For industry accused of arrogance, pinnacle of conceit: Customer comes last at Sprint Nextel

This post could be entitled Disasterous Customer Service Experiences Part X, Y and Z. The ultimate worst example of sheer lunacy, moronic and near sadistic customer treatment, by Sprint Nextel.

(CORRECTION 6 hours later - A Boston Globe article had Sprint Nextel representative state the minimum level was 40 calls. A reputable web source had said 25 calls which I first quoted)

CNN has just a few moment ago reported that Sprint Nextel, in its infinite wisdom, has sent 1,000 of its customers a letter informing them that because they have placed too many calls to the calling center asking for help or complaining about the Sprint/Nextel services, they are terminating the customer relationship.

Note - these are fully paid up, loyal customers, not delinquent customers.

Yes, Sprint/Nextel has now set the bar for the most abusive customer relationship management decision ever. Not so much as setting the bar, they have risen it miles above what anyone in any industry before has deemed reasonable. This is so beyond arrogance and conceit. I have no word for it.

Oh how many is too many? 25 40 calls per month. Less Little more than one per day. If you have a problem that your operator has promised to fix, but for some reason it isn't fixed in the time promised - ie the problem continues, wouldn't you be tempted to call them every day until it was fixed? Like say, network coverage problems? We've all been there at some point in our phone service, messed up call center, wrong promises (or misunderstandings), not expedited complaints, return calls, etc. And then yes, I know of many friends who've been in a situation to have to call back to the operator on many consecutive days to try to get promised fixes until they were accomplished. 25 40 calls? Sprint Nextel cannot accept one call per day from - legitimately upset or curious (or slow learner) customers totalling 1,000 - out of what, 55 million customers for whom they provide calling center support? This must be the biggest black eye, biggest own goal, biggest fumble in marketing ever.

For Non-American readers, please know that Sprint and Nextel have merged recently. I am sure there are reasons some customers have had reason to call about issues with that. Note that cellular networks are hideously BAD QUALITY in coverage in America (being the backwaters of mobile telecoms, the cave man region of the world, even Eastern Europe is ahead of America and several individual Latin American countries are ahead of the USA). There is honest real reason to complain just by those matters, anyone who has driven in the USA attempting to call on any cellular network knows there are serious problems.

But what people outside of telecoms don't know, is that also the wireless telecoms industry is habitually hemorraging money, with "revenue leakage" globally on a 10% level - meaning mostly they forget to bill us the right amount, but also that often they overbill us - many large corporations will measure traffic and compare to bills and then threaten to sue carriers/operators for overbilling. All carriers/operators have revenue leakage, good ones have diminished it to about half that number, nobody reports zero revenue leakage, and the global giant accounting firms, the Deloittes, KPMGs etc do revenue leakage audits regularly for the carriers/operators. So it is TOTALLY commonplace that some customers have wrongly billed items on their phone bills. These are all valid REASONS to call and complain.

And then our industry is under enormous change. Going from 2G to 3G, going from voice services to data services, selling picture messaging, video calling, music downloading, mobile internet, wireless TV, cellphone gaming etc. And the operators are notoriously poor at informing customers what are the true costs of given services, eg an MP3 song costs x but the data traffic will be "additional" without a specific commitment. A video game costs y, but the data transmission costs are extra. Does my package allow me to download this. What if I do that, how much will it cost. There is EVEN MORE reason to call and complain.

And yes, "those who complain the most" - first of all who complains the least? The person who is LEAST likely to adopt any of our new services where the future of Sprint/Nextel would be. It does not follow that those complaining most automatically use all the new services, but if you only use voice, you have very little reason to worry about gaming or picture messaging or music service enabling (one call), problem in first time use (second call), question about interconnect with rival network where my best friend is on (third call), question about strange item on phone bill (fourth call), question about rival network offering with a feature not obvious in our service (fifth call), problem enabling the old service onto my newer phone after upgrade (sixth call)...  So if I'm a new user of just one of the newer data services, I suddely "average" six more calls to the calling center than the old grandma who never calls on her phone, uses it only in the car as safety phone..

Now imagine a young, hungry, IT savvy heavy user. Who is heavily into the internet and social networking, and very much wants to explore the mobile internet. Flickr uploads, MySpace profiles, music, ringing tones, games, coupons, payments, on and on. Then assume its a young user, with plenty of honest real concerns about managing a budget, wants to be clear what things cost - and yes, bear in mind, this industry is hideously bad at reporting all costs clearly and accurately. If you get heavy users, there are VERY MANY instances when you might be inclined to call the calling center. And if the calls to the calling center are free, it does make sense to call, perhaps to check on how much of a balance you've run up this month already - or how much is left on your prepaid account.

And there are the handsets. The average cellphone user replaces the phone every 18 months. 28% of all mobile phone owners have two or more subscriptions, usually on different networks and often with second phones. So it is very possible to want to call the calling center when you get a new phone - on your network or a rival - the more you replace phones the more reason to call. How do I move my numbers, why is this service not like it was. What happened to my voicemail or what is my messaging center or where do I get WAP settings etc. The person who replaces phones more often - heavy users - have more reason to call. And even the exact same model Nokia or Motorola may behave differently on a rival network - reason to call.

And for our non-American readers, it is surprising to find out that American mobile operators (carriers) often "cripple" features from phones such as removing WiFi etc. Yes, some other operators have done that outside America too, but in the USA this is most prevalent. So a given feature of a phone, that is perhaps in the user's manual or talked about on the web, is not actually available on the phone you just brought home. So again more reasons to call.

And the iPhone !!!  I'm sure many heavy users would have reason to call Sprint Nextel over the last few months, when the iPhone hype was growing, to ask if Sprint Nextel would offer the iPhone (and why not). Perhaps to call back if some rumor emerged, etc. Or perhaps to call again, to voice a strong desire for that iPhone, etc.

Part of those calls are legitimate calls for help - to USE services and get MORE usage of services the customer is having problems with. Its not like turning on the electricity in the home by hitting a light switch, etc. New services for cellphones can be very complex and confusing.

And part of those calls are legitimate COMPLAINTS when Sprint/Nextel has disappointed its customers. Not just the one who calls to complain !!  Behind these callers are hundreds more who haven't called perhaps noticed the problem yet, or are not as inclined to take action, or are for example more accommodating to let some problems slide or will wait to see if a given problem disappears over a few days before considering calling to complain. The early complainer ALLOWS FOR BETTER SERVICE by identifying legitimate problems.

If it was not for complaining customers, there would be no development of our services and products. Bill Gates likes to say "Your most unhappy customers are your greatest source of learning."

Any intelligent, modern customer-focused organization will teach calling center staff to deal with complaints professionally - and to treasure the inputs from complaints.

But Sprint/Nextel is behaving like the carricature telephone lady that comedienne Lily Tomlin used to play, when she would say in her comedy bits "We don't care. We don't have to. We're the phone company."

But that was funny in a time when AT&T was a monopoly. Today Sprint Nextel is living in a modern, competitive market. And in this decade, Sprint Nextel is also subject to the new rules of Digital Community. It is not an accident of spelling, that our bestselling book is entitled Communities Dominate Brands.

Also let me be very clear about this. There is nothing wrong with a company seeking out which customers it does not want to renew and take actions to de-incentivize those customers. For example, nothing wrong, in finding 1,000 customers that Sprint Nextel does not want to serve, nothing wrong at all in principle. How to do it? Offer incentives for the good customers to stay such as price discounts and handset subsidies and only apply those to "preferred customers". Name the remaining 54 million and 999 thousand customers as preferred (with one criterion being reasonable level of use of calling center) and leave these targetted 1,000 customers without that benefit. Some will eventually get the message. Let them churn with normal churn rates.

Or if you want to be more pro-active about ridding them now, then do it with some dignity and fairness. Like in your letter you say you feel you are unable to satisfy the customer, fine, then tell the customer you offer them the chance to leave the network with no penalties and covering their number portabilty costs. Not by a unilateral edict but by giving the customer the choice.

Don't kick them ruthlessly out like this with no say in the matter. This is barbaric. This is Soviet Union era concepts of customer service (during Soviet times the Russian airline Aeroflot actually had a guideline for staff that they were not allowed to smile.)

We have a couple of times invited our readers to join in blogosphere revolt against a company. The results of the wrath of the blogosphere are swift and brutal as history can show from the prototypical case of Kryptonite. This step by Sprint Nextel is sheer punishment of paid-up loyal customers.

We at Communities Dominate blogsite will not stand by this. We immediately ask all fellow bloggers to report on this story and condemn Sprint Nextel. Even for an industry with a reputation for arrogance, this is the pinnacle of conceit.

So you, dear reader, if you are also a blogger (or reporter), we ask you to immediately join and report on this deplorable unilateral attack by an American giant against good customer practise.

Sprint Nextel must immediately apologize and invite all cancelled customers to return. We cannot allow ANY business to arbitrarily punish customers who call the calling center "too much above the average"

Shame on you Sprint Nextel !  This will go down as the most moronic marketing move by any company ever, worse than New Coke. The Marketing Management at Sprint Nextel better offer their resignations and the CEO better accept them. This is shameful for the whole profession of marketing, not just wireless telecoms.

We will monitor this story and report on its developments. I will dig up Sprint Nextel's CMO name etc next. But all of you, please join us, blog about this now and condemn this abusive action. No company can get away with this. Not in this new age when Communities Dominate.

FIRST UPDATE - the story gets worse (what else is new concerning Sprint?). Apparently also customers who "roam too much" are being kicked out. For example long-term Sprint customer who is with the army, was sent to 2 month posting to another USA State for training. That region was part of Sprint's network map coverage - ended up not working well, and the phone roamed to other American networks. Now Sprint Nextel tells this customer that their long customer relationship is terminated, get a local contract. A local contract there? In a temporary location, in a State he will only live in for 2 months of his life, never again, but where the soldier must serve (and where logically he has only his mobile phone for practical communications). What is the bizarre logic in this. The soldier's original posting reported now in many sources but original posted at Sprint Users Forum

SECOND UPDATE - I've written an Open Letter to Sprint Nextel urging them to reconsider and fix the matter now

THIRD UPDATE - I've now posted a follow-up piece. The story is far worse than I reported. Please read this Follow-up and you'll see.

UPDATE July 13 2007 - Even more revellations about America's worst company including independent verification that a common problem can lead to 40 calls, Sprint calling centers themselves giving wrong info and consumer protection agencies now mobilized; plus a funny joke, in "Sprint 1,000 story expanding."

UPDATE Oct 10 2007 - Sprint Nextel CEO Gary Forsee forced to quit as Sprint Nextel's customer growth stalls and company experiences severe customer defections as the stock price tumbles. We report about it in "Follow up on Sprint 1,000 - CEO Gary Forsee quits"

UPDATE Jan 21 2008 - Sprint Nextel exodus of customers gathers pace, stock price crashes to under half what it was before the Sprint 1,000 and the company fires thousands of employees and closes over a hundred stores as we report in "Nightmare Continues for America's Worst Company."

UPDATE Jan 24 2008 - The new CEO has fired Chief Marketing Officer Tim Kelly effective immediately. I've blogged about it at "Poetic Justice at Sprint Nextel"

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