As product managers sometimes we have to sit back and just watch our competition execute a fantastic marketing program. Due to limitations that might be budget based, resource based, related to our product development definition, or simply lack of time based there is nothing that we can do to counter what our competition is doing. As their sales then zoom up we kick ourselves for not being able to come up with an effective program to counter their moves. This is no fun. Over at the mobile service provider Sprint this was happening to them. However, then they decided to do something very bold…
Sprint’s Bold Plan To Steal AT&T Wireless Customers
So here’s the problem that the Sprint product managers were looking at. Over at their dreaded competitor AT&T Wireless, the parent company, AT&T, had just gone out an slapped down US$49B to purchase satellite television company DirectTV. Clearly what the parent company wanted to do was use this purchase to create unique communication channels to millions of DirectTV customers in order to convince them to purchase more AT&T Wireless products.
Sprint has been financially struggling for the past several years. They certainly don’t have billions of dollars to go toe-to-toe with AT&T. They would like to get the millions of people who subscribe to DirectTV to purchase Sprint wireless products instead of AT&T wireless products. However, what they needed was a way to get the attention of DirectTV customers. This is when the Sprint product managers got really creative.
What they decided to do was to appeal to DirectTV customers directly. They created a Sprint program where they told DirectTV customers that they would give them a free year of wireless service if they would switch to Sprint. Wow – this is the kind of thing that you can put on your product manager resume. Very clearly this was a direct attack on AT&T Wireless. One of the reasons that AT&T was willing to pay so much to purchase DirectTV was because they assumed that they would be able to convert a lot of those television subscribers into AT&T Wireless customers. Clearly Sprint’s new program was going to cause some problems for AT&T Wireless.
Will Sprint’s Plan Work?
So there’s no question that Sprint’s product managers get high marks for boldness. All of the other wireless companies were just content to allow AT&T to purchase DirectTV and then start aggressively marketing AT&T wireless services to DirectTV subscribers. However, boldness is one thing, but effectiveness is the most important thing. Does the Spring plan have a chance of success?
As expected, AT&T is trying to laugh the Sprint program off. They are saying that it is a desperate attempt by Sprint to get more customers and they point out that the program does come with a number of restrictions. What Sprint is offering is a plan with unlimited talk, text, and up to 2G of data per month for free for one year. This program does not include the cost of a smartphone. After the year is up, Sprint says that it will start to charge customers US$50 / month. AT&T says that they still feel good about their offers.
Cleverly the Sprint product managers have restricted the amount of time that this program will be available to roughly a month. What this means is that DirectTV customers who are probably only now starting to get marketing information from AT&T Wireless will now be put under some pressure to make a decision in the short term. The biggest question is going to be how much of a financial hit this may cause Sprint. If the program is successful, they will be giving away a lot of free service for a year. However, no matter how many DirectTV customers they sign up, they will still have made a splash and ensured that people became aware of the Sprint product offerings.
What All Of This Means For You
The one thing that product managers don’t like to see is when their competition gets an advantage. In the case of the wireless service provider Sprint, one of their biggest competitors, AT&T Wireless’ parent company had just purchased the DirectTV satellite television service and its millions of customers. The Sprint product managers knew that they needed to take action, but the big question was what should they do?
What they decided to do was to make a bold move – this is what our product manager job description tells us to do. They created an offer for DirectTV subscribers. They told them that if they were willing to switch their wireless service to Sprint, then Sprint would give them free wireless service for a full year. This included unlimited voice, texting, and 2G of data per month. After the first year, the subscribers would have to start paying $50/month.
Sprint’s plan is very bold. The other wireless providers were just sitting back and allowing AT&T to start to market to the DirectTV customers. The Sprint product managers shook this process up. The limited time line for their offering means that DirectTV customers will have to make a decision quickly in order to take advantage of the Sprint offer. This means that AT&T Wireless has precious little time to communicate a counter-offer. We’ll have to see how all of this works out.
– Dr. Jim Anderson
Blue Elephant Consulting –
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What We’ll Be Talking About Next Time
How important is honesty to a product manager? You would think that this would be a big deal to most of us, right? The thinking goes that if we’re not straight with our customers, they they’ll stop trusting us and they’ll go somewhere else to get the products that they need to solve their problems. However, what would you do if you found out that this wasn’t true? What if you discovered that your customers wanted you to lie to them?