Think Customers: The 1to1 Blog

This was interesting because I hadn't seen this article. I've been a customer of Sprints for about 10 years and have multiiple lines include the broadband service. I wish I could fire them w/o a $150 fee.

About 3 months ago, I found some discrepancies in my bills from the end of last year and the beginning of this year. It totaled about $200-300 of extra charges. After complaining with them and some of their managers they were able to reimburse only half the charges but couldn't do the other half because the charges were out 90 days and their policy states they can only go back 90 days. Though I hadn't caught the problem in that timeframe and it was clearly their mistake they should have owned up and taken care of me especially because of my loyalty to them. I'm still considering taking them to small claims court to settle. Regarding their business decision to fire customers, did they indicated they would waive the $150 cancellation fee? If so, I'm going to start calling them everyday so I can get 'fired'. &nbs p; I would gladly welcome that and take my business elsewhere but t hat $150 fee keeps me from gonig through the trouble of switching carriers. Out of principle though, I still may take them to small claims though.

Regarding their argument of 90 days, I wonder what would have if I submitted my taxes with an unintentional mistake and it meant less revenue for the IRS. If they came back to me for additional taxes and fines for 90 + or greater and I told them that I operate with a 90 day policy, do you think I would win my case?

Thanks for allowing me to vent but this article did stir up some emotions...

Interesting article!

With call center costs in the $1.50+ range per minute, some savy customers realize that continual calls to a customer service number are a good way to put a small dent in the pockets of a vendor that they are dissatisfied with. But when a bunch of consumers get together and utilize the same strategy, the dent gets much bigger very quickly.

The article states that:

“Since Sprint’s "money" comes from customers like Marc, and is paid out to a tiny handful of customers who spend an inordinate amount of time complaining about the same problems over and over, we think it makes sense to reduce overall service costs while making it easier for customers with legitimate issues to get through to customer care.”

Maybe so, but who determines whether an issue is legitimate? Customer perception is reality.

Further, I’m willing to bet that many of these issues had to do with pricing and fees. If these customers were under contract and Sprint’s “Dear John” letter excuses them from their obligation it creates a problematic scenario for Sprint. You have customers complaining about your billing practices. They know they can’t cancel a contract without penalties. They call your customer center repeatedly and you are forced to fire them. They move on to another carrier without paying the penalty. The question of “who dumped who” is moot if all you wanted was to get away. Ironically, the calls these customers placed to the call center were probably from their cell phone at no charge to them.

I think the lesson here is that large companies can no longer assume that their policies are immune to backlash from individual consumers. Technology has leveled the playing field.

As a someone who runs his own CRM consulting firm as well as having served with some of the major firms, companies such as Sprint should provide better services rather than blame their customers. For instance, I 'fired' Sprint a few years ago because they provided inferior telephone services, terrible customer support and inaccurate billing information.

Good to know. I have let a lot of customer service things go with my current wireless carrier, Verizon. I guess, Sprint will definitely NOT be my next choice. As a former telecom executive, I think throwing away imperfect customers will surely cost Sprint in the long run. It's not like they are the only game or even the best game in town. Watch, they'll be the next to be purchased. Keep in mind, sometimes the purchase price is connected to the number of customers they have when purchased. So, AT&T or Verizon will be able to buy Sprint for a song!

Phil,
The USPS is definitely in a unique position, and I’m sure is constantly looking for creative ways to deliver top service at a lower cost (personally, I love the USPS self-service kiosks).

As for Allstate, what my brief editor’s note didn’t have room for was that I was considering Allstate car insurance at the time I received that letter “firing” me. I chose to stay with my current provider instead. On the other hand, my financial planner has changed his business to where his firm’s clients are now only very high net worth people. But surprisingly, he hasn’t “fired” me as a client, even though I no longer fit his firm’s criteria—I think because of the friendship we’ve built up over the years. If he did, though, I would totally understand; but if he did, I would also appreciate a recommendation to someone he respects; that’s what, for me, would make it a better experience.

I think both customers and the organizations that service them have responsibilities to each other. What I mean is that customers need to take some responsibility for creating a win-win situation. In a very simplified example: You shouldn't expect a server to be polite to you if you’re rude and disrespectful to him. If you want a pleasant dining experience, you should be polite to the server.

Sometimes you can’t fire customers if your organization is like mine, a quasi-governmental agency with a mission to provide universal postal service. We are financially strapped by having to add more infrastructure and human resources to accommodate the growing number of residences or deliveries as the population continues to grow.

I know that you are mainly addressing the non-governmental markets not mandated to serve everyone and with the freedom to” fire” customers.

Ginger, I was just wondering what your feelings are about Allstate Insurance, after all you need home insurance. Would you use Allstate for other insurance needs? How do you feel about the Allstate brand or insurance industry in general?

All business is not good business. There are customers who drive profits and customers who eat them if you're not careful. The key is understanding which ones are which and then deciding what the strategy is to handle it.

One approach I've found that can work is to apply a version of the Boston Consulting Group matrix to your customer base (use profit and potential on the axes and see what your customer fit looks like. (Some customers will be cash cows (low potential/good profits), some will be rising stars (high profit/high potential), some will be problem children (high potential/low profit) and finally, some may end up as dogs (low profit, low potential).

I'd argue that the dogs should be put down on a regular basis. They take up valuable management time, can demoralise hard-to-find staff, hurt cashflow and generally be hard work. There are a couple of provisions:

a) Be sure a client isn't int he dog category because of a systemic failure in your own business processes. In which case you can expect many more once-happy cash cow customers to join them. In that case, fix the problem - don't fire the customer!

b) Don't get too big for your boots and start shooting from the hip. Never forget customers are the end-game and the reason you're in business.

Some companies can get arrogant because they're in a purple patch and have recently hit a few home runs. Don't be too quick to walk away from business - it's a serious matter and should be treated as such.

That message boards and others would criticize Sprint for “firing” 1000 customers, suggests how little these folk understand not only about business but about human nature. Why not suggest there is something not quite right about 1000 people calling to complain 25 or more times in a month rather than just “fire” the service provider (there are other choices), demand a refund, etc.? More firms should do what Sprint did and recognize that a miniscule number of customers can not be satisfied and that to move on their relationship needs to end.

Several years ago I worked with a very “satisfaction guaranteed” company whose President had what I thought was a totally rational business policy. To repeat buyers who requested refunds of virtually everything they bought or who made repeated impossible demands of Customer Service, he sent a polite letter stating that his company had obviously failed to satisfy the customer and, recognizing this, they could no longer honor orders from that customer. These names were flagged on their data base so future orders would not be filled. This approach seems no different than that of a company refusing to honor additional orders from customers flagged as bad pay, fraud or bad credit risk.

Having been on the receiving end, for more hours than I care to count, of Sprint’s poor customer service, I have to say that their fired customers should consider themselves lucky. They probably wanted out of their Sprint contracts and Sprint wouldn’t let them out without them paying an outrageous fee.

I heard a rumor that a portion of the 1,000 fired Sprint customers had legitimate complaints regarding unresolved issues or issues not being resolved in a timely manner.

I spoke with one of their customers who had a problem getting a replacement phone connected to their service for 3 solid weeks. Once, they were put on hold once for up to 40 minutes.

Toward the end of this Sprint "adventure," they obtained a direct line to a Sprint associate for service. This customer begged to be terminated and the company refused. There was also a small billing error that this customer never even addressed, because "It wasn't worth it."

So my question is, about what were these 1,000 customers abusing Sprint's customer service? This same customer with whom I spoke, said that when they were in a Sprint store during their "adventure" they witnessed a customer trying to pay her bill at the store. The sales associate apologetically refused the payment, because the store only had access to one of the merged organization's unmerged billing systems. When I hear stories like these, it's not too difficult to imagine some very frustrated customers. I read one comment about the 1,000 reflecting a very small portion of Sprint's customer base. I can believe that, because only a small portion of the people would have the energy to not give up and keep calling them. I don't know too many people willing to stay on the line for 40 minutes. No wonder Sprint was on certain customers' speed dial, if repeated calls had to be made.

If all this is true, then I believe that Sprint made a poor decision. By firing these customers, they not only alienated them with poor service and empty promises, but they cinched the deal by dismissing them. They made a bold and clear statement that customer service is not a key concern or objective. I wonder if Sprint has lost more customers or gained fewer customers than usual since these firings?

Before I would ever engage with this company, I would require the specifics of what actually happened. How many consumers would even bother to pursue such issues? Most would just move on and not take a chance.

Having said all this, you might be surprised that I am an advocate of firing certain customers. Only one criteria should not be used. For instance, the fact that a customer calls an exorbitant number of times in a month, should not be the only reason to term. If truly poor service and/or defective products are behind the calls; who fault is that? A sound customer assessment process should be part of any customer loyalty program. This should include sales volume, profitability (including expenses used to maintain that customer), growth potential, etc..

The manner in which the customer is fired should also be a standard part of the customer loyalty program. The firing should be done in a manner to maintain as much good will as possible. The customer may become desirable some day in the future. They may become a key decision maker at a potential or existing key account. A negative prior firing experience could kill the prospective deal.

I agree with the concept of letting go customers that no longer fit your business model. But how it is done is what matters (the execution). Hopefully, common sense was a big part of the analysis, particularly with a view to Lifetime customer value and related income streams, be if from other product lines or related customers.

I think one way companies could do a much better job of execution is to avoid the mass actions. Rather than have analysts bring forth lists of people that need to go, train the front line staff on how to identify those clients that may be a drain on the company resources,then have a protocal on who they approach and how they take action. This would result in a practice that may not go through some of the PR nightmares listed in other blog responses.

This is definitely a touchy topic, with proponents on both sides of the argument. Executive Editor John Gaffney blogged about Sprint Nextel's move shortly after it was announced (Sprint Nextel Says, "You're Fired"). Readers who posted replies were definitely of opposing viewpoints.

What Sprint missed the boat on was in the execution of this approach. Simply cutting these people off with a form letter in the post/blog/link world we live in today, makes this a much more publicly visible process than it needs to be. With only 1000 customers, personally approaching these people with alternatives could have turned this into a better situation.

One undertapped opportunity for companies is to decide what to 'stop' doing. To do so must be done with specific critieria and needs to be shared in a meaningful way, so that if those decision parameters change, then the decision can likewise change.

We need to have new mechanisms for managing heuristics (signposts that serve as navigating beacons). Such mechanisms are also served by feedback loops -- both internal and external.

Decisions are complex. They are only 'most relevant' at the point at which they are made. Beyond that, everything changes. We need to find new management mechanisms that do not attempt (foolishly) to squeeze out change, but to embrace change as a power by which to catapult business forward.

The "customer is always right" mentality is still very relevant in today's marketplace. However, the broadness of the customer base and thus their opinion of what is “right” is radically changing. Consumer trends point to consumers seeking out niche products and service providers that best fit their complicated needs. This niching is requiring that brands re-tool their offerings in a way that will be the most attractive for their target audience and yet still turn a profit. The days of brands being all things to all people are over and because of this they will have to cut away their customer base that is no longer a fit for their product offering. This "fit" may no longer pencil in terms of profitability or even the ability for the brand to truly meet the customer’s needs. If the fit is not there, then the brand has a few main options. First, they can explore further evolution of their current products and services to stay competitive within the marketplace. If that is not possible, then they should explore development of sub-brands or further segmentation of their product/service lines. If neither of these options pencil, then they seriously need to explore what it would mean to their business to cut bait with current customers that do not fit their current product/service/brand/profit objectives. The absolute worse thing they can do is to sit and wait it out based on past successes they have experienced with an outdated business model.

Here in Florida, State Farm just 'fired' over 50,000 customers whose only crime was living in costal areas where the chance of hurricane damage is higher than in inland areas. This despite cashing checks from these customers for the last 20 years with no claims.
State Farm's approach is generating nothing but bad PR for them. We look at it at cherry picking - insuring only the safest risk. The nature of insurance is risk management, not risk exclusion. They are creating more and more empathy toward kicking all insurers out of Florida and putting 100% of home ownership insurance in Citizens Insurance, the state run Insurance group. Thats in addition to telling State Farm if you don't write howeowners insurance, you can't write the more lucrative car insurance policies. State Farm's approach can only come back to bite them as public resentment toward them grows exponentially.

Organizations with customers that create a greater cost or liability than revenue have a responsibility to either fire the customer or create a new price plan. Customers who call Sprint an average of 30 time per month should either be fired or pay-per-call. Without these actions on the part of Sprint other customers would either see a price increase or longer hold times or both. I wish more companies had price plans based on customer activities rather than on averages.

I agree that there are classes of customers who use a double standard in their relationship with their vendors. On the one hand they expect personal attendance to every detail and, on the other hand, want only the least expensive products at steep discounts. They ignore their responsibilities as a customer to see a bigger picture and, instead piecemeal purchases so the end result is a mosaic of disparate technologies which don't always work together. When their support costs go up and/or something goes wrong, their demands for vendor response/service to be equivalent to the highest, on-site, immediate trouble shoot and repair..even though they have not purchased that level SLA, is astounding.

Working with this type of customer has led to careful analysis and frank discussions that are leading to suggestions that they might be better served working with competitors-if they can demand and receive essentially something for nothing.

Hindsight analysis often shows call backs from either their replacement or a substitution on our part of a new an profitable client in their place.