If you’ve ever been involved in a business of any kind, you’ve probably had occasion to wonder if some customers are more trouble than they’re worth. Whether too high-maintenance, too low-value, or a bit of both, there have probably been times where you thought you’d probably be better off without them. In my case, there have been a couple occasions where I did some informal cost-benefit analysis and walked away from a customer. You hate turning down money, but sometimes it makes sense.
Of course, I’m not a big-time consumer retail and services company, either. If I were, I’d think long and hard about taking the drastic step that Sprint has taken.
Sprint stands by its decision to ‘fire’ customers
– Drops 1,000 customers who company says call customer service too much
MSNBC staff and news service reports
Updated: 10:20 a.m. MT July 10, 2007
NEW YORK – Sprint Nextel Corp. isn’t apologizing for its decision to ax customers it determined were calling customer service too often.
The No. 3 U.S. wireless provider with 53 million customers, which recently launched an advertising campaign to attract new customers, is disconnecting more than 1,000 subscribers for calling its customer service lines too often and making what the company called unreasonable requests. (Story.)
Customer service issues are nothing new to Sprint – or anybody in the US wireless sector, for that matter. So I immediately find myself wishing I had access to the records of those fired customers. Plenty of people out there are unreasonable, to be sure, and when you get high drain from your lowest value customers it’s easy to make the cost case for cutting them loose. I once had a client whose top-tier call center reps told us they were spending upwards of 90% of their time on the customer segment that generated the least revenue. Our recommendation was something like “remind us again why you have this program in the first place?”
On the other hand, maybe a lot of those pissed off customers had good reason to call customer service every five minutes. Hard to say.
In any case, in a world where executives can’t say hello without working “customer service” into the greeting somehow, this is a dramatic step. It sends a clear message to its remaining customers, and perhaps the wrong message. I can also imagine the marketing folks at Verizon, AT&T, SunCom and Alltel having a field day. “Sure, sign up for Sprint. You’ll love your service … if you know what’s good for you.”
In the short term there’s no doubt that the move makes solid cost sense – and Sprint is a company with a history of 20/20 short-term vision (between now and the end of the quarter) and abject blindness beyond that. We’ll know in a year or two whether this was a good move.
Analysts will be watching closely, and if it pans out in the longer term expect some other companies to get more aggressive about turfing bad customers.
Then the fun begins. Because somebody will share a customer list with a company in another industry, and somebody will be denied service (maybe health insurance?) because the company knows that the person in question is a persistent pain in the ass.
At that point the show will begin in earnest and an army of lawyers will be able to buy bigger homes and send their children to even better colleges than before….