Phone Tag

In 2004, the “Where You At?” campaign distinguished Boost Mobile from other prepaid companies in the ultra-competitive wireless communications arena. Featuring hip-hop luminaries such as Ludacris, Kanye West, and The Game, these video-styled commercials promoted the brand’s walkie-talkie feature. This savvy, catchy, and engaging approach captured the imaginations and wallets of its urban audience in the coveted 18—34 demographic, with most users under the age of 26. At the time, this successful campaign was considered a no-brainer for the marketing arm of the no-contract division of parent company Sprint Nextel. In fact, Boost received “street cred” through an unexpected marketing push from the critically acclaimed HBO series The Wire. In the Baltimore-based show, Boost represented the wireless service the local crime syndicate used for drug trafficking.

Executives admit the association wasn’t the division’s finest moment. To make matters worse, Sprint would experience a tailspin a few years later due to internal restructuring and external competitive pressures. It would take the bold leadership of 20-year marketing strategist Matt Carter to dial up the winning strategy for Boost’s revenue and market share growth while positioning Sprint to dominate the prepaid market.

Recruited from his own entrepreneurial venture in 2006 to head Sprint’s customer service department as senior vice president of base management, Carter, 48, joined the telecommunications giant during a rocky period. Then-CEO Gary Forsee had overseen Sprint’s merger with Nextel in 2005 but hadn’t proven adept at managing a smooth operational transition. That same year Sprint lost more than 1 million customers; its board decided it was time for new management. In 2008, Dan Hesse, a respected leader in the wireless industry, became Sprint’s new CEO and initiated a reorganization plan that included slashing some 4,000 jobs and making several management shifts.

Carter assumed the role of Boost’s senior vice president and general manager with oversight of marketing, sales, finance, and product distribution. “I was brought in because we saw the no-contract wireless category as a significant growth opportunity, and we were not participating in that growth.” To do that Boost needed a broader customer segment. “We were a niche product in the fastest growing segment of wireless. We needed to capture the Walmart shopper. One-third of all prepaid phone service plans are sold at Walmart.”

By 2009, Carter was instated as division president with a specific mandate: Make Boost a growth engine for Sprint in the prepay segment. “Matt had previous experience in prepaid and in brand marketing, making him a great match for the job of repositioning Boost,” explains Hesse. “Because of his Sprint experience, he also understood how Boost could be unique, yet still be consistent with Sprint’s brand pillars of simplicity and value.”

Carter has initiated a three-prong strategy to turn around Boost’s competitive standing: Reposition the brand from its urban consumer target to the general market; increase distribution outlets; and change the plan offered to customers. His approach worked. He’s unveiled a new slate of celebrity endorsers including NASCAR phenom Danica Patrick to introduce Boost Unlimited, a national $50 plan minus contracts, taxes, and activation fees. By the second quarter of 2009 Sprint added 777,000 new prepaid customers.

With more than 4 million customers, Boost now reigns as the undisputed leader in the prepay category. In achieving this milestone, Carter continues to demonstrate why he is one of Sprint’s most powerful strategic weapons in the telecom industry.

Fighting Stigmas and Stiff Competition
Sprint Nextel is currently the third largest wireless provider with 49.1 million total subscribers and generates 83% of their business in that category. It trails only AT&T and Verizon——the other two major players——in subscribers. Although wireless capabilities have grown as an intrinsic part of social and professional life, the big three had to deal with quite a bit of static in the estimated $164.6 billion industry this year. William Power, senior industry analyst and CFA for Richard W. Baird & Co., predicts Sprint’s revenues will decline 7.8% in 2009. “Growth is clearly decelerating,” explains Power. “And I think the biggest driver is that we are at roughly 90% penetration in this country. While there are more and more people carrying multiple devices, it has become more difficult [to grow at the rate] this industry has in the past.”

The prepaid segment however, presented an opportunity for Boost. To make inroads in this sector, Carter first compiled data, concentrating on the needs——and frustrations——of wireless consumers. The prepay model’s greatest advantage: No contracts. Since such agreements didn’t require credit checks, however, there was a negative perception that prepay customers couldn’t qualify for contracted services. Carter says, “To overcome that you have to create a value proposition [for consumers] across all socioeconomic lines to consider that this is a smarter choice.” He also focused on status and functionality by upgrading handset selections.

Other factors included building trust with consumers and developing an affordable pricing strategy. “If you were to ask most people to rank the quality of their experience with [the telecom] industry, it ranks right up there among the worst,” he explains. “They find it riddled with deception. Your wireless bill is the one bill you open with trepidation each month. You never know what it’s going to be. You

thought you were paying $49.99 and it ends up being $60. But our plan is 50 bucks. It’s not $50 dollars plus all these other fees, so that became a differentiation for us. It gave us an opportunity to say, let’s change the paradigm. So we gave you a predictable price point.”

Boost also went a step further by extending national coverage while its biggest competitors offered local service. “The two companies that have pioneered this space in a lot of respects were Metro PCS and Leap Wireless,” explains Power. “Both of those companies have enjoyed very good subscriber growth over the past several years. Boost re-entered the space at the beginning of this year with its Boost Unlimited product and I think what has resonated is that it is a nice value proposition, particularly in tough economic times.”

Associating the brand with value helped diminish negative impressions of prepaid products. “Today people actually feel that this is a smart choice as opposed to a default choice,” maintains Carter.

CHANGING THE CULTURE
Carter lives in Irvine, California with his wife and four children——with a short, scenic commute to his informal, yet functional office. After a brief conversation with Carter, his accent quickly reveals his Boston roots. The oldest of five children, he and his siblings were raised by his father, who worked as a police officer, and mother, a factory worker. Carter’s boyhood dream was playing left-field for the Boston Red Sox but his father held scholastic-based expectations. So he decided to pursue his other passion, film, at Northwestern University. Unwilling to pay his dues, however, by working his way up from the mailroom at a Hollywood agent’s office, Carter headed back home and took an operations manager position with Raytheon. It was at the defense contractor that he soon discovered another passion–business–and found that marketing appealed to his creative streak and competitive nature. He attended Harvard Business School and upon graduating in 1988, he landed his first marketing position at Bristol-Myers Squibb as assistant product manager of Bufferin aspirin. Over the next 18 years he worked in several key global marketing positions at Coca-Cola and Bell South before joining Sprint.

By the late ’90s, he was caught up in the “gold rush” of the dot-com boom and launched AmeriTales Entertainment, his own interactive business targeted toward children. He continued to run the company with his wife, Theresa, who now has complete control of the business.

His entrepreneurial background helped him understand the business challenges that Boost struggled with as a startup division within a corporate entity. To stay competitive the division

clearly needed a disciplined operating structure in contrast with its freewheeling, laissez faire culture. The organizational maven created an accountable, results-based environment. In fact, one of the first systems he implemented was a weekly scorecard to track all elements of the unit, providing two significant benefits: making employees aware of the company’s objectives and letting them know how individual performance was being measured. “It helped change the culture overnight,” he asserts.

But many were not prepared for his deliberate, disciplined management style. He was met with resistance but acted swiftly, resulting in the dismissal of a significant member of the staff who had started the organization. As a result, some employees wore “In Memoriam” T-shirts to protest his decision. “You have to have the courage to know you’re doing the right thing,” Carter maintains. “What I learned when I spoke to leaders in other companies [is that] in the transformation of [their] companies they all say they should have acted sooner with people. At the end of the day, [employees] expect me to make the right decisions to allow them to get a paycheck every two weeks.” That act set the stage for the acceleration of his plan.

“Matt gets results,” Hesse insists. “When I came to Sprint, our No.1 problem was churn. When Matt was put in charge, we made improvements quickly. His style can perhaps best be described as ‘hard-charging.’ Matt leaves a wake behind him–and I mean that as a compliment.”

But even with a new operating structure and an inventive rebranding strategy, Carter, who this year ranked among the “Top 25 Most Powerful People in U.S. Wireless” by FierceWireless.com, still faced setbacks in the creative execution of his new “Unwronged” campaign, which was panned by media critics and confused consumers. “The ‘Unwronged’ campaign was wrapped around the creative concept of wrongs within the cell phone industry,” he explains. “We tried to position ourselves as the new sheriffs in town fixing all the wrongs in the wireless industry. We recognize that some creative executions will be off the mark, but what’s important is to recognize that [you need to] get a better solution in place as quickly as you can.” Boost, maintaining the new campaign message and slogan, has unveiled clearer creative direction with Danica Patrick.

Carter’s future goals for Boost: aggressively expand market share. In July 2009, Sprint purchased Virgin Mobile for $483 million–a strategic acquisition to dominate that segment. He also recently struck a deal with the Home Shopping Network, which has access to 90 million homes nationwide, further broadening Boost’s market reach. While Boost is currently sold in a variety of major retail outlets including Best Buy, Walmart, and Target, the goal for Boost Mobile is to build 2,700 independent retail outlets around the country.

Competition remains stiff. According to Power, major competitors have lowered prices and AT&T just released a $60 all-inclusive program. But Carter thrives on such challenges: “Developing the right strategy is not just what we have to accomplish today, but how we are setting the company up for sustainable growth five years from now. We are sowing the right seeds to set us up. That’s the model I have.”

“I was one of those people who would knock on your door on Friday [evening] with the big idea. And I realized that the big idea just stayed there. It never got any traction. It’s frustrating [to] actually visualize how something should materialize and it’s just sitting there. I got much more introspective and went back to my athletic days where you’ve got to set goals and measure your progress. It became evident to me what you do in business is very similar to what I experienced as an athlete. There are no gray areas in athletics. Did you win or did you lose? Did you score or not? It’s very much about goals and achievement.”

Matt Carter’s Leadership Lessons on Business

On Picking the Right People
“Great strategy is one thing, but you really have to have great people. When you have great people you can stimulate great thoughts. I spent a third of my time examining the talent. Who wants to be here? Who are the people who can really make a difference? It’s no different in athletics or on the playground. You pick this person because he can shoot or that person because he’s tall. It’s the same thing in business. Get the right roster in place.”

On Engaging Your Team
“I try not to create unrealistic expectations. It’s important for the team to believe they can accomplish something. That’s very important in terms of success. If they feel like a goal is out of reach, you end up losing the confidence from the team. Jack Welch (former General Electric CEO) said it best: ‘Create reality.’ I try not to create fantasy on any level in business. People want to feel like you acknowledge and value their contribution. Most people want to do a good job. That to me is an asset to the organization, and it’s my job not to mess that up.”

This article originally appeared in the December 2009 issue of Black Enterprise magazine.