What’s Wrong with Sprint?
Sprint is bleeding customers and looks to be in some substantial trouble.
“Mr Hesse, who replaced Gary Foresee as chief executive, has already announced the loss of 4,000 jobs and plans to close a fifth of Sprint’s retail sites in a bid to cut costs.” Financial Times
In what i see as a tasteful move, Sprint is starting from the top-down; they’ve already axed the CFO, Chief Marketing Office, and President of Sales and Distribution.
What has Sprint been doing wrong, and what can they do now? First let’s take a look at the problems Sprint will have to deal with, and then, explore some possible solutions.
#1. Horrible Customer Service
One of the most obvious problems is their awful customer service. Outsourced call centers, with employees who speak english poorly and clearly stick as closely to scripts as they can (there is being polite, and then there is stupid extraneous nonsense scripts that are just a waste of time), are endlessly frustrating.
“Sprint Nextel has consistently ranked near the bottom of customer satisfaction surveys by J.D. Power and Associates” – rcrnews.com
I’ll note, though, that I can’t say I’ve had a single good experience with any company’s customer service recently, with the notable exception of USAA; their customer service is phenomenal.
I’ve written before that, at least when it comes to special benefits, deals, and getting good customer service, Sprint’s customer service philosophy is fundamentally flawed, designed to only reward the wrong people.
#2. Bad Device Lineup
Even ignoring customer service issues, a boring lineup of handsets can impact new subscribers, as well as drive away current subscribers who jump ship for better devices elsewhere. AT&T’s exclusive with Apple’s iPhone only hurt Sprint more than they were already managing to hurt themselves with their outdated and boring lineup.
Boring Phones
Sprint’s device lineup has been particularly miserable recently. They had no “hot” new phones for the 4th quarter, and little or no handset exclusives for anything notable. They even discontinued one of the strongest handsets in their lineup, the Samsung M610, with no replacement in sight. Their M610, regarded as the country’s thinnest flip phone, decently equipped with bluetooth, 2MP camera, MicroSD, EVDO, etc, was their flagship phone, making appearances in most of Sprint’s marketing material, and is suddenly nowhere to be found, with nothing out to replace it. The rest of their lineup is entry-level plain-jane phones, a few silly gimmick phones, and then the status-quo “smartphone” with chicklet keyboards and dated interfaces.
Making matters worse, Samsung went on a Cease and Desist joyride and tried (successfully) to silence Mobiledea after they posted details on some very promising new Sprint devices, including the Samsung M800, the first news of anything worth calling an iPhone competitor coming to Sprint. The move just seems silly.
No Real iPhone Competition
Sprint’s handsets are boring by themselves, even if you ignore the impact of the iPhone. As of this writing, there isn’t a single device in Sprint’s lineup that a potential iPhone buyer could even consider as an alternative.
“What about the HTC Touch?” I’ve used it, and it’s just as clunky and stylus-requiring as the other winmo devices. Slapping a shallow little touch interface on top just really isn’t enough.
All the other smartphones don’t really compete with the iPhone, as the iPhone sort of carved out its own little niche between feature-phones and the large, cumbersome, unintuitive, stylus-requiring smartphone. (Many people originally argued that the iPhone wasn’t really a smartphone, just a very expensive multimedia feature-phone. Turns out that, semantics aside, the iPhone sits in a very profitable segment of the market that had been basically empty until it was released.)
Samsung’s (possibly) upcoming M800 might finally give Sprint a real iPhone competitor, but whether it is worthy of the title is yet to be seen (and Samsung seems to be doing anything they can to keep that from being seen.)
#3. Status Quo Plans
Sprint’s currently available plans are basically indistinguishable from any other carrier. Sprint lacks a catch or a gimmick: AT&T has rollover. T-Mobile has “myFaves” as well as “More Minutes” (“1,000 whenever minutes for $39.99/month”). Alltel has “My Circle”. What does Sprint have? Nights starting at 7pm?
Nothing obviously sets Sprint apart. It may be the case that Sprint has some of the best Data and Text rates around, but that’s really not enough, at least from a marketing standpoint.
Value
Something I’ve recently seen on comment and message forums: “If it weren’t for my SERO plan, i’d leave in a heartbeat.” (SERO stand for Sprint Employee Referral Offer) The problem is that the SERO plans are not available to the general public, and apparently the price is the only thing keeping these subscribers. For the general public, nothing sets Sprint’s plans apart as a good value. Pricewar? maybe, maybe not, but just matching the basic minutes/dollar formula of the other carriers isn’t helping anything.
Plan Simplicity
They’re also just as complicated as everyone else; no straightforward (Apple-like) plan options. everything is additional, separate, and confusing to the average joe just looking for a good plan. Simplifying service plan options would be a good step. Even just modifying how the plan options are displayed could make a difference.
What a mess. Even just in presentation, Sprint’s monthly plan options are a nightmare.
What they have going for them
EVDO, Good pricing for internet access, good pricing for texting (relatively), etc. Night and weekend minutes at 7pm… that’s about all that comes to mind. Also – lovely commercials.
Potential Solutions
So then what can Sprint do?
Better customer service
In the banking / insurance industry, an example to follow is USAA. Their customer service is phenomenal. Maybe Sprint needs to talk to their Customer Relations people and get some advice / hire a new VP of Customer Relations. Good customer service can, apparently, be a reality. Above all else, Sprint needs to take a good hard look at if outsourcing and cost-cutting their CS department is doing them any good. (Spoiler: it’s not.)
Better Phones
Sprint has nothing like the iPhone (and might not for a number of years) but it certainly comes across like they’re not even trying – or if they are, their effort is half-assed. (the HTC Touch is a good example: “oh just slap a few large icons on top of the same old, clunky, stylus-requiring and poorly organized Windows Mobile and get it out the door” – these other manufacturers just don’t get it. It’s all about interface, not just basic form-factor and a few large icons.) …though the Samsung M800 looks potentially promising, it certainly isn’t enough, and as of this writing, doesn’t even exist.
In it’s current situation, Sprint desperately needs a proverbial iPhone (to have an exclusive on one of the most hyped and highest media profile phones ever would be fantastic for sprint, but they’ve already essentially missed out by not getting THE iPhone – everything else for a long time, no matter how good it is, will end up just being a “knockoff”.)
Even outside of the iPhone-esque handset market, they need at least a few attractive phones. Sure, every company needs the generic Razr and “free picture phone!” – but there also needs to be a few NICE phones that people can get excited about. They had one with the Samsung m610 (thinest flip phone in the US, at least for a while – and even though it was considered their flagship phone, it’s no longer available, with no replacement in sight. …wtf?
Sprint needs a Sony Ericsson W580i – slim little slider that has a music player (that actually ready ID3 tags! imagine that! sure it’s still a clunky player when you compare it to an iPod/etc. but it’s basically usable, unlike most or all of the “music phones” available for sprint right now.)
Sprint needs a Samsung a727 – a nice, straightforward, 3g candybar. They need a Samsung Katalyst, or Samsung Blast, or Nokia 5300… They needs SOME kind of somewhat exciting phone, even if it’s NOT an exclusive (though that couldn’t hurt.)
All they have are a few generic Samsungs, Motorolas, Sanyos and LGs.
the LG Rumor is much clunkier than you’d think, the the Samsung UPstage is really aweful to use (though i appreciate their effort) and the rest are completely ignorable at best.
Better, More Simplified, Plans
The mobile market is mature, and to be profitable, Sprint need to not only retain its current subscribers, but also find new ones. The major way they’ll get significant new subscribers is to steal them from other carriers. Some great phones, and far better customer service would be a great start, but another obvious route (hopefully along side these other issues) is to offer better prices. Sprint already offers their data and texting options for very good prices, especially when compared to AT&T. Now they need to undercut AT&T’s plan prices. Sprint could make themselves the obvious choice by having an obvious value. The tricky part is to avoid looking like the “discount brand” and retain as much “dignity” as possible, but I think that wouldn’t be hard to accomplish. (It would need to be a consideration though.)
Simplified plans, possibly like SERO, or maybe just simplified as much as possible, will help retain current subscribers as well as attract new ones. A few basic plans, with customizable options, like a BTO Mac. Apple’s online store has it right. Specifically, choosing a basic model (or one of 3 basic configurations) and then customizing. Sprint needs to wrap things up together, and stop having 4 different charges for text/internet/sms/picturemail. I really think that people will probably buy more, and be happier, if there are less (or at least more simplified) options available. Fewer plans with more flexibility would be a lot better than several plans with little flexibility. I should be able to sign up for a “medium” package and then add minutes/options as i see fit.
It may also be in Sprint’s interest to find a way to reward loyal customers. This could set them apart from the rest of the industry who, in my experiences, treat their subscribers as disposable.
End Notes
Sprint has a bit of a fight in front of it, but if they can start making some good decisions, and not just follow the rest of the industry into the toilet they’ve been crapping in, they’ll have a chance.
Hell, it could even be a good thing; a catalyst that lets Sprint become not only more profitable but also better all around for their customers and the industry as a whole. …Or maybe they just continue on their path to bankruptcy. We’ll see.
Someone at Sprint needs to read this, kudos my friend on a job well done. I don’t know that I’ve spoken with any outsourced call centers, but online chat is definitely outsourced. I asked a question about free ringtones I was charged for and after 30 minutes the rep told me that wasn’t something she could help me with and I would have to contact web services. I told her I got her when I clicked on “Trouble with this feature” and she said, oh, well, is there anything else I can help you with?
It’s amazing they have lost so much market share after Cingular came onboard and now with a resurgence with Alltel, they are really becoming the 4th or 5th mobile carrier out there. Technically I think they have good service, when you can find coverage, but from retail to customer service, the entire ship is sinking.
I wondering how long until they are bought out or cut up and sold off? I just don’t see them just ending, someone on wall street is going to take them over and flip them, I feel sure, I just wonder when. And I think that will be a good thing for long time customers who will probably get some sort of grandfathering into the new provider.
You are also right, cell providers need to start thinking about maintaining long time customers as the new customer supply starts to top out. The future is keeping customers with you, not in gathering first time cellphone users. We’ll see….
tbw - April 9th, 2008 at 9:41 am