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Losing the Sprint

October 9th, 2007 · 2 Comments

The biggest business news of the week so far is Sprint CEO Gary Forsee’s decision to step down a couple years after a merger with Nextel, a deal that’s shaping up like a whopping failure. There are a lot of lessons here: the difficulty of combining distinct corporate cultures, the dangers of letting customer service go. My favorite one, though, has to be one that big marketers always seems to forget. You can’t paper over intense problems at the level of product and service with a new ad campaign, which is exactly what Sprint did.

This summer, “Sprint Ahead” became the new company tagline, blasted into the consumer consciouness with a very high-profile ad campaign aimed to eliminate brand confusion. It dropped Nextel from the branding and focused on data services and network speed. Judging by problems now plaguing the company, it’s pretty clear the new ads did very little to change anything. But you can’t blame the agency for that. Instead, blame an inattention to the kinds of things that are important to consumers who are fleeing in droves. More than 300,000 bailed during the third-quarter alone. Blame old-school, one-way marketing the evinces nothing in the way of a desire to understand why and how customers are dissatisfied.

I, apparently, was ahead of the whole ditch Sprint trend. Last October, after more than five years as a subscriber, I switched over the T-Mobile. I didn’t leave because Sprint, in brand terms, is uncool (though it is). I didn’t even leave because the customer service sucks (though it does.) I was a loyal customer for years and all I got in return for that loyalty were rate hikes, often packaged in a really annoying way. Upon recommitting, I’d find Sprint had discontinued my existing plan as a way to nudge (push?) me into a more expensive one. Still, I only moved when Sprint got left behind in the product game.

Put simply, T-Mobile had the phone I wanted. At that time, T-Mobile was the only carrier of the Blackberry Pearl. So badly did I want that phone that I actually paid a couple hundred to get out of my Sprint contract. There are no regrets whatsoever, though T-Mobile’s not a lot bettter. Its coverage is spotty outside of major metropolitan areas and it’s no less expensive. A similar thing is probably going on now with thousands of consumers scrambling to get out of their existing contracts and onto AT&T. Not because they want to be AT&T customers but because they want the iPhone. I’ll know I’ll ditch T-Mobile when some other carrier has the hot new handset I want.

Product is really all that matters now. Your cell-phone carrier isn’t much more than a gas station that provides the fuel to power your car. It doesn’t have to be that way, I suppose. If the carriers tried harder to be customer-service providers, offering something for customer loyalty, providing more flexibility when it comes to pricing plans and so forth, then maybe, just maybe, it wouldn’t be all about those exclusive handset deals and what I’d imagine are the extremely onerous terms attached to them by the hardware makers. Otherwise, these carrier would probably be better off shaping up their call centers and just advertising the phones they have, not creating new, expensive, and increasingly platitudinous taglines that mean very little and do even less.

Tags: Advertising · Loyalty · Matt Creamer

2 responses so far ↓

  • 1 Avi Dan // Oct 9, 2007 at 2:34 pm

    Great post. Service is the new (pard the expression) killer app. Great piece in the WSJ on how Wal-mart’s competitors compete succesfully on service. It is amazing that it is not a core competency for most companies or agencies.

  • 2 md // Oct 11, 2007 at 7:10 am

    Slightly disagree with the product being the only thing that matters.

    One reason is that coverage can still be spotty for certain providers. Depending on where you live, you can easily strike up a conversation about what carrier you have and how much they may (or may not) provide crappy mobile coverage in Area X. Take the traind from NYC to Stamford, CT.

    I’d also argue that with the proliferation of cool products, consumers will get immune to the latest shiny new toy since another once is coming out. The iPhone, however, represents category-refining product, so that still holds on that level.

    When is a carrier going to come out with an early adopter plan for people to exchange their devices every few months? Oh wait…that would rely on SERVICE (gasp!)to migrate data to the new devices and to interface with its customers, something that the carriers would rather not do.

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