Measurement AwardBest strategic thinking to measure the impact/success of WOMTITLE: How Sprint learned that customer love could cure their illsSummary:An innovative approach to research helped Sprint reverse the customer defections plaguing thecompany. The research revealed that the secret was to understand, not what features attractcustomers but instead, which ones make them loyal. As a result, Sprint added 644,000 net subscribersin Q3 2010, a dramatic turnaround from losing 565,000 during the same period in 2009. Thiscorresponded with a drop in defections from 2.78% in Q3 2009 to 1.81% in Q1 2011, animpressive 35% decrease and Sprint’s lowest churn rate ever.
BACKGROUND AND BUSINESS PROBLEM: Stop the bleedingIt would have been easy for Sprint to feel sorry for WIRELESS CHURN, Q3 2009 3.0% 2.78%itself. The brand was without the iPhone as AT&Tgleefully added an avalanche of subscribers from 2.5%other carriers. AT&T’s biggest weakness was itsunreliable network, but that was Verizon’s territory. 2.0%Sprint was playing at a huge disadvantage when itcame to model offerings and network perceptions. 1.49% 1.43% 1.5%This disadvantage made it easy for Verizon and AT&T 1.0%to poach Sprint customers and sent the brand’sdefection (churn) rates soaring. 0.5%Sprint understood it needed to reassess its approach 0.0%to its customers and figure out a way to combat their Verizon AT&T Sprintsteady exodus, knowing that no single model would Source: http://www.strategyanalytics.com/be their savior.GOAL: Sprint needed to dramatically reduce the number of customers leaving the network.RESEARCH CHALLENGE: Study the broader online cellular community – and specificallySprint enthusiasts – to understand what drives them to be loyal/disloyal to a brand.Keenly aware that an opinionated and NET ADDS IN MILLIONS, Q3 2009 2.50valuable tribe of wireless users utilized social 2.026media technology to share stories and 2.00troubleshoot, Sprint and their ad agency 1.50 1.238embarked on a research expedition to modeland understand the dynamics of this naturally 1.00occurring online customer community. The 0.50research would serve as a cornerstone ofSprint’s renewed customer approach. 0.00 -0.077 -0.50The nature of this challenge called for an -0.565anthropological, rather than traditional, -1.00approach. So the entrant – an online AT&T Verizon T Mobile Sprintanthropology consultancy – was charged with Source : http://www.strategyanalytics.com/the task to observe and analyze the behaviorof the existing cellular community, and to develop insights as to what drove carrierloyalty, proving Sprint with a strategic foundation to stem churn.
THE INNOVATIVE METHODOLOGY: Online Anthropology/Advocacy SegmentationThe research design rested on two innovative approaches: We built custom linguistic models to understand the essence of the conversation and categorize posters as current or former Sprint customers. We aggregated carrier advocacy conversation – messages where one brand was being actively recommended over another – to understand what drove recommendation and retention. i. Initially we harvested over 10 million motivationally representative consumer conversations over a 14 month period, from major message forums, discussion boards, and newsgroups in the Cellular and Tech category. ii. Next we organized the data so that three distinct participant groups could be isolated and compared with each other in terms of content and patterns of behavior – churn driver, advocate and individual participant. CELLULAR ROLES AND PARTICIPATION CHURN DRIVER: Former Sprint customer who details the reason for their departure. INDIVIDUAL PARTICIPANT: ADVOCATE: Individuals participating in the Grassroots supporter of cellular community by Sprint recommending the conversing with others. brand to others by talking about reasons to stay. iii. Then our strategists applied proprietary linguistic analysis software tools to these conversations, building custom models to gauge passion, sentiment, and to identify the fundamental drivers that underscore behavior relative to decision- making and subsequent behavior in the context of the cellular carriers.
iv. Finally we developed an approach to segment community members by their role in driving others towards or away from Sprint. For example, Sprint advocates throughout the data period were isolated with their conversations analyzed to understand what drove loyalty. Conversely those leaving the brand had their conversations analyzed separately to contextualize the appeal of Sprint’s competitors.This behavioral approach allowed us to focus on Sprint’s sphere of influence. Anobvious panacea could have been the iPhone, but what else do cellular advocatescare about and is it something that Sprint can change in the more near term?INSIGHT: ADVOCATES’ REASON TO STAYWe identified the carrier advocates for each CUSTOMER SERVICEbrand and analyzed their conversations. Whatwas getting them excited? Why were theyrecommending one carrier or another? Itquickly became clear through the naturallyoccurring advocacy conversation that therewere three primary reasons to stay loyal to acarrier: COVERAGE 1. Customer Service 2. Models 3. Coverage MODELSThis focus on advocates’ reasons to stay shifted The most strongly impassioned conversations about carrier loyalty were about customerSprint’s view of the challenge. By focusing service, models and coverage.more closely on what creates advocates vs.what attracts new customers, the entrant was able to provide a roadmap foraddressing churn by shoring up current customers. Those customers, serving as thebrand’s grassroots supporters, would in turn be more likely advocate for Sprint,recommending the carrier to others and reverse churn’s rising tide.When we quantified the advocates’ reasons to stay by looking for opportunities, Sprint’schallenge became starkly illustrated. In the topics that drove most advocacyconversation – customer service, models and network – Sprint found itself behind thecategory leaders.
Models Coverage REASONS TO STAY BY CARRIER, 6/1/2009 – 1/31/2010Customer Service Features Models Price/Cost Topics listed in order of Coverage Speed importance to cellular advocates, from most important to least. 0% 10% 20% 30% 40% 50% 60% 70% 80% Features Topics listed in order of importance to cellular advocates from most important to least. Speed, features and price/cost are other advocacy drivers, but these are the three most important. Price/CostWhich reason to stay should be the focus?Sprint’s model line-up had a number of dynamic options in the pipeline, particularly Topics listed in order ofones leveraging the Android OS. But focusing on models is a dangerous foundation for Speed importance to cellular advocates,long term advocacy growth as new models just leapfrog each other in terms of buzz from most important to least.and attention. Coverage is another tricky area given so much is based on perception 0% 10% 20% 30% 40% 50% 60% 70% 80%and location.The best opportunity for focus became customer service. It was the biggest driver ofcarrier advocacy – even ahead of models and coverage – and Sprint found itself adistant fourth behind Verizon, T Mobile and AT&T. It was an area Sprint needed tooverhaul and quickly. Without a proper customer service approach, the arrival of thenew smartphone models would inevitably suffer. The shift from cell phones to mobilecomputers requires even more technical support and Sprint didn’t have AppleCare tobolster their customer service perception like AT&T. The Evo and Epic could be the bestphones in the market, but if they couldn’t be properly serviced there would be nomeaningful reason for customers to stay with Sprint.
DEFINING CUSTOMER SERVICEOnce we understood customer service was the key to protecting Sprint’s base, weneeded to understand how consumers define service across categories. We analyzedcustomer service conversations in financial, telecom/electronics, travel, automotiveand retail conversations, looking for patterns and like themes. We found that therewere seven clusters of conversation that define a customer service experience. Peoplewanted service that was: Knowledgeable Proactive Efficient Trusted Good attitude Personalized Convenient FINANCIAL TELCO TRAVEL AUTO RETAIL AUTOMOTIVEThese themes were explored within the cellular category and then correlated with themain areas of common support inquiries – technical, billing and general.Cellular customers wanted customer service that was knowledgeable, proactive andefficient. Knowledgeable, efficient and convenient all indexed highest against
technical support while proactive help, trusted advice and personalized attention weremost related to billing inquiries.Our research found that the best customer service brands across categories do anincredible job of merging traditional person-to-person customer service withaggregating and integrating information on the web – giving their customers multipletouch points for a stellar experience. They provide people when you want them andtechnology when you don’t. Sprint’s online tutorials and other website enhancementsreflect this broader definition of the customer service experience.CREATIVE SOLUTIONSprint and their agency took these insights to heart and went about overhauling thebrand’s customer service offerings and spotlighting its role in the brand’s marketingapproach.Sprint retooled customer service programs and rewrote scripts for call centers based onthe consumer expectations revealed in our research.The research also validated the pre-existing “Ready Now” program a stronger reason toexist by focusing one-on-one service techniques. The “Ready Now” program becameone of the avenues through which new owners learned about their phone’s capabilitiesbefore leaving the store.
Sprint also developed device education and engagement programs with the goal ofeducating customers about features and functions. This included box slips with phones,cheat sheets included with new purchases, emails with user tips and web tutorials.
THE RESULTS SPRINT CHURNThe results of focusing on “reasons to stay” and 3.0% 2.78%revamping Sprint’s customer service offerings have 2.5%had wide ranging effects. In December 2010, aConsumer Reports satisfaction survey of carriers 2.0% 1.81%ranked Sprint second, indicating that the brand hadsurpassed Verizon in many aspects of customer 1.5%service. Consumer Reports called Sprint’s turnaround“remarkable” given the brand ranked last in the 1.0%survey less than two years prior. A May 2011 report by 0.5%the American Customer Satisfaction Index showedeven greater results, ranking Sprint first in terms of 0.0%customer satisfaction. Q3 2009 Q1 2011 Source: http://www.strategyanalytics.com/Most importantly though, the brand has stemmed the tide of customer departures.Sprint added 644,000 net subscribers in Q3 2010, a dramatic turnaround from losing565,000 during the same period in 2009. The brand continued its momentum in Q1 2011by adding 1.1 million net new customers, its best quarter for subscriber additions in overfive years. This corresponded with a drop in churn from 2.78% in Q3 2009 to 1.81% in Q12011, an impressive 35% decrease and Sprint’s lowest churn rate ever. SPRINT NET ADDS IN MILLIONS 1.20 1.1 1.00 0.80 0.644 0.60 0.40 0.20 0.00 -0.20 -0.40 -0.60 -0.565 -0.80 Q3 2009 Q3 2010 Q1 2011 Source: http://www.strategyanalytics.com/