Sprint’s “Aggressive Pricing” Offers More Value but No Savings

by Matt Klassen on August 20, 2014

When Marcelo Claure took over as Sprint’s CEO two weeks ago he immediately promised that the new Sprint would get aggressive on pricing in an effort to attract new customers. On Monday Sprint made good (sort of) on Claure’s promise, rolling out the company’s first Family Share Pack, which effectively doubles the amount of data consumers get at the industry standard price points.

While not willing to offer any actual savings (as in lower costs) to the consumer, Sprint’s new pricing leverages the company’s greatest asset, its high capacity data network, offering a data gluttonous population more bang for their buck when it comes to data allotments. In addition, Sprint has also unveiled additional promotional campaigns that would further increase subscriber data amounts at similar price points to its competitors.

To top it all off, Sprint has done what any company trying to play catch-up in a changing industry would do, unabashedly copy its rivals, as the company has taken a page out of T-Mobile’s UnCarrier playbook and promised to reimburse customers for their early termination fees from other companies when they switch to Sprint.

But the key issue here is that while Sprint is offering enhanced value for consumers, it really hasn’t got aggressive on pricing at all, meaning consumers looking for truly affordable options are still left wanting.

It’s a semantic bait-and-switch, a ploy companies use all the time, with Sprint telling prospective customers that it’s getting aggressive on pricing, when really the price remains exactly the same, you’re just getting more value for each dollar spent. Now admittedly increasing value is a kind of savings, as you’d be paying more if you bought that same increased data amount from a competitor, but that assumes, of course, that more data is what you want, not more money in your pocket.

“Sprint is offering the best value to data-hungry consumers. Period,” Claure said in the press release announcing the new service and promotions. “We want customers to think twice before choosing another wireless carrier.”

It’s similar semantic confusion to what I experienced a few years ago when looking to purchase a new vehicle from automotive giant Ford. Initially I was attracted to Ford’s EcoBoost engine, one that promised enhanced fuel economy. But upon closer inspection Ford’s EcoBoost employed its own semantic bait-and-switch, offering increased horsepower over the standard Ford engine while using the same amount of fuel. It was a great feature if you wanted more power, less so if you actually wanted to use less gas.

So while Sprint’s increased data allotments at industry standard price points do admittedly offer consumers substantially more value; its only a deal if more data is really what people want. I happen to think that while there certainly are some people out there who want more data, more bang for their mobile buck, what most people really want is the data they have…but cheaper.

I would guess that if people are willing to shell out money for expensive smartphones and willing to lock themselves into onerous multi-year contracts that they’ll usually not skimp on the data they think they need. Increasing the amount of data they get while shelling out the same amount of money just isn’t the savings consumers really want, and it’s unfortunate that Sprint hasn’t seen that.

Sprint had a real opportunity to undercut industry pricing here, offering true savings to customers looking to spend less on their mobile lifestyle. Instead Sprint got aggressive on pricing by not changing the price at all, offering customers more data for the same amount of money; great if you want more data, less so if you actually want to save money.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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