The Big 3 carriers still are focusing their marketing strategies on consumer discount programs, amid the expected entry of the regional Bells into the long-distance market and growth in non-voice communications and mobile services.
In the past two weeks, Sprint, MCI Communications Corp. and AT&T have each launched campaigns that spin new savings from already existing discount plans: Sprint Sense Cash Back. MCI Friends & Family Automatic Circle Savings. AT&T True Reach Savings.
Sprint's longtime spokeswoman Candice Bergen asks consumers if they could use "a little extra cash," in a broadcast TV campaign that broke Aug. 28 from J. Walter Thompson USA, San Francisco. The ad promotes Sprint's 10% cash rebate offer on Sprint Sense customers' annual long-distance bills.
Sprint Sense, with about 1 million customers, provides a flat long-distance rate of 10 cents per minute in off-peak hours and 22 cents during peak hours.
"We've taken an initial step to simplify long-distance rates and give customers an incentive to stay with us," said Tom Weigman, president of consumer services. Last year alone, almost 17% of U.S. households, or 16.1 million, changed carriers.
"The churn factor is a huge industrywide problem," said Fred Voit, an analyst with the Yankee Group, Boston. "The constant advertising and promotions have had a lot to do with that, but so do other efforts like telemarketing and direct mail."
AT&T has about 68.5% of the $32 billion consumer long-distance market, according to Yankee Group. MCI has close to 19% and Sprint a little more than 8%.
In 1994, however, 67% of consumer households didn't subscribe to any kind of calling plan, 3 percentage points more than those who subscribed in 1993.
MCI and agency Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, tapped Whoopi Goldberg for its broadcast campaign that broke Sept. 1 for the new Automatic Circle Savings program that lets MCI customers save without having to provide names for calling circles.
"We are trying to bring entertainment back into this category that's seen a lot of battling," said William Pate, director of advertising for MCI consumer markets. Ms. Goldberg is only the first of many celebrities MCI plans to use in this campaign, he said.
AT&T's latest True Reach Savings effort from FCB/Leber Katz Partners, New York, broke in national newspapers and network TV on Aug. 21.
Of the Big 3, AT&T's plan is probably closest to what consumers are likely to see more of in the future: savings across the board in a bundling of services. True Reach Savings, another spinoff of its True campaign begun in late 1993, discounts all types of AT&T domestic, long-distance, cellular, directory assistance, personal 500 and conference calls.
"We are focusing on total value that consumers can get from AT&T," said Dick Martin, AT&T's VP-corporate advertising. "There are many ways to win loyalty, and price is only one of them."
Although one-stop shopping in the communications industry is still a ways off, analysts predict that'll be how communications companies will be marketing themselves.
"We're still about a year from total deregulation and the development of technology necessary for integrating all types of communications," Mr. Voit said. "But once all that's in place, the marketing of bundled services will be the plan for most carriers."