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Sprint ends two-year contracts, recants after only one month

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Sprint brings back two-year contracts to placate customers; this is another example of consumers opting for what’s comfortable over what’s relevant.

A change in plans

Cell phone dynamics are extremely complicated these days, which is perhaps why Sprint is bringing back subsidized phones after customers rioted during the option’s month-long absence from the market.

Sprint has historically allowed both an installment plan and a (recently reinstated) subsidized plan; these plans each require a two year contract, during which the customer pays off the phone in conjunction with service fees. The subsidized plan differs in that the customer pays less per month but more up front, whereas the installment plan is almost exclusively month-to-month.

Costing customers more

After the conclusion of the aforementioned two years, the customer owns the phone and is free to pursue other carriers or options, assuming the phone is receptive to alternatives. Despite criticism that Sprint is the last service provider still incorporating a subsidized option, it seems that Sprint is retaining the plan only at their customers’ behest.

Unfortunately, the customer is not always right—especially in this case. Lifehacker author Eric Ravenscraft did the math, noting that the subsidized option—wherein one might pay as much as 200 dollars up front for a brand-new iPhone 6S—ends up costing customers significantly more than the installment plan, which is negligibly more per month.

Shrewd, Sprint. Very shrewd.

Placating your customers

This is just another case in a long line of consumers resenting change, though—like Subway’s five-dollar footlong or Costco hotdogs, Sprint created an associative deal, and their customers ran with it. The danger of having something associated with your brand is evident here; regardless of why Sprint wanted to nix the subsidized plan, the fact remains that they wanted it gone.

Now, instead, they are fairly obligated to keep the plan intact to placate their consumer base. At best, this is an unwanted reaction from the masses—and at worst, it’s an inefficient system that will invariably cost Sprint an unprecedented amount of wasted revenue.

You never know what your customers will latch onto, so consider each and every aspect you implement as you go. It could become your signature characteristic.


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