Sprint Nextel Corp. (NYSE: S) has taken quite a bit of flack when it disclosed last week that the wireless carrier was canceling some it its customers that called Sprint customer service too often. I'm quite sure the math is there: unless those customers rack up $200 in monthly cellphone bills, calling X number of times in X period of days may indeed cause Sprint to lose money on them. After all, call center employees are not free, and calls into those massive call centers cost $3 per minute and up.
The wireless carrier is now defending its position to cancel some of these customers. The rumor is that those who made 90 or more calls in a six-month period may be on the shortlist to get that friendly "you are terminated" letter from Sprint. In total, Sprint sent about 1,000 letters out on June 29 to the people that Sprint says were simply too expensive to service. The negative publicity, though, is far more costly.
So why did the carrier make this move?
Are these customers reflective of inept customer service that requires multiple calls or are these people who call over and over until they get what they want? Sprint sides with the latter, saying, "These accounts have been researched very carefully ... we feel strongly that the decisions we made, we stand by them. These decisions weren't made lightly."
This tells me that the 1,000 accounts that were given cancellation notices weren't just picked from a computer flagging system. With these canceled customers calling 40 to 50 times a month in some cases, Sprint believes other customers who may call once or twice may be receiving substandard service (as in wait times). Both AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) say they do not cancel customers due to customer service call amounts.
Was this the best-timed move Sprint could have made since it continues to lose customers every quarter while AT&T and Verizon gain them?
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Reader Comments (Page 1 of 1)
7-10-2007 @ 10:30AM
beanspants said...
90 calls * an average of $8 per call = $720 just in customer support. the margins on phone bills just aren't that great, so i'm sure they are loosing money. The average phone bill is only around $70, so $70 * 6 months = $420, so that's approximately a $300 dollar loss per customer.
7-10-2007 @ 10:49AM
Bobby E said...
As a former Customer service representative of 2 of the top 5 companies listed as low ranked in customer service (AOLTW and Comcast) and with several friends who work for AT&T (BellSouth) I believe your article has missed the point as to why the customer satisfaction rating is so low. Please allow me to add some insights. To begin with AOLTW has closed most U.S. call centers so therefore when you call you get a foreigner (India, Mexico, South Africa, Israel, Phillipines). While this saves the greedy corporate monster millions in salary it pisses off customers. While I was customer service team leader I can’t count the number of escalated calls I took from customers who were calling ONLY to complain about having to talk to a foreigner. Then when they filled out customer service satisfaction surveys they graded negatively not based on the product or the service but based only on the fact that they don’t want to speak to foreigners (especially on a product aptly named AMERICA Online). While TWX stock continues to stagnate the head honchos are making millions and taking lavish “business trips” that cost millions more annually. Meanwhile they’ve laid off thousands of U.S. workers who currently and will continue to spread bad juju about any TWX products. Other than the occasional Warner Brothers or New Line Cinema movies I’ve also washed my hands completely of TWX and its products and so has most of my extended family.
The problem with Comcast is that each division of Comcast is run by a General Manager who has the ability to do just about anything they want. So what you get is an inconsistency that crosses all state lines. If I get a great deal from Comcast it won’t do me any good to tell my family members because that deal is only for my area. They even run national commercials that don’t apply to everyone. The worst part is that they pay on the low end of average for call center employees. Of course all employees know this from the start and those that don’t soon find that they can make more money doing the same job in other call centers. Bottom line? High turnover rate which means that when you call Comcast the chance of speaking to someone who has been around awhile is slim and the chance of speaking to someone 2 weeks to 2 months out of training is good. Also, those that choose to stay working at Comcast for whatever reason (lazy, loyalty, anal retentive, doesn’t like change, finally got their 8 to 5 Monday thru Friday) stay with a bad attitude because they’ve seen their peers and friends leave to do the same job somewhere else for more money.
Finally, AT&T (BellSouth). While I don’t work there and never have I have many friends and previous coworkers who currently work there or who have already worked there and quit. This is probably one the best paying call center jobs in our fair city (Jacksonville,FL) . But like all things you have to take the bad with the good. In order to make the best money you have to work a split shift 9 to 1, 3 hours off , 4 to 8). Sounds easy but it turns your days in 12 hour days. Also, they don’t run a 24 hour customer service center so your first 2 hours of the day is spent dealing with highly irate people who have had a problem unresolved for the last 12 hours, which sets the tone for the rest of your day. Also, there is very little (if any) time between calls so you go right from one angry person to another never really getting a chance to clear your head. It would seem to most people that that is what call center people get paid to do. True in theory but in reality nobody can take being beat up call after call without it affecting them in some way. Of course the penalty for logging off your telephone after a call to collect your thoughts is termination. So what is a person to do? The only thing they can do. Give mediocre service, make promises that won’t be kept, try not to engage the irate customers too much and find any reason to disconnect the call, at the same time try to engage friendly customers as long as possible so you receive fewer calls and avoid the hassles.
The long and short of it all is that call center workers take the verbal beatings from the customers every day while sticking to rigid rules set up by corporate pigs who have never spoken to a customer in their life. All the rules, ideas, and company policy come from the big wigs. They often ask for ideas from employees but it is usually only lip service. Until a vice president of something makes the suggestion it has no wheels. Then when the VP suggests it all of a sudden it’s a great idea and everyone is behind it. Of course if the idea fails the VP leaves “to spend more time with their family” while cashing out hundreds of thousands in stock options. Meanwhile all the “yes men” who backed him up act like they knew all along that it was a doomed project and gladly accept their promotions and lateral transfers to fill the void created by the sudden departure of the VP of something. Back in the trenches the call center employees trudge along and wait for the new policies of the next VP of something to come down the pipe. As far as companies that use foreign call centers. Well, just so you know. America and Americans hate talking to foreigners for customer service. If you think your saving money by using cheap overseas labor you’re wrong. Most Americans know that corporations are making big money at the top but the little guy makes enough to get buy (maybe). Every time they speak to a foreigner, in the back of their mind they’re thinking how much they can’t stand the person they’re talking to (although it’s not a personal attack) so sub-consciously it’s already a bad customer experience. When asked how their customer service experience was they will automatically respond that it was negative no matter how it was. Lastly, consumer advocates like Clark Howard or Ralph Nader always advise people to ask for a manager to get their way. Unfortunately, that trick has been run aground and because of people like that, little by little, managers are desensitized as well which means that even legitimate concerns get lumped together with all the others. I can tell you as a customer service manager that people who refuse to speak to a customer service representative and demand to speak to a manager are the most likely to get nothing. Also everyone in the call center works off rules that are put in place 1000 miles away so it’s not as if anyone in the call center can change the rules ( including the General Manager). In most places phone reps are not even given a phone number to a corporate office anywhere. Customers are advised to visit the company website to send complaints to corporate. If the customers were as adamant about tracking down a corporate number and “speaking to the president” as they were about squeezing a $30 credit out of a customer service rep they could solve everyones problems in a few short months. Believe me, if corporate honchos had to listen to customer complaints for a week they would find a way to resolve their concerns. Until then it is what it is and will not change. Corporate boards will go through phases where they invest heavily in customer service to build goodwill and expand product lines. But when times are hard call centers are the first in the budget cuts. What’s worse is that that simple logic is understood by even the dumbest call center employee so we all know that our jobs aren’t safe. Also, companies don’t really want long term employees in a call center, they become too expensive. For example, I will use my current salary of $40,000 annually. If I stay at my position for 20 years and earn 3.5% a year raise then I would be making $70,000 annually in 20 years. That’s just too much to pay a call center supervisor. That goes for every employee in a call center. The longer the stay the more they make. The more likely to become a victim of downsizing. Or as one of my fellow supervisors in my current work place. He worked 10 years for Prudential and was “downsized”. Why? It was cheaper to pay him $20,000 severance and a year of medical benefits to walk away than to keep on the payroll at 50k a year and giving him raises for the next 20 years (including that 401k match). In the end they would have been paying 80k a year for a job that a new college grad would do for 38k. Fair? You be the judge.
7-10-2007 @ 12:01PM
sinistr2 said...
This is why Sprint won't catch up with the other providers. The others are not quite this bad, but they have problems too. Companies don't seem to be able to simply appreciate the business that their customers give them. They instead seem to feel that it is their God given right to have that business regardless what they do. I have been an uninterrupted customer of Bellsouth Mobility/Cingular/AT&T for 25 years. I didn't have a choice when I first got service from them because they were the only provider in my area. I have always bought my own phone outright. I've never seen or received a single perk from my years of business with them. I had an old technology TDMA phone that was serving me well and for this 'sin' I was penalized by an additional $5 service charge per month which really left a bad impression on me. When I did change phones, I was assisted by the rudest customer service rep at the AT&T store that I have ever come into contact with in my lifetime. That brings me to another thing about AT&T, they literally take people off the street and give them unlimited and unfiltered access to personal information about customers. Why does a customer rep who is fixing my voice mail, selling me a battery, or changing my service plan need to see my SSN or any of my personal information? No wonder ID theft is so easy! Why do I stay with them? They still have the best coverage in my area and most of the people I know use this carrier. If there was a better alternative, I would switch in a minute. The only thing I can say for sure is that Sprint is off my list of choices.
7-10-2007 @ 2:11PM
beanspants said...
Sinistr2,
For fixing your voicemail or changing your plan, they need something only YOU would know to verify that it's YOU that's changing YOUR information, ergo.
7-10-2007 @ 2:27PM
Warren said...
Firing these unpleasable customers will allow them to provide better service to the others. Smart move.
7-10-2007 @ 2:40PM
Sherryann Shupe said...
My experience with Sprint has definitely been less than desirable! Sprint calls customers and offers deals that aren't even for your area. Then they neglect to inform you that you don't have that service so when you take advantage of what you thought you had, your bill is a whopper at the end of the month! Representatives also tell you when you change plans that you have everything you had before plus the new service. NOT SO!!! My son's bill has been atrocious because of these problems and finally he just switched companies. I still have Sprint because of my contract but when it is up, I definitely intend to change companied also.
7-10-2007 @ 2:59PM
Belisama said...
I've been a Nextel customer for years with two seperate contracts for my husband and I. This last time when our contracts were up to renew we tried to, in their words, migrate to Sprint. It took me a total of 6 days, with spending hours on the phone each day (most of the time on hold for 20 minutes to have someone tell me I had called the wrong number or that they didn't know what to do) to get this accomplished. Also, they tried to tell us that the $150 you're suppose to get after a 2yr contract wasn't going to be available to us until other 4-6 months went by, after our contracts expired (and yes we were willing to renew for 2 more years). In the end, I finally got someone that knew what they were doing and was able to change mine to Sprint with them saying that I can't do that with my husbands until 6 months later (for no reason mind you). So, I did that and got my new phone. Then I spent about 4 hours on the phone trying to activate my new Sprint phone because they all kept telling me that I just had to put my sim card into it. It doesn't take a sim card though and no matter how many times I said that it didn't matter to them. Finally I got a wonderful woman that gave the number of who I needed to talk to because my entire account needed to be changed from Nextel to Sprint (and not a single person had said this until now). She stayed on the phone with me and got me to the right person. The guy I ended up talking to was also wonderful and went through everything and got it down in about 15 minutes. The funny thing about it was that this guy told me that there were only a couple of people that know how to "migrate" accounts. Apparently even though Sprint has owned Nextel for 2 years they haven't done much in the way of helping out their customers when they want to switch with only having a couple of people doing this. No wonder people have been leaving them. Maybe I should have. No wonder people have been calling their customer service a million times. Nobody knows what they're doing. The entire time I was trying to do this, I couldn't tell you how many times I was hung up on by a Nextel or Sprint rep. It's ridiculous. Both of their customer services are horrible.
7-10-2007 @ 3:48PM
Cinbad said...
I too have called both Sprint & Nextel only to be put on hold for long periods, to be disconnected after waiting for more then 20 minutes)and/or to be transferred to the wrong department where the rep cannot/won't assist me. This is not customer service; it's called THE RUN AROUND. I can't help but feel that they do this intentionally to get you so aggravated that you no longer want to address the issue you originally called about. I spent so much of my time trying to get a billing issue (literally two days of phone calls!)addressed that I finally sent them a bill for my time and their lack of customer satifaction. I'm still waiting for my check!!
7-10-2007 @ 4:01PM
sinistr2 said...
beanspants,
Yes, I realize they need some information to determine my identity, but why not just the last 4 digits of the SSN? That and the billing zip is all they ever ask for to confirm ID. In my area they literally pull people off the street to work at AT&T. I saw one drug addict and two people I had fired for theft the last time I was there. That doesn't exactly build confidence.
7-10-2007 @ 5:21PM
willow reed said...
Good Grief, you mean all I need to do to get out of my contract is to call my carrier TWICE A DAY with a complaint?
Not too shabby.....
Sorry, gotta go. Need to call the customer service line!
7-10-2007 @ 5:23PM
willow reed said...
For the record, I have cingular (oops AT&T) and I HATE THEIR SERVICE!
7-10-2007 @ 6:37PM
Ron Miller said...
Two months ago I was encouraged by Sprint to switch my service from Nextel to Sprint. What I thought would be simple turned into hours on the phone, most of them on hold, waiting to talk to somebody. It got so bad, I started keeping a log. Then, my first bill came in at $412. It should have been about $100. It took me 2 hours to finally find somebody who thought they could help. Here's what happened:
Initial call: On-hold for 29 minutes until somebody answered.
Foreign agent: Talked 3 minutes, got transferred to somebody else:
Got lost in transfer, called again, on-hold for 25 minutes until somebody answered.
Talked a few minutes, got transferred.
Talked to new person, got transferred, then lost during the transfer.
Called back in and was on hold for 20 minutes until I talked to somebody, who could understand what was going on and was going to have to call be back later.
Another time I tried to call technical support about setting up my new phone to get emails, etc., and with the same experience and every time I had a new question, I'd have to be transferred, and sometimes lost (probably because I was being transferred between the Philippines and India.)
There were other calls as well, and I will never forgot the one where the service rep promised she wouldn't lose me during the transfer, but she did.
Another told me he would have to transfer me. I told him that if I didn't talk to somebody within 5 minutes, I was cancelling my service. Just within five minutes, he came back and said he had "Eric" on the line to help, then I heard an "oh no, I lost Eric."
My next and final call was to cancel, and when I said "cancelation" to the voice activated system, somebody immediately answered the phone. That person actually knew something and could explain everything: When they tranferred me from Nextel to Sprint, they forgot to close the Nextel account, so my bill had charges for two lines - plus when they set up the Sprint account, they had given me a temporary number, but it became permanent - so I was being charged for 3 lines, when I only had one. Also, my website was messed up and I had two web accounts, even though during one of my calls, it was supposed to be fixed.
The irony is that I was quite happy as a Nextel caller, then Sprint encouraged me to switch, but because of their horrendous customer service, I'm neither now. I've made a few calls to my new service and never had to wait more than 3 minutes and I even got to talk to somebody whose mother tongue is English.
7-10-2007 @ 7:15PM
pat said...
the "next" in nextel stands for "next time i talk to u" because your call will be dropped and u will have to call whomever back. Other than paying takes a nextel drop is automatic. they suck........
it took me over a month to get thru to customer service over one of their billing problems..
7-11-2007 @ 12:59PM
rsears said...
Sprint Nextell, they are overcharging customers on their billing. they will send you adittional phones that you dont ask for . Then they will start billing you for the phones. When you have a phone put on standby, after six months they will start billing you again while it is still setting on the shef in your office not being used. They actually demand you pay the bill regardless of your inquireies. Now they are terminating service because you dont like being billed for something you are not even using in the first place or did,nt want.Customer Service , that is a joke. They are after overbilling for nonexistant service.
7-11-2007 @ 1:00PM
rsears said...
Sprint Nextell, they are overcharging customers on their billing. they will send you adittional phones that you dont ask for . Then they will start billing you for the phones. When you have a phone put on standby, after six months they will start billing you again while it is still setting on the shef in your office not being used. They actually demand you pay the bill regardless of your inquireies. Now they are terminating service because you dont like being billed for something you are not even using in the first place or did,nt want.Customer Service , that is a joke. They are after overbilling for nonexistant service.
7-12-2007 @ 4:03PM
Lisa said...
There is NO excuse for Sprint's habit of dumping military personnel for "roaming too much". None.
7-13-2007 @ 8:18AM
badgolfer78 said...
It would seem to me that someone that unhappy with service provided, to call 50 to 90 times a month, should be looking for a new provider anyway. They shouldn't be waiting to be terminated by the provider. They sure have more time on their hands than I do to be calling that often.
7-16-2007 @ 5:39PM
madwoman said...
I can't believe something like this happen. I have been a customer with sprint for over three years. I on a family plan. Just this month I started to looked at my phone bill carefully to find out that they changed my plan. Instead of $10 per line, now I have $20 per line cost. My younger brother went to to the repair center to get his phone repair and they told him to get a new phone. He was not authorized to sign or change my service and the sprint sales person changed my plan without me knowing. I contacted customer service on Friday and talked to some lady for fifteen minutes and she hung up on. Nothing was accomplish. I am so upset. I am going to the store and see what could be done about this. Maybe the store that my brother went to has a low sales rate for them to fraudulently allow him to take a phone without my permission. I am going to the store this week to talk to the store manager and see what they will do to fix this matter.
7-20-2007 @ 3:28PM
docfeetz said...
I'm also a call center manager and know we can get burned out by "crankypants" types. Also that difficult customers take up an inordinate amount of time. But I also know that when people are feeling like they're being (a) heard, (b) helped, and (c) appreciated, even the crankiest usually come away feeling OK. And they don't need to keep calling as much to make themselves feel better (with the exception of a few truly disordered individuals).
I really don't believe Sprint when they say they've "carefully researched" the fact that these callers are not legitimate victims of poor call center service. If they can't put some callers through to the right person, or if they keep them on hold excessively, if they change people's contracts without telling them (or by burying the change in the fine print), or if they give erroneous or misleading information that later results in inflated bills, (as we keep hearing about), then in my book they can't claim any higher ground in the realm of customer service. There's no credibility there.
And even if they could, all their competitors have to do is go the extra quarter mile and be willing to deal with frequent callers, in order to get a better reputation and more paying customers. That is, if the US system weren't gamed so much and were more like Europe where switching is easier and the playing field is level. This is where I feel that the US wireless companies are colluidng to lower service levels and stifle competition by making phones non-portable.
Cingular has done some of those bad customer service things to me, but eventually they've been able to give me some resolution. I don't call them often, but when I do, I have to endure multiple transfers, long holds while they check things, and confusing explanations that I often have to ask them to recap at the end (or call back and get more clarification on when the bill arrives). Add to that the fact that they usually try to sell me some service "upgrade" or new phones I don't want in the process. So I tolerate them. But if I was penalized for the time I have to spend on the line with them, I'd chuck the thing in a river and give up on cellular.
So the tactics that cell companies use to try to squeeze a few extra nickels out of customers are the things that frustrate people: confusing plans, mysterious charges, exasperating response to customers, a fragmented service/reseller system where you get completely different explanations, and roadblocks (rules, terms of service, "deals") that prevent thigns from being resolved rather than facilitating the process.
8-19-2007 @ 12:13PM
Dodacrazy said...
I to understand its not the people in thier service dept.but if you seen thier billing its out of control and having a monthly bill running around 85 dollar then the following month look at 400 plus who in thier right mind would not be calling and calling and calling because of drop calls from transfers and not understanding who you are talking to.I must share this with you after waiting 35 minutes to get service on the lady answer and said she was busy and hung up on me!