Will Sprint’s Customer erosion prompt NASCAR withdrawal?
As the company announced its plans for the Sprint Cup Series this season, questions arose about the recent news. Dean Kessel, the company's director of marketing for the racing series, said that those business issues are separate from the company's involvement in NASCAR.
"Certainly there are some challenges with the business, and Dan Hesse, who's now been our CEO for about four weeks, I guess, is working on those things and making the decisions that need to be made," Kessel said Tuesday.
"As it relates to what we're doing inside Sprint Cup Series, we're singularly focused on Daytona and executing the things we talked about here today. We're very focused on it. Our team is ready to go, and we've got the resources to do what we need to do, so we're going to do it."
Those things discussed included an ad campaign in which cars reflect the personalities of their drivers, enhancements to the annual all-star race and a decade-by-decade musical celebration of the sport as part of the 50th anniversary of the Daytona 500.
"This program works," he said, explaining why fans should not be concerned. "It works for us form a business standpoint. It works for us across a number of key platforms for us, as it relates to churn, which is people leaving the company – they use the term churn in our industry. Fans, our customers in our database that have said, 'Hey I'm a NASCAR fan, and I'm buying your product because you support my lifestyle,' … they use more data. Our acquisition numbers are higher as well. So the business case is extremely solid for us remaining in the sport, and that's why we're not going anywhere." Scenedaily.com [Editor's Note: And if you believe that, we have a bridge to sell you. That's why they are losing customers at an alarming rate, because a few NASCAR fans said they are using Sprint Nextel because of their NASCAR involvement. Too funny.]
01/20/08 Sprint Nextel’s announcement on Friday that it is losing customers more rapidly than expected is making investors nervous about a weak economy’s effect on other wireless companies. Ever since Nextel and later merged to become Sprint Nextel started sponsoring the NASCAR series they have been losing customers at an alarming rate indicating that sponsoring NASCAR may be hurting the company.
Shares of Sprint fell $2.87, or 25 percent, to $8.70 after it said that it planned to lay off 4,000 workers and close stores to trim costs as its customer base shrinks.
Industry analysts had estimated that in the fourth quarter Sprint lost about 350,000 contract subscribers — a carrier’s most valuable customers, signed up for contracts of a year or more. Instead, Sprint announced that it had a net loss of 638,000 contract customers.
“It’s the magnitude of the weakness that is shocking," said Michael Nelson, an analyst at the Stanford Group, an investment firm.
To reduce costs, Sprint said it planned to cut its payroll by 4,000 workers. The company, based in Reston, Va., currently has about 60,000 employees.
Sprint said it would also close 125 company-owned retail stores, about 8 percent of the nearly 1,400 in the Sprint chain. The total labor savings, the company said, should be $700 million to $800 million a year.
The cutbacks were the first major step taken by Sprint since the arrival last month of its new chief executive, Daniel R. Hesse. He had been the chief executive of Embarq Corporation, a local-phone spinoff of Sprint.