for retaining customers that includes televised
retention advertising to reinforce the link between quality service and the
Charter brand name and to encourage customers to purchase higher service levels.
We have begun to implement our marketing programs in all of the systems we have
EMPHASIZE LOCAL MANAGEMENT AUTONOMY WHILE PROVIDING REGIONAL AND CORPORATE
SUPPORT AND CENTRALIZED FINANCIAL CONTROLS. Our local cable systems are
organized into seven operating regions. A regional management team oversees
local system operations in each region. We believe that a strong management
presence at the local system level:
- improves our customer service;
- increases our ability to respond to customer needs and programming
- reduces the need for a large centralized corporate staff;
- fosters good relations with local governmental authorities; and
- strengthens community relations.
Our regional management teams work closely with both local managers and
senior management in our corporate office to develop budgets and coordinate
marketing, programming, purchasing and engineering activities. Our centralized
financial management enables us to set financial and operating benchmarks and
monitor them on an ongoing basis. In order to attract and retain high quality
managers at the local and regional operating levels, we provide a high degree of
operational autonomy and accountability and cash and equity-based compensation.
Charter Communications Holding Company has adopted a plan to distribute to
employees and consultants, including members of corporate management and to key
regional and system-level management personnel equity-based incentive
compensation based on the equity value of Charter Communications Holding Company
on a fully-diluted basis.
CONCENTRATE OUR SYSTEMS IN TIGHTER GEOGRAPHICAL CLUSTERS. To improve
operating margins and increase operating efficiencies, we seek to improve the
geographic clustering of our cable systems by selectively swapping our cable
systems for systems of other cable operators or acquiring systems in close
proximity to our systems. We believe that by concentrating our systems in
clusters, we will be able to generate higher growth in revenues and operating
cash flow. Clustering enable us to improve operating efficiencies by
consolidating headends and spread fixed costs over a larger subscriber base.
Our primary criterion in considering acquisition and swapping opportunities
is the financial return that we expect to ultimately realize. We consider each
acquisition in the context of our overall existing and planned operations,
focusing particularly on the impact on our size and scope and the ability to
reinforce our clustering strategy, either directly or through future swaps or
acquisitions. Other specific factors we consider in acquiring a cable system
- demographic profile of the market as well as the number of homes passed
and customers within the system;