SprintNextel Says "You're Fired!"
By now you most likely have heard that SprintNextel has fired a few thorny customers. In a letter to about 1,000 of its 53 million customers the company "terminated" these subscribers, who apparenlty had SprintNextel customer service on speed dial. The customers called the SN contact center an average of 25 times a month, a rate 40 times higher than average customers, according to published reports. I think it's a great move, but let's not overstate it. Yes, it's an interesting entry into the "do you fire customers?" debate. But, this is only 1,000 customers. If SN were really going to cut into its "below zero" customers, I'm sure 1,000 is a negligable amount. Also, it's very interesting to me that AT&T, which is in the middle of iPhone hell, used the occasion of SprintNextel's move to essentially say "hey, we would never do that."
SprintNextel is on the right track here. I just think they could have gone further if they expect this strategy to be truly impactful.
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We should "fire" customers who do other things, like pay slow and abuse our people. We are so volume driven that we mistake volume for "desirable business". If a customer constantly creates collection work, then it is just as bad as the customer service example. Abusive behavior makes retention of good employees more difficult. We want to keep our good people. One way is to keep them out of the line of fire from those few "customers from hell".
While I can’t blame Sprint/Nextel for firing those customers, I would agree with Graham Hill on all his points and add one. The risk to Sprint in an era where a “verbal terrorist” has a lot of tools to poison the water through blogs, social networks and the like, is much greater when you fire a customer than in the past. In the past, getting rid of a low value customer was just that. A non-profitable customer who’s cost and nuisance factors were detrimental to the business. But customers don’t perceive themselves as high or low value to you – they are high value to themselves and thus, because the general customer base is that much more empowered, many times they know they can affect you probably far worse than your firing of them affects them. They can just go to T-Mobile if Sprint/Nextel doesn’t work out. Plus, if as a company there are general problems – and with Sprint/Nextel (most telcos really) there are - I’m a customer and I know from experience – they reproduce the same kind of customers. What they did doesn’t seem like a big warning to some customer to not call them – it, in fact, could possibly encourage customers to call 25 or more times a month to get out of the early termination fees – which are steeper than they deserve to be with Sprint/Nextel. Plus they have other issues – like the astonishing lack of integration of Sprint and Nextel which serves no purpose but confusion and probably necessitates 25 calls a month just to sort out the differences in how Sprint and Nextel work – one company with two systems is a foolish approach. So, WHY those people were calling , fired or not, might be quite instructive and something that Sprint/Nextel could learn from and could, perhaps, benefit their future and present customers. If they don’t, I’m going to call 25 times a month...
This is an interesting one. I am in a situation with my ISP where they attempted to fire me a year ago but never had the cohones to do it. They mistook my total irritation with the way they acted as my being troublesome instead of my being loyal and critical. They were an experimental service (now established) in the UK where broadband service is delivered to subscribers by radio (A similar but different technology to cellular radio), and they had huge teething problems.
I'm an early adopter (I bought betamax way back!) and I had the usual early adopter woes, and I fed them back. They had so much feedback from me that they chose to look at me as hostile and offered me an incentive to leave. Nothing could be further from the truth. I both love and need the product they supply.
This leaves me in two minds about Sprint. If the callers to the call centre were truly time wasters, then good for Sprint. But if they were like me and trying hard to be constructive and helpful then they've alienated some people they really ought to think twice about treating that way.
What if 1,000 blogs now spring up and tell the world about being fired from the perspective of one who was fired, and that those blogs show or purport to show how Sprint mistreated them? Will that have a PR effect and will it be positive or negative?
If 1,000 people were so badly handled by customer service that they called in repeatedly, what was going on in that call centre?
I have strong doubts about this action. Praise it by all means, but I think that sends a bad message out to call centre managers about customer retention. Of course we don't retain a customer at all costs, but telco churn rates usually take care of that, don't they?
As both a consumer and supplier of Customer Services, I would be uncomfortable with any Corporate body that generated the need to call that many times to fix an on going problem.
Just be a customer for a moment, you may have taken some time to select this supplier and want them to get the service right. How many of you have enough spare time to call a company 25 times a month just to be annoying?
The worring aspect is that Sprint may rely on the fact that after two or three goes, most consumers give up! The view that letting customers go is 'good', can only hide the deficiencies in their handling of problems.
I think AT&T have caught on to the correct attitude (as long as they live up to it!)
Martha
I am a little surprised at your comment, "Why are these customers upset to get out of a relationship that obviously wasn't working".
A little reading around suggests that some of the 'Sprint 1,000' were terminated because they had to repeatedly call to get recurring billing problems fixed, for example, being billed each month for VAS that were supposed to be free, being told the billing problem would be fixed next month only to find out one month later that it wasn't. Furthermore, each handover within Sprint apparently counted as a new contact from Sprint's perspective. Is it too much to expect that your bill be correct and that Sprint fix it when it isn't?
How would you feel if you had been treated this way by Sprint, particularly if the source of the problem wasn't your fault? Would you be happy to go? Probably, if another carrier offered comparable network coverage, VAS and price plans. Would you be angry at having been treated so patently unfairly? Almost certainly, and as the Ultimatim Game teaches us, maybe even to the point of retaliation through other means.
The answer isn't just to fire call-intensive customers with problems, particularly when the problems are self-inflicted. That is just lazy. The answer is to fix the problem at source so they go away. And to handle customers as though they were people, not line items on the P&L. You of all people should recognise that.
Hopefully the news furore and Sprint's rapid reinstatement of many of the Sprint 1,000 has demonstrated that the answer isn't simply firing customers.
Telco, heal thyself.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Why are these customers upset to get out of a relationship that obviously wasn't working? As I see it, Sprint gave them a free pass to go to another provider. Sprint waived fees, waived the last bill, and now these customers, who clearly have beaucoup d' problems with Sprint, are free to find wireless nirvana with a Sprint competitor. This is better for Sprint and also better for these obviously unhappy customers. Besides, if these customers are using up so much of the customer-service people's time, then who has to pay for that? Answer: Sprint's best customers, who, because of Sprint's actions, will now not have to subsidize the worst customers and won't have to wait on hold so long to get legitimate help.
It is interesting and I think a good example of being customer-centric! After all, these are clearly not happy customers so terminating the relationship is probably the most customer-centric thing to do...
Treating Customers right even if it means firing them
JT
www.edmblog.com
It's all just too easy for lazy executives to fire unprofitable customers.
For each uprofitable customer there are a host of reasons why they are unprofitable and a corresponding host of potential solutions to make them profitable.
Key amongst these is looking at the origins of why the customers are unprofitable. Twenty five calls a month is a lot. But why do they call 25 times a month?
Is there something in Sprint's products & services that is fundamentally broken? If yes, then fix them.
Have the customers been sold inappropriate products & services? If yes, then thansfer them to the right ones?
Is Sprint not solving their problem on the first, or even the 24th call?. If yes then fix customer service.
Can we get the customer to use a lower-cost channel to resolve their problems? If yes, then migrate them across?
Can we pass on the costs of calling to the customer. If yes, then contact the billing department?
Can we pass the customer to a lower cost partner? If yes then migrate them across.
Is the customer just looking for social contact? If yes, then refer them to an appropriate organisation?
If you really cannot solve the problem at source because of a 'customer-issue', then ease them out of being customers with grace and aplomb. Perhaps even refer them to a competitor who can provide them with the right products & services. Don't just fire them! You never know how many friends they have in high places. Or whether they have an A-list blog. Or will start one in response!
In a world of ever-decreasing service, it would be perhaps 'helpful' if executives and their consultants looked at customer experience problems through a magnifying glass, identified a way to solve the problems at source and then took the responsibility to implement them, rather than just shrugging their shoulders and passing the problem onto someone else.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
I agree with you 100%. Every company must evaluate the profitability of its relationship on a regular basis. And end the relationships that do not work. 25 calls a month is not just a complaint problem it represents an inherently flawed relationship.
I doubt that even AT&T can afford retaining customers who contact them 25 times a month. its simply not a profitable model and demonstrates a mismatch in the relationship.
The time spent on these customers should be allocated to delighting the right customers and maximizing value for them. Sprint has a responsibilty to the profitable customers first.
The way Sprint did the move with waiving fees etc. was the right thing to do. In fact, those customers who used to call 25 times a month should be satisfied that they now will get a (hopefully) better vendor and would not need to call 25 times a month. it seems as Sprint did them a favor.
(Although my suspicion is that they will not be happy with any service...)
The essence of a win-win relationship is sometimes sending your worst customers to your competitors. By doing so you win twice. Your competitors will be stuck with unprofitable customers and you will focus on the right customers.