Q&A: Boost VP Talks About Its Multi-based Strategy
As a member of Sprint's corporate family, Boost Mobile has worked hard over the past three years to carve out a strong brand name in an increasingly confusing telecommunications space.
In 2009, the company launched an advertising campaign that depicted grotesque amalgamations (a woman with unnaturally long armpit hair, for instance) to highlight the "wrongs" of its competitors. Last year, the company began a program that awarded customer loyalty, shrinking bills for each six months of continued service. Earlier this year, Boost began a campaign that told consumers it was listening to gripes about the industry and was working to solve them. (One television commercial depicted a man surrounded by puppets, wondering why he couldn't get an "adult phone" from a no-contract carrier.)
Something must be working; in April, Boost topped the list of prepaid companies in a recent J.D. Powers' survey for customer satisfaction. Boost Vice President Andre Smith spoke with Marketing Daily about the company, its prospects and the industry as a whole.
Q: Where does Boost fit in relation to the greater wireless industry?
A:Big changes are happening in the wireless industry, specifically in the no-contract space, which we see as a growth space. The Boost brand is at the right time in the right market. It's become an industry growth area. The market is starting to segment into three different groups, where it had previously been prepaid and low-credit.
Q: It does seem that the stigma of a no-contract wireless plan seems to be fading.
A:It hasn't fully gone away, and I think that's where conversations like this will really start to make a difference. The vast majority of people are in contracts, and they're going to wake up and say, why wouldn't I choose Boost? It's a great plan [that includes] unlimited talk and texting for $50. It's got the stamp of approval from J.D. Power and it's got great devices. People are going to start saying, why wouldn't I want all that for $50?
The key is how do we drive more consideration. One reason why people don't consider us is because they just don't know enough about us. The opportunity for us is to really leverage a consistent message or theme in a way that drives more relevance to our target segment.
Q: So how do you do that? You have advertising, and you've gone from "unwronged" which was attention-getting, but wasn't really about consideration, through the "shrinkage" idea, and now you're at this place where you say "We're listening to customers." It's a cluttered market, there's all sorts of advertising and noise around the wireless industry. And there's a lot of consumer inertia where people don't want to change carriers. How do you go about breaking through?
A:I think, first, it's to speak the truth of the dynamics of the market. In the no-contract space -- and I refer to us as no-contract vs. prepaid -- you've got three groups. You've got pay by the minute. You've got what we would call the capped monthly plans. Virgin Mobile is a great example, where it's a monthly plan, but you're capped at how many voice minutes or data minutes you can use. And then there's a third element, that's fully unlimited monthly. For us, that's the sweet spot. Across our pre-paid strategy, we've got Boost in the no-contract, unlimited monthly space, we've got Virgin in the capped monthly space, and we have other elements for pay by the minute.
A: The consideration is really trying to stay consistent. "Unwronged" was a great way to get attention, and $50 is an iconic price point. We plan to own that space. It's a natural. It's $50, no hidden fees, no overages, no taxes. "Be Heard" is flipping Unwronged around. It's calling out the wrongs of the industry, but showing what we can do. We're the only carrier that can say the longer you stay, the less you pay. That's a profound statement. It's the way it should be. We're going to continue to stay simple and focused on our iconic price point and continue to add value to really drive home the message
Q: You say you're the only ones who offer the shrinkage and reward you for loyalty. There tends to be a lot of "me too-ism" in the wireless industry. As soon as one carrier sets a new pricing plan or initiative, the others follow suit. Why has that not happened with the "shrinkage" idea?
A: I don't know. That's the key point. For us it's not as big a leap of faith because it's part of our DNA to be an advocate for our customers. But it is a leap of faith to deliver things without complexity and what our target customers want. One of the reasons our customers come to us is price value.
Q: How do you fit within the structure of Sprint, with Sprint trying to get contracts, and Virgin Mobile offering other no-contract plans?
A: With a multi-brand strategy there's bound to be some overlap. The key is to be cognizant of that, but also know how your customer segments are distinctly different. I would say the customer drawn to Virgin Mobile is uniquely different. They're really about texting first and talk second. And that's how they offer their plans. Ours is more talk-centric. We focus on value first. Sprint is the group that is very much about product innovation. It's a multi-brand strategy that seems to be working well, that allows us to go after the entire population.
Q: Since you have access to Sprint's 4G network, will you start offering those phones?
A: It's something we monitor very closely to see when is the right time to make that move. I don't think that particular time is now for our target customer. I think 4G is defined very differently by different carriers, and I think there's a little bit of confusion out there among people who have a 4G product. I think my customers would know that 4G is a bigger number than 3G, but that's about the extent of it. I think what you'll find is that Boost will launch at the right time, when it matters to our target audience.