The T-Mobile Case Study Revisited
Chapter Three: Principle 2—To Be Compelling Requires a Strategic Point of View
Hey Friends,
It’s great to be back writing again. For today’s installment, I’d like to revisit the T-Mobile story. You remember the Uncarrier campaign. It was incredibly successful and a great example of brand strategy. But the question is, did the brand strategy create the promise and the experience deliver? Or was there something else going on.
I argue there was something—or someone—that came before the strategy. And if that’s the case, then that thing that came before is foundation for the value that was created.
If you are trying to catch up on this chapter, scroll to the end of the post and the outline with links is provided.
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The T-Mobile Case Study Revisited
Some brand strategists will argue that branding has evolved. They point to T-Mobile as a recent example of a company who differentiated itself from its competitors and became one of the top three mobile brands in the US through branding. They point to specific campaigns and innovations that led to T-Mobile’s success.
According to a case study by Prophet, in 2013 T-Mobile was losing money and losing customers. Prophet helped to turn T-Mobile into a ‘challenger brand.’ By putting their ‘customers’ needs ahead of the business status quo,’ T-Mobile was able to flip the script and outpace the larger competitors. The first initiative that T-Mobile took on was to eliminate burdensome phone contracts. The ‘Un-carrier’ got rid of long-term contracts and then marketed the ‘Un-carrier’ story.
They redesigned their business model to eliminate an onerous part of the experience (the contract) and by so doing made their competitors look greedy. And controlling. T-Mobile became what some brand strategists call a ‘challenger brand.’ Instead of differentiating themselves from their competitors using the established criteria of the category (in this case, largest network, phone plans, and pricing), T-Mobile found a big hairy friction point in the customer experience and turned it into a cause. Challenger brands don’t try to differentiate. They try to disrupt. They don’t compare themselves to the competition. They innovate and make their messaging all about their innovations, which, of course, becomes very relevant and differentiating to customers.
I think challenger brands are amazing. But it’s not the brand strategy that is actually leading the charge. In the case of T-Mobile it wasn’t Prophet who drove the change, it was John Legere, the legendary CEO who drove the change. He and his leadership team came in and realized the problems that T-Mobile was having. Legere joined T-Mobile in September of 2012. He cut his teeth at Dell, the computer company that disrupted IBM in its day. Before leading T-Mobile he had also worked at AT&T. So, he understood the industry. He knew how to shake up the category. And that’s what he did.
What Legere had before hiring Prophet was a point of view. He knew that customers hated the years long contracts that forced them to stay with their current carrier. He knew what was broken in the category. His team did their research so they knew what the near future need of the customer was. He had identified the jobs to be done. And he had full control over the experience—because he was CEO. In many ways, he made Prophet’s job easy.
In six years—the whole tenure of John Legere’s time as CEO—T-Mobile grew its customer base by 46.3 million customers. Its stock price in 2012 was $12.65 per share. By the end of 2018, Legere’s strategy had led to a $63.61 stock price. More than 5x the amount in 2012. That made it possible for T-Mobile to buy Sprint and catapult up to be one of the top three phone companies.
Like Bill Gates, Michael Dell, Steve Jobs, Elon Musk and so many other tremendous founders/innovators, Legere has changed the mobile phone industry for good. Unlike most of the people on that list, he did it with a legacy company in a staid industry.
And he did it by understanding the near future needs of his customers and developing a point of view.
To be continued …