How To Lose 1 Million Customers In 3 Months
Everything happens for a reason, especially in business. Companies don’t go out of business or lose customers for reasons totally beyond their control: there’s always a reason.
Most likely their service stunk; or they had really bad management. Perhaps their prices were out of whack with the value, or lack of same, they provided. But believe me; it has nothing to do with bad luck, bad economy or competition. As with anything else in life, when things aren’t going the way you hoped they would, your best bet is to look in the mirror. That brings me to Sprint.
On MarketWatch, there was an article last week titled, Sprint loses more money, customers.
The article began:
“Sprint Nextel Corp. on Monday said it lost more than 1 million of its most profitable customers (about to be 1 million and 1, I might add) in the first three months of 2008 as the company’s net loss widened in the most recent quarter.
Sprint has lost millions of customers to rivals in the past few years owing to poor customer service, a less appealing selection of phones and snafus related to it’s $35 billion purchase of Nextel in 2005.
Chief Executive Daniel Hesse, hired in December, has already taken a number of steps to improve the company’s financial performance and its relationship with customers.”
Well, you could have fooled me.
I have been a Sprint Wireless customer for over 5 years, which definitely puts me WAYYYYY above average. However, as it stands right now, I will be an ex-customer when my contract runs out in February of ’09.
I have four cell numbers under contract; one for each member of the family. This last contract started back in May of 2006. It had 2100 anytime minutes per month, unlimited nights and weekends, no roaming charges and was a “Fair and Flexible Plan,” meaning if we went over our minutes we would only be charged $5 for each 100 minute overage.
A few months later I realized we didn’t need 2100 anytime minutes (I use Skype far more than my cell; better value), so I downgraded the plan to 1400 anytime minutes per month. Little did I know (because nobody ever bothered to tell me) that when I changed my plan Sprint extended it another 2 years, meaning instead of my plan expiring in May of ’08, it won’t expire until February of ’09.
On top of that, when I received my latest bill I noticed that I was charged twenty cents per minute extra for going over my minutes: What happened to Fair and Flexible?
So I called Sprint Customer Service, something I really hate doing, because there’s never any way to do it quickly. I was told that when I changed my plan I lost the Fair and Flexible component because that service was no longer being offered at that time (Probably because it was a good thing for the customer). I asked how come I was never notified of this at the time and naturally I received a stupid answer. I was also told that Sprint no longer offered the Fair and Flexible plan (remember this part; it comes up later).
Now, to add insult to injury, Sprint announced a couple of months ago that as a service to their customers, in their latest effort to stop the bleeding, they will no longer penalize customers and extend their contracts just for changing their plans.
Now here’s a real pet peeve of mine!
Don’t you just hate it when companies treat new customers better than they treat their long term loyal customers? Cellphone companies are notorious for this.
So now I’m really ticked and I’m going to complain. I decide I want to write a letter to Daniel Hesse, the new CEO, since he claims he wants to improve the company’s relationship with its customers.
But now there’s a problem: I go to the Sprint website and nowhere on that website is there an address for their corporate headquarters or even an email address for the CEO. I guess Mr. Hesse, like so many other executives of bad companies only wants to improve customer relations if he doesn’t actually have to be in contact with any of us.
So once again I called customer service, only this time I started my stop watch. I told my story to the Customer Service Rep and the first thing he said was, “Let me see if I can get you back on the Fair and Flexible Plan.” I know what you’re saying, “I thought the Fair and Flexible Plan wasn’t being offered anymore,” and you’d be right to think that because that’s what I was told.
Don’t you just love it when two people from the same company tell you completely different stories? Remember what I said at the beginning; there are always good reasons why companies fail.
Naturally, I couldn’t get the Fair and Flexible plan but that didn’t matter; I wanted Sprint to do something for me or I would cancel my service when my contract was up. This young man said he couldn’t do anything for me but would transfer me to someone who could and he put me on hold while he went to contact that department.
After about a 5 minute wait I was put in touch with a woman who had no idea what I was calling about. Wouldn’t you assume, as I did, that when the first person said he would transfer me to someone who could help me, then put me on hold while he contacted them that he would have relayed the problem to them? Well, you, like me, would have been wrong. I had to tell my story all over again (another pet peeve).
Now I had been on the phone with Sprint for 24 minutes and had accomplished nothing, so I said to this woman, “Look here’s my story, the other person I spoke to said you would help me. I don’t have time to stay on the phone with you anymore, I’ve wasted enough time already. You have all my information. If you want to do something for me, call me and let me know.”
And I hung up…
It has now been over 24 hours and I haven’t heard from Sprint. What’s the odds that I never will? Probably, 1 to 1? Like I said before and I’ll say it again: there are always very valid reasons why companies fail.
This article is so true. I was an employee of Nextel at the corporate office. I was the sales assistant and receptionist. I took my job very serious and heard so many complaints regarding billing issues. I always took the extra effort in resolving unhappy customer. After the merger with Sprint/Nextel, I had lost my job. Part of the package that was given to me was that I was able to keep my employee phone for 1 year then after that I would get special discounts. Well, after that year was up, I left the company all together because of the poor customer service. I had billing errors every month and the right hand didnt' know what the left hand was doing at Sprint. The above article is so true. It seems like people don't want to take the extra inititive to furter dig into ones account and try to resolve the issue. Instead, they would rather make them more mad and cancel their contract and move on.
Alberta,
Thanks for the great comment. It's always good to hear from someone who was on the inside. And you're right about the billing errors; I have them every month too.
Dear Warren,
You nailed it in every way. Sprint's problems are too numerous to detail. Their answer now is to focus on the Nextel network. But rather than segmenting it as a special network for business users, they will instead gut it completely for use as a Boost Unlimited product. Whatever loyal business users they had on the Nextel side, the over-usering Boost people will obliterate network performance.
I'm currently on SERO (Sprint Employee Referral Plan) and haven't been unhappy with my service. I've had no billing issues in the two years I've been on contract. But my term ends in January and will not be renewing. Why you might ask? Simple. They treat new customers better than they do their existing customers. Why should I pay MORE for a new phone and extending 2 years on a contract when someone walking off the street gets the phone for a cheaper price. I also have a Verizon account. Their NE2 (new every 2) gets me a new phone every two years for the same price as people walking off the street, plus an additional $100 off. There is a reason why Verizon is poised to be the #1 wireless company after the Alltel integration. ATT has the iphone. Verizon has the network. Sprint should have focused on being the price leader. Sprint's network has the same problem that T=Mobile does, PCS 1900 buildout problems. Luckily Sprint falls back on Verizon and other rural 800 CDMA carriers to supplement its network, even in-market. T-Mobile generally does not offer in-market roaming.
The future looks pretty grim for Sprint. They price their service as if they were Verizon. They had an opportunity with Hesse to shake up the industry, but WiMax and the Instinct are too little, too late. I'm in Washington DC and am anxious to see how well Cricket's deployment will be when they launch here. If Sprint had followed Cricket and Metro PCS's lead, they could have caused a true pricing war with Verizon and ATT. I don't think that's possible now. Their credibility is shot.
- John