SAN FRANCISCO (AdAge.com) -- Bill Morgan is under great pressure these days. As senior VP-corporate marketing for Sprint Nextel, he heads marketing for the No. 3 U.S. wireless carrier that, since 2005, has been mired in technical and customer-service problems.
In late 2007, Sprint's current president-CEO, Dan Hesse, was tapped to turn around the carrier that once enjoyed a solid reputation; about a year later, he appointed Mr. Morgan. Since then, Mr. Morgan, 52 -- who has served as general manager of Microsoft's Silicon Valley operations and an executive at Grey -- has been driving a brand proposition that seeks to keep subscribers while improving customer service. More than six months into his tenure, Sprint continues to see an exodus among its contract subscribers. Last quarter, Sprint lost more than a million customers, while larger rivals AT&T and Verizon Wireless scooped up millions of new subscribers.
What Mr. Morgan has on his side, however, is a boss committed to marketing as a business driver.
In early April, Sprint launched the "Now Network" campaign, from Goodby, Silverstein & Partners, which seeks to tout its wireless infrastructure as solid and robust. And it continues to hammer away at its value message, aiming to knock its rivals' pricing as uncompetitive. According to TNS Media Intelligence, Sprint spent $938 million in measured media in 2008.
Still under way is Sprint's promotion of the Palm Pre smartphone, whose June launch set a new sales record for the company. Sprint won't disclose a sales figure, but even the more bullish estimates that Sprint has sold 370,000 Pre's since the end of June still pale compared to the Apple iPhone 3G S, which sold a million units over its first weekend.
Meanwhile, the U.S. Justice Department is reportedly probing whether large wireless carriers are engaging in anti-competitive practices with exclusive handset deals such as AT&T's contract with Apple. Sprint has an exclusive deal with Palm to sell the Pre, but the agreement is expected to expire at the end of the year. Mr. Morgan declined to comment on how the company would fill the void for a Sprint-exclusive flagship smartphone after Pre exclusivity ends.
In an interview with Ad Age, Mr. Morgan defends Sprint's progress.
Ad Age: Sprint's messages haven't seemed to resonate with consumers, judging by the subscriber losses posted in the past few quarters. What's the fix?
Mr. Morgan: Building a strong brand takes commitment, perseverance and time. But our network-performance and customer-service improvement coupled with the launch of the Palm Pre and additional dual-mode 4G devices, services and markets will provide momentum for improved performance in 2009. Verizon and AT&T are trying to keep the industry in the same place it was 10 to 15 years ago -- creating all this [fear, uncertainty and doubt] about networks. Sprint is the most dependable 3G network and is trailblazing the industry with a game-changing 4G network -- we are focused on the positive and the future. In the first quarter, we again made progress in our major business areas of focus: financial stability, improving the customer experience and reinvigorating the brand. We had the largest sequential improvement in overall gross customer additions and net additions in Sprint Nextel history, reduced churn vs. the prior year, and we generated more than enough cash in this quarter alone to pay all of our 2009 debt maturities.
Ad Age: What's the strategy and value of marketing an advanced technology like 4G that's not widely available? How do you measure the ROI of that initiative?
Mr. Morgan: We intend to roll out Sprint 4G advertising as each market comes live. We want to offer folks the amazing power and productivity of 4G at every opportunity, so we will not wait until we have a complete build-out across the nation. Sprint 4G is currently available in Baltimore and is expected to be available in Portland, Las Vegas, Atlanta and other markets this summer. And in 2010 we are looking to bring on New York, Boston, Washington, Houston and the San Francisco Bay Area. We want people to experience Sprint 4G to help reinforce that Sprint is the technology innovator in wireless, in addition to being the best value.
Ad Age: What have you learned as the marketing leader of a company that's struggling to make a comeback?
Mr. Morgan: You've got to prioritize and you have to maintain that focus. It's also an ability to quickly read the market and to understand where the opportunities might lie that aren't as apparent in the category to the competitors. When you look at the "Now Network" campaign, it's very clear what we're trying to deliver there, and the early feedback is that not only do consumers understand it, it's incredibly relevant. The "Simply Everything" plan took a worry-free component and applied it so people didn't have to constantly worry about the meter running on their phone, and we really dialed up that whole value proposition. On the customer-care side, our consecutive monthly improvement in first-call resolution and customer satisfaction metrics has now extended to 15 months.
Ad Age: How have recessionary pressures affected the expectations placed upon you as CMO?
Mr. Morgan: There's definitely more pressure on everybody to ensure you're giving your customers the best value and give them a tangible reason to stay with you. We certainly feel it, but we embrace it too -- the expectation is that it's an opportunity to reinforce to your current customers why they should be staying with you, and it's an opportunity to attract new customers, and certainly the company and the shareholders are looking to us to do our job. The new "Now Network" ads build on the groundwork we've established, taking our messaging to the next level. Our network-focused ads are about differentiation. They integrate a number of new elements from our overall strategy, including results from a segmentation study that helped us better target customers, changes in our customer base as a result of economic conditions, and a desire to talk about the strength of our network in a unique, impactful way.
Ad Age: We've seen Sprint execute its biggest-ever online campaign this year. Does this portend a shift in Sprint's media mix?
Mr. Morgan: We've consistently been a leader in spend in online and digital, and all of our upfront media buy includes a core digital element. We're a technology brand and we have a clear market advantage in the data space; it's imperative we dominate the digital media space. We have continued to put an increasing emphasis in our media mix in this area. We have key passion points we look to; they include movies and properties like Nascar, NFL, business, health, gaming. We'll continue to dial up in this space.
Ad Age: How does social media play in Sprint's communications plan?
Mr. Morgan: Social media is where Sprint customers are and it is where we need to be in order to engage with them. For example, as part of the Palm Pre advertising campaign, Sprint launched a one-day takeover of Facebook and encouraged users to "gift" a virtual Palm Pre. You also saw us doing a unique venture with YouTube to promote the "Now Network." Users held up a digit from their hand and submitted this image to YouTube. These images were combined and turned into a Now clock. During the two days it ran on the YouTube home page, we had over 40,000 submissions.