Sprint's Insight, Strategy in the Prepaid Market

Prepaid cell phones have long carried a stigma as low-quality phones associated with low-quality service. But with prepaid phone users growing faster than post-paid, or contract, cell phone users, that stigma has diminished.

And companies are taking note.

"The No. 1 business of Sprint is postpaid customers, but they were strategic to say that they want to be in both areas and work with customers for whatever works for them," said Jayne Wall, the director of corporate communications for Sprint prepaid brands, which includes Boost Mobile and Virgin Mobile, leading prepaid phone services. "We’re in the big Sprint arena, and we want people to come here and we don’t care what door they come in."

And the company has actively monitored customer feedback and insights to improve its service the past few years. First, the company improved the quality of phones available – including smartphones and Blackberries – on prepaid brands, added anytime calling, free 411, more texting options and additional available countries.

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Finally, in 2009, Boost Mobile unveiled simplified plans – $50 with everything, even taxes, included. Same fee, every month. Continued market monitoring revealed an increasingly segmented consumer base, however. As Wallace said, there was no "one-size-fits-all" plan.

Plans were introduced to a minimal-minutes plan with unlimited internet for the "savvy, wired" consumer on the Virgin Mobile platform. Boost was offered as the talk-and-text plan. Pricing remained simple, however, with all taxes and fees included in the even, flat rate.

According to Wallace, the next trend that she is monitoring as postpaid and prepaid contracts become more equitable is that customers want incentives to stick with a month-by-month contract. Boost offers what they call "shrinkage" to address this desire. If you pay your bill on time each month for six straight months, your plan is reduced by $5 each ensuing month.

"People within contracts are saturated and moving within different carriers," Wallace said, indicating that new audiences were indicating needs for more incentives to gravitate to prepaid plans. In this vein, future plans include the introduction of prepaid family plans, another need noticed while monitoring consumer feedback.

Check out the full interview with Wallace to get all the details on how Sprint monitors and derives insights from its consumers.