Speaking during J.P. Morgan's in Boston, Hesse said that Sprint is focusing on three major challenges: improving customer experience, boosting its brand reputation and stabilizing its finances.
Hesse said the company has seen its own internal customer satisfaction numbers go up for 15 consecutive months but cautioned that it could take a long time to rebuild Sprint's reputation for customer service. Hesse likened the company's current situation to that of Japanese car manufacturers when they first tried to penetrate the American market and said that the company's quality was not being reflected in its public perception.
"You have to be patient when you have a brand that took some shots as our company did when it was focusing on integration issues with Nextel back in 2006 and 2007," said Hesse, who also claimed that "people who've experienced Sprint in the last 12 months have had a favorable experience."
Sprint has made improving customer service a key goal of its turnaround plan. Over the past couple of years, the company has been stricken by major customer losses in its wireless services, losing more than 4 million wireless subscribers last year alone. The latest American Customer Satisfaction Index, a yearly study published by the University of Michigan's Ross School of Business, shows that although Sprint still places last in customer satisfaction for its wireless telephone service, the company has improved its score significantly over the past year and has registered a 12.5% increase in customer satisfaction since 2008. The study cautions, however, that "some of the increase is likely to be due to many departing and not very satisfied customers" and not only improvements in Sprint customer service.
In addition to its improving customer service, Hesse said that Sprint hopes to make big strides forward later in the year when the company launches its in 10 major cities. Hesse also said that the company would get a boost when the , billed by the company as its showcase smartphone, hits the market on June 6.
"What the iPhone has shown is that if you really do have a compelling device that is revolutionary… then customers will switch to your service," he said. "We think the Palm Pre stacks up very well against the iPhone, especially its operating system and the ability it gives you to multitask and to integrate with business and consumer applications."
Hesse also said that the Pre could help Sprint reduce its churn rate for postpaid wireless customers, which bounced up from 2.16% in the fourth quarter of 2008 to 2.25% in the first quarter of this year.
Over the past year Sprint has seen a steady drop in its quarterly revenues, as its $8.2 billion in first quarter 2009 operating revenues marked a 12% decrease from the $9.3 billion in operating revenues it generated in the first quarter of 2008. At the heart of Sprint's decline has been the continued deterioration of its postpaid wireless plans in which customers pay the carrier after using their wireless minutes every month. Although Hesse touted his company's recent successes in bringing aboard subscribers to less-expensive prepaid wireless plans, he stressed that "one area we need to turn around is decline in postpaid subscribers."
"Our problem is that we're not bringing in new customers and that's largely a brand issue," he said.