Tuesday, July 08, 2008

Sprint's travails

Maybe you've seen the ads as Sprint's new CEO, Daniel Hess, talks about how the cell carrier is improving it's service. At any rate, somehow Sprint's customer service woes have made the NYTimes (never a good thing). I actually know a fair amount about Sprint's customer service woes back in 2004, and I'm guessing they have not changed that much. The article fails to communicate they key elements to understand about customer service in general, and certainly at Sprint.

1) Customer service reveals problems elsewhere in the company.

If you're getting a lot of complaints, or the complaints are not being resolved quickly, it points to something being broken elsewhere in the company. Maybe you have an activation process that people don't understand, or maybe you have a product that's simply too broken, or too complicated, to exist without high support costs. Either way, lots of the problems in the call center were being created by broken products and services elsewhere, and getting different parts of a company to work together is very difficult.

2) Focus on the basics.

People leave their cell carriers because they are unhappy with poor coverage, poor network availability, and poor call quality. While Sprint originally ran on its call quality (the "all digital" pin drop campaign) it's network coverage was lousy and it lost on that basic battle to Verizon, even though Verizon is more expensive and has worse phones. Actually, I think the iPhone is the first device that has actually driven consumer switching, which shows how remarkable it is.

3) Quality is free.

Every time a call comes in it should generate two actions: 1) fix the problem in that one instance, 2) fix the problem forever. You do these things, and the cost of higher quality more than pays for itself in lower support costs, higher customer satisfaction etc. Embracing this is a leap of faith though, and either leadership has the quality religion, or it does not.

4) Management matters.

Nextel was the smartest cell phone carrier. They were the only one who had carved out a niche, who has a position of strategic competitive advantage, and they dominated that. The customers were unique, their market was unique, and their financials were unique. The final, smart move that that smart cell phone company did was to sell itself to Sprint for $. Sprint did not get value from that deal, and I don't see how it could have. Another bad move by bad management.

5) Sometimes things just don't work.

Sprint's fair and flexible plan really was fantastic. It would be my recommended plan choice for most people, as it accurately deals with the problem of underestimated usage volatility (and the customer pain point of usurious overage). But it just didn't seem to take off. Sigh.


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