Sprint Gets Value from the Online Channel by Emphasizing Value for Consumers

Over the last few weeks, Sprint announced significant company-wide cost cutting measures and substantial layoffs. The company is faced with making hard, but necessary, business decisions to try to put them back on course. But what else is going on and is there a more positive side to this story?

There is a silver lining for Sprint: the Online Channel. Sprint.com looks like a sure bright spot for Sprint- they have seen improvement over the past year as a result of online acquisition / retention related changes on their site. Let’s dive a bit deeper and see how this impacted their traffic and sales.

Sprint is driving more Wireless Prospects (i.e. potential Sprint customers) to the website, and getting more of them to convert, as shown in the chart below.

In December 2008, Sprint saw 46% more Prospects come to Sprint.com than in December 2007 (blue bars). These consumers, in the market to do some Holiday shopping, appeared to be driven to Sprint.com via online ads — the percentage of Prospects entering the site through ads was up 115%, year over year.

However, Sprint.com’s greatest improvement since December 2007is where it counts the most — online gross adds. December 2008 online gross adds were up 72% from the same time the year before (red line). People are not only going to Sprint.com, but they are buying, driving Sprint’s online conversion rate up 17%, year over year.

One factor that could be contributing to this phenomenal online growth is that the emphasis on value in Sprint’s 2008 messaging resonated with consumers. In December 2007, Sprint focused on the SprintSpeed campaign. While there was one free phone promoted (the M300), the majority of the advertising was done on higher end phones like the BlackBerry Pearl ($199) and the Muziq by LG ($99).

With the 2008 holiday season, Sprint took a much different approach — emphasizing value in tough economic times. They also offered higher end phones— like the Palm Centro and the Rumor by LG – for free.

(Screenshot 1: Sprint holiday ad featuring Free Palm Centro, $149.99 LG Lotus, and Free Rumor by LG)

On plan comparisons — they went head to head with the competition: one holiday ad stated consumers could "save at least $480 annually over comparable AT&T and Verizon plans"

(Screenshot 2: Sprint holiday ad featuring a head to head comparison on potential savings over other Carriers)

The takeaway here is that the online channel can be a bright spot in tough economic times and companies, like Sprint, can get a clear sense of their advertising"˜s effect. Sprint now sees that results can be achieved by sending a message that encompasses the potential Customer’s needs (i.e. high end phones, "Everything" plans) at a price point that they can handle.

We are all looking for value right now, and the online channel is a great means to find it in 2009.