Verizon’s ‘Turnaround Guy’ Lays Out the Keys to the Company’s Recent Successes

In a comprehensive interview with Retail TouchPoints reporter Nicole Silberstein, Verizon Consumer CEO Sowmyanarayan Sampath spoke extensively about his plan for continued and lasting growth, zeroing in on a variety of facets key to achieving success.

Self-styled as the “turnaround guy,” Sampath indicated that he had held eight different roles within Verizon over the course of the past decade, frequently being called upon to “get involved in big turnaround situations and then move into the next thing.”

Sampath drilled down into a few foundational efforts he had made, and was making, to ensure an upward trajectory for both Verizon customers and employees.

Verizon’s Former Slow Sales: Perhaps the Price Premium Was Too High

When Sampath took the helm, Verizon’s consumer division was facing the problem of sluggish sales. Noticing that the price premium was set at 50%, he said pricing was perhaps damaging the company’s ability to actually drive sales through a price-sensitive customer demographic.

“Our price premium was too high — when I joined it was almost 50% over the market,” he said.

“Despite how good we are, selling at a 50% price premium is tough to get through the system. So the first thing we did was reduce our price premium to 20%, and what was interesting is that even though we reduced our price premium our incoming revenue from customers actually went up, because people started buying more,” Sampath added.

Moving Sales Incentives Away From Group Comps Creates Careers, Rather Than Jobs, at Verizon

One point on which Sampath was crystal-clear: Sales rewards and incentives being offered through group comps rather than individual performance is a surefire road to failure.

Stating that Verizon is one of the few places left in the U.S. where someone can walk in with an associate’s degree and — after gaining some frontline experience on the floor — end up running things for a larger group of staff. However, when everyone’s performance is tied together, rather than highlighting the hardest workers, performance dips (and so does satisfaction).

“But when you move to group compensation, you don’t create careers anymore, you create a job. It became a self-fulfilling cycle where people were on group comp, they didn’t think that careers could be built, so they weren’t performing well and so the stores weren’t doing well. [As a result corporate decides not] to double down on stores and instead focus on digital,” Sampath said.

“We went back to individual compensation and it started the whole Renaissance [in the consumer business],” he added. “By saying, ‘You can build long-term careers in stores,’ the stores started doing really well. [Suddenly then the attitude was] we need more stores.”

The end result of Sampath’s retargeting of individual performance metrics in terms of sales to customers? A productivity bump of 20%.

Localized Store Experiences Can Be a Differentiator for Verizon

Sampath was shy in criticizing the often sterile and bland store layouts common to the modern era, specifically when it comes to big-box retailers and chain retailers in the space.

When he took over as CEO for Verizon Consumer, the business was run through the company’s Basking Ridge, New Jersey, headquarters. Under Sampath’s watch, operations were broken up into 55 local territories falling under six regional umbrellas, with the aim being to create tangible localization of Verizon stores nationwide.

“We decided that we want to be a local community brand that aggregates to a national brand, as opposed to the other way around,” he said. “If you close your eyes and someone drops you in most of the national big-box retailers, you would have no idea where in the country you are. Why would I come to a store like that? Unless there’s something personal in the store, either the service or a localized product or a community feel, you can just do it online.”

“If you want people to come to your store, you’re going to have to give them a reason — great inventory, personalized service, a referral, a sense of community,” he added.

Retail TouchPoints listed several concrete ways that Verizon’s localization strategy had been deployed, including having store managers and employees who are familiar with the area and who get involved in community events; adding interior design motifs or aesthetic elements that are in tune with the region itself (such as murals from local artists, customized merchandise mix, and local-specific offers); putting store managers in control of playlists pumping music throughout individual stores; and hiring a localized mix of staff to meet area-specific demands, such as Spanish-language speaking employees in regions where that might be called for.

Personalization vs. Omnichannel

In a similar vein of thought, Sampath offered a perhaps controversial take on one of the retail industry’s favorite buzzwords: omnichannel.

“I don’t love the word omnichannel, because it feels like a cute way of saying I’m going to sub-optimize both the digital and physical experience. I want the world’s best digital and the world’s best physical experience. If there are two or three points of connection, I will do it, but I’m not going to optimize for it, and that’s what most companies do,” Sampath began.

“There are so many demands on the systems to get to a phenomenal omnichannel experience and [the result is] both experiences get dumbed down. I would rather make some sacrifices in omni to offer the best digital and the best in-store experience,” he continued.

Preferring a “blending of the boundaries” between the retail store experience and the digital experience to discrete omnichannel options, the CEO once again pivoted the conversation to a more customer-centric angle.

“Stores need to be a personalized experience. When you walk into our store, if I know you’re a customer, I need to talk to you like I know everything about you. And even if you go and look at all the digital displays, that needs to be a logged-in, personalized experience. I also think there’s an opportunity for education at the store — how to do cyber better, how to use fintech better — stores are a great place for [those kinds of conversations],” Sampath added.