Sprint fires 1,000 customers: let the games begin…

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….

Advertisements

11 responses to “Sprint fires 1,000 customers: let the games begin…

  1. Pingback: Did Sprint listen to their angry customers before they “fired” them? « The Definitive Anthology of Rotten Procedures·

  2. Great post! Someone should give the Sprint Senior Management several copies of Jan Carlzon’s book “Moments of Truth”…they might discover it makes sense to listen to the customer bacause what he is telling you will make you a better company.

  3. If I had access to all those customer records, the first thing I’d look for is how they became customers. Sprint is a company that has in the past gone WAY out of its way to attract low-value customers. Not sure how much they’ve improved in this arena, but once upon a time they seemed to measure their success by raw new customer adds, and they’d put programs out there that were guaranteed to bring the worst possible customers through the door. I wonder if I’d discover that an inordinate number of these “bad customers” were products of stupid marketing programs in the first place.

    Of course, this is one of my bugaboos – companies that don’t think through to the long-term implications of their actions.

  4. Like Sam, I’d sure like to see those records. Let’s all understand that there are people who will call CS because they are lonely and have nothing else to do. The way I see it, that’s abuse of a service. You may be paying for CS, but you’re not paying for a full-time phone companion. Personally, I doubt this is a case of Sprint’s deliberately rejecting those who need legitimate assistance. I will be very interested, however, in how they handle the publicity around this. Their message is rather complex, and it will be up against a simple and visceral counter-message: “Sprint will cancel you if you use their CS.”

  5. Exactly, JSO. Imagine that you’re an evil marketing messaging expert at AT&T and they walk in, put Sprint’s move on your desk, and say “what can you do with this?”

    I’ve seen your mind at work. Sprint better have some awfully good folks standing at the ready….

  6. No doubt, we’ve all had frustrating experiences with our wireless providers. So it makes sense to assume one more corporate giant’s myopia; sacrificing their brand for the sake of a few pesky callers. Yet, its possible that Sprint has made a smart long-term move here. If you’ve ever had your hand in customer service, you know how crippling even a sprinkling of lonely callers or customers who refuse to be satisfied can be. We have more power as consumers than ever before. The whole face of business is changing, especially from a marketing perspective, because of the force of the consumer. Perhaps its time we challenge some of these old notions about corporate giants and defenseless individuals. In the end, Sprint is a business and American consumers have countless options.

  7. First of all, who is Sprint using as their customer service? Are they outsourcing? If so, how are they monitoring the complaints? Do they see alot of overlapping in the same issues…

    Sadly…they could use this as a benefit to come up with a new product that meets the needs of all these disgruntled folks.

  8. Hi Mindy. When I was consulting for them a few years back their customer care was all (or mostly) in the US, but they may now have offshored some of that. I don’t really know. My impression, based on a pretty deep dive into how they operated, was that their support folks were pretty good, but that they were hampered by a laundry list of systemic issues that they had no control over. I know that company policies actively created a lot of the hurdles they faced then, and that makes me wonder what kinds of policies I’d find in places now if I were to migrate back up the channel a few steps.

    I have no doubt that some of the turfed customers are irredeemable. But I also would be asking a basic question of them – what marketing policies do you have in place that are attracting these people in the first place.

    The answers are almost always deeper than corporate types are willing to look.

  9. Sprint, like any business, is not going to risk antagonizing its customer base if they can possibly avoid it. If they fired 1000 customers out of 53 million those customers must have been tremendous pains.
    Whoever said “the customer is always right” obviously had not had much experience with the public. I run a small business, and can say through experience that while 99% of the people you deal with are perfectly reasonable, or at least reasonable enough, the remaining few are those who are just determined to not be satisfied no matter what. 1% of 53 million is 530,000, so they “fired” appr .002% of their customers, if I did the math right. I can assure you that if you have that many customers, that percentage deserved to be let go a long time ago. If they start whining or talking lawsuit, just remind them that you can publicize whatever it was that got them canned. Lets face it, they probably deserved what happened, and there does exist the remote possibility that the experience will get them to clean up their act some.
    Consider it a learning experience.

  10. Hi, Sam. No doubt about all this, but like I say, there are a couple issues to consider. The first is the marketing angle – what can a competitor do with this when they’re advertising against you? And second, what did you do to get these people in the door in the first place?

    This is partially about the .002%. But it’s also about the next 2% up the ladder, and the message is clear. Shut up or we’ll turf you.

    In other words, when I look at this, it strikes me that the canning of 1000 customers itself is the least interesting and important element of it all.

  11. Pingback: Comcast cuts off customers who cross invisible bandwidth line « Black Dog Strategic·

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s