Sprint CEO Says 'Very Aggressive' Advertising On Its Way
Sprint is still stuck in a hole, but it is planning to dig out with advertising.
On Monday, the third-place U.S. wireless carrier reported its second quarter earnings, which fell short of expectations and sent its stock tumbling. Afterwards, on a call with investors, CEO Marcelo Claure laid out the case for "the new Sprint" -- one that centers on a revamped marketing agenda.
"American consumers love their phones, but they have little love for the carriers," he said. "Part of the reason for this is the way the industry communicates with customers. Marketing and advertising are overly complicated and create ... confusion with customers."
"We're going to change that with the new Sprint," he continued. "As we offer the best value in wireless, we're going to offer consumers three things: value, clarity and simplicity."
Since his appointment in August, Mr. Claure has been busy. He promptly ditched the carrier's new 'Framily' offering -- and its accompanying ad campaign -- replacing it with a new Family data plan and a slew of pricing promotions. Mr. Claure also launched an ad agency review.
The agency review is still ongoing. Dave Mellin, a Sprint spokesman, said the simplified messaging in the carrier's marketing will continue but declined to comment on the agency review.
On the call, Mr. Claure admitted that "consumers were a little confused by our Framily offering." That ad campaign featured a multi-species, oddball family.
Starting with its recent iPhone offering, Sprint has ramped up its discounts, including its unlimited data and family plans. T-Mobile, Verizon and AT&T have followed suit with rapid-fire promotions.
Last week, Sprint appointed a Softbank executive, Junichi Miyakawa, to lead its LTE network expansion. Mr. Claure said his company will roll out the technology in select markets in 2015, another reason for an advertising push. "This approach will allow us to begin marketing the network experience in those markets sooner," he said.
Mr. Claure voiced frustration that as his bigger foes "spent billions of dollars advertising," consumers remain unaware of Sprint's offering. "[Most] consumers don't know what a great value is, so you're going to see us be very aggressive in terms of advertising," he told investors.
In 2013, Sprint spent $1.6 billion in U.S. advertising, according to the Ad Age DataCenter. Both AT&T and Verizon outspent Sprint at $3.3 billion and $2.4 billion, respectively; T-Mobile, at $1.1 billion, spent less.
During the second quarter, Sprint reported an operating loss of $192 million amid a lengthy network overhaul. Another 500,000 customers deserted the carrier during the three months, marking its eleventh straight quarter of losing customers.
Sprint also announced it was eliminating 2,000 positions from the company, a move that it said would save $400 million annually. The company did not provide further detail on the layoffs.