Sprint to Customers: You’re Fired
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I’m starting to worry a bit about Sprint. I’ve been watching the trainwreck that has become the wireless company since the purchase of Nextel and I can’t help but wondering how much longer Sprint is going to be allowed to spin its wheels lose traction in the marketplace.
When Sprint purchased Nextel, I thought it was a splendid move. Sprint had the highest revenue per residential customer of any big cell phone companies. Nextel had the walkie-talkie feature that was fantastic and cornered the market on businesses large and small. The convergence of the two technologies would allow Sprint to integrate Nextel and allow Sprint’s customers to take advantage of the walkie-talkie feature.
Except someone forgot to tell Sprint all of this. They’ve never integrated Nextel and this week decided to drop the Nextel name from their marketing campaigns. The two technologies still co-exist, but were never integrated to the point that dropping the Nextel name would make sense. Maybe this is the beginning of the actual Sprint-Nextel integration?
As part of the operating confusion over integrating the companies, Sprint has steadily declined and has fallen behind the other three major players in the US mobile market. While they are still adding net new subscribers, their churn rate has jumped noticeably in the past year and their revenue per customer has dropped. The CEO has been under fire from investors to cut costs and drop a planned rollout of WiMax, the next generation of wireless broadband.
So, if you are losing customers to your rivals and under pressure to increase profits from Wall Street, what’s the one thing you don’t want to do? How about piss off your customers? That’s exactly what Sprint is doing by telling 220,000 customers to find another carrier by the end of the month or lose their wireless number altogether. At least Sprint isn’t making them pay the Early Termination Fee!
Nice job, Sprint. Even if they are high maintenance are they costing you more than $30/month (the lowest service plan)? I highly doubt it since you have outsourced your call centers (as an ex-Sprint customer I know this). Have any of your executives been to b-school where they teach that each unhappy customers tells 9 friends about their experience. Did you not think that this would get out?
As I mentioned, I’m an ex-Sprint customer but that’s only because their network did not cover areas in Missouri that I frequently travel. I have no beef with the company, I would have been perfectly happy to stay with Sprint. I just can’t help but shake my head at a company that has made so many recent mistakes and allowed itself to fall so far behind it’s rivals in an industry where customer service is hardly the norm.
I’d imagine this will also lead to a marked increase in call volume as unhappy customers flood Sprint’s call centers hoping they too will be dropped from their contracts. Sprint may not know what it has started.
July 10th, 2007 at 12:10 am
What makes you think these major users of customer service lines haven’t already told “9 friends about their experience”. There comes a time when it’s necessary to cut your losses, and it doesn’t take many calls (even outsourced) for the profit margin to become zero.
Not all of that $30/month is pure profit.
It’s a smart business move, and people generally don’t let news like this affect their choice of cell carriers. Just look at how easy it is for airlines to keep attracting customers after incredibly crappy customer service.