Last week (Jan 18), Sprint Nextel announced they lost more subscribers than expected. And management's outlook for the next year doesn't look much better. To make things right, they've announced 4,000 layoffs and promised to close several hundred retail locations where customers can go to pay bills, purchase new equipment, and work out service problems that simply can't get fixed on the phone (i.e. most of them). The expected savings will be around $700 million. No report on the costs to the consumer.
Wall Street rewarded the announcement by pounding Sprint's stock (and this was before the massive sell-off on MLK Day). And while they've regained about half of that loss, Sprint is down more than 50% since last summer.
So what does this have to do with branding? The Wall Street Journal article about the cuts makes two very good observations. The first is from Craig Moffett of Sanford Bernstein & Company. He says, "Cutting costs isn't going to help solve the basic problem. They're not going to cut their way to greatness." Excellent point. While cuts may help set the stage for a change, the cuts themselves will only exacerbate the problems in the short term. Without a different (better) strategy, Sprint will continue to disappoint customers and investors. No company will ever cut itself to greatness.
The second observation is related to the first. Robert Passikoff of Brand Keys says, "Everyone knows Sprint, but no one knows them for anything in particular." That is, they are a brand in serious need of a story. Why choose Sprint over AT&T or Verizon? No idea. Back in the day, the pin-drop represented audio clarity for long-distance service. But Sprint cell service/reception/call quality isn't better than the competition. What's Sprint's story now?
If Sprint really wants to emerge from the malaise holding them down, they should rethink the entire cell phone business. There is so much wrong with how plans are sold, how phones are limited to carrier networks, how fees are charged, how plans are changed, and on and on... Sprint (or, more likely a smart competitor not bogged down with Sprint's history and processes) has an opportunity to really disrupt the cell phone business and provide phones and service that customers really want.
Now there's a brand story just about everyone would get excited about.