Sprint focuses on keeping customers happy so they don't leave
Customers have been running from Sprint Nextel in recent months: In the fourth quarter of 2008, 1.3 million subscribers dropped Sprint's service, pushing down revenue 14%. Now that AT&T has the iPhone, T-Mobile has the G1 and Verizon Wireless has an even bigger network thanks to its acquisition of Alltel, Sprint faces more challenges retaining customers. So what's a company to do?
Focus on customer service.
"When customer satisfaction with customer care goes up, churn goes down," said Bob Johnson, Sprint's chief service officer, in an interview today. Churn is a polite industry term for people ditching your service.
It's going to be an uphill battle. Sprint has consistently had the worst ratings for customer care in an industry not known for its service. A 2009 J.D. Power and Associates study, for instance, gave Sprint two stars out of five. It was the only major carrier with fewer than three stars. Verizon and T-Mobile each received five. Perhaps as a result, Sprint lost 4.5 million customers in 2008, while AT&T and Verizon added 2.1 million and 1.4 million respectively.
One way to improve customer service is to make sure that ...
... customers' problems are resolved the first time they call, Johnson said. Others are to reduce hold times and make sure the representatives are clear when they answer. Improving in these areas means bringing some things in-house. Sprint used to have 70% of its customer care representatives outsourced in such places as the Philippines, India and Mexico. It's now aiming to have 50% of its customer service representatives outsourced.
"We were a bit too heavy on outsourcing coming in to 2008," Johnson said.
Of course, not all churn can be stemmed by improving customer service, so Sprint is also focusing on fixing "pain points" -- the things customers complain about. Those include billing issues and problems switching handsets. Fixing those problems has helped Sprint reduce the number of call centers it needs, he said.
Still, despite the dreary economic climate, Johnson says that improving customer service can help Sprint excel and that the company has made progress in the last year.
"We know that customer care is no longer a reason for customers to churn," he said. "Now we have to get to the point where it's a reason for them to stay."
-- Alana Semuels