Management style kept company focused.
When Matt Carter took the reigns at Boost Mobile, things were looking grim. The prepaid carrier’s net adds had begun to slow in 2007. By the next year, the carrier began to hemorrhage customers, losing 338,000 subscribers by the time Carter came in to help.
Boost Mobile was in a difficult spot. Customers were defecting in large numbers and it was facing heavy competition from the likes of TracFone, MetroPCS Communications and Leap Wireless International. Its relationship with its channel partnerships had eroded, Wall Street was questioning the viability of the brand and the company had lost some key leadership spots.
MAKING A COMEBACK
Carter was tasked with the job of getting the company back on its feet. Carter calls the first six months he was on the job “hairy” as he worked to get the right strategy, organizational structure and device ecosystem together. “We expected success and a quick turn-around but we had to deal with reality,” he says. “There were a lot of things that were working against us.”
Jeff Auman, Boost’s vice president of sales and distribution, says those months were like changing fan blades while the motor was still running. The company had to reach out to channel partners that had lost confidence in the brand and ask for their patience, feedback and support. “We had to ask for their trust, because we were talking about what we were going to do, not what we were doing at the time,” Auman says. “It was very difficult.”
Boost lost 643,000 customers over that sixmonth period as it worked to expand its handset lineup and sculpt its brand to appeal to a wider audience. Boost brought in resale partners frequently to get candid feedback on its business strategy.
Carter set Jan. 1, 2009, as the launch date for the revitalized company. Boost launched its $50 all-inclusive unlimited plan two weeks later. It was the first to include all fees and taxes in the monthly service charge and had a profoundly disruptive effect on the wireless industry that sparked an all-out prepaid price war.
Carter said the secret to the success of the $50 plan was not just price; it was the plan’s overall value to the consumer. “People were frustrated with all the fees and all the taxes. We believed an all-inclusive plan would appeal to a broader segment of the population,” he says. “We did not go out there and look at price as one dimension, we looked at total value.”
Carter says the all-inclusive plan worked not just because of the price but because it presented a good overall deal to consumers. “It’s about getting the right value for what you’re paying for – the right handset, the right brand, the right customer service,” he says. “We never positioned ourselves as the price-discount-type of brand.”
Boost added 674,000 customers during the first quarter the plan was in effect. By the end of 2009, the company had grown its subscriber base to 6.38 million, excluding customers added by Sprint’s acquisitions of Virgin Mobile and affiliate carrier iPCS. In addition, the carrier’s churn dropped to an all-time low of 5.56 percent by the time Carter left, compared to 7.36 percent when he accepted the post.
Says Yankee Group analyst Chris Collins: “Every time I spoke with Matt, I was struck by how he emphasized the fundamentals of retailing and consumer marketing: expanding distribution, improving the customer experience at every touch point and building a simple, clear and emotional brand message … I think Boost was successful during his run because price was just one piece of the puzzle.”
Collins emphasizes that Carter also had a sharp focus on three other key areas of marketing: product, promotion and placement. “If a company only focuses on price, they will likely fall short,” he says.
MOVING AHEAD
Carter was appointed to head Sprint’s 4G business after just seven quarters at Boost Mobile. Though the technical and strategic challenges of his new job are vastly different from those at Boost, Carter says he feels wellprepared for his new post.
“There are a lot of similarities between the two in terms of how you come in and make a game plan,” he says. “You still have to focus on the value proposition: What’s motivating people to buy you.”
To that end, Carter plans to follow a strategy similar to the one he used at Boost. He will examine every part of the business, from sales people at retail stores to branding and positioning. “We will rally the entire ecosystem so they have a clear understanding of what makes it special,” he says.
Those who worked closely with Carter say he has the courage and management skills to get the job done.
Neil Lindsay, who worked with Carter as Boost’s Chief Marketing Officer, says Carter turned Boost around from within. “We went from being a very dejected team because we had launched an unlimited offer before and retracted it. We had to rally back around a clear strategy,” he says.
Lindsay also says Carter’s direct, non-nonsense management approach kept the company focused as it moved through difficult times. “When things were tough early on, Matt would just throw the conflict out into the middle of the room to ensure that the tensions that might exist were exposed and dealt with,” he says. “That’s a unique trait of Matt. There’s a directness that can be confused with abrasiveness, but he makes sure things are dealt with.”
Auman echoes Lindsay, saying Carter showed the drive and focus to keep the company going. “Getting to the inflection point, where you go from losing to winning again, is not for the meek or weak of heart, and he’s not meek or weak of heart,” Auman says. “There’s no question as to where we were headed with Matt. He’s a strong leader.”