Practical Solutions to Business Puzzles

Customers of Sprint Nextel that call too often are being fired by the company.

Are there any legitimate reasons that customers might be calling a supplier?  Think about why they might be calling Sprint Nextel.  At times, customers are legitimately concerned about bills, are receiving poor customer service, have questions, or need more information.  And, at times, customers may even be frustrated with the level of service they are receiving sch that they decide to call every day.  If a person wants to understand their telephone bill, maybe it takes a few calls to get there.  Look at a phone bill and see if you understand it.  Have you tried to read a phone bill recently and figure out what you are being billed for?  

Sure, 40 or 50 calls may be more than expected and it could be excessive.  Firing customers may be necessary.  Before firing customers though, it is a good idea to talk with the customers being fired and help them understand what they are doing that is causing problems.  Only through such communication can companies make good business decisions.  It seems though that, rather than talking with customers on a one-on-one basis, Sprint Nextel sent about 1,000 customers a notice about its decision.  Even though it waived the final bill and all early termination charges, firing customers like this has got to hurt its relationships with those individuals.

When customers are fired, even if it is done after exhausting all options, it can have a chilling effect on other customers.  Those other customers may be reluctant to raise issues.  Beyond that, the other customers may be offended by the approach and cancel their subscriptions on principle.  To the extent that relationships matter, firing customers damages relationships.  In this case, Sprint Nextel is already trailing AT&T and Verizon in the recruitment of new customers.  Can they afford to fire customers? 

What steps might Sprint Nextel have used, if it wished to retain customers and reduce its costs? 

Personally, I am wondering about changing its contract to indicate that the company was committed to keeping prices low and, as a result, if customers made an excessive number of calls, the firm would increase the prices to reflect the additional value that Sprint Nextel was providing to the customers.  What do you think about this approach?  Might it have lead to better results than losing customers is going to do? 

Another possibility could have been for Sprint Nextel to ask the customers to help it better meet their needs and paid more attention to the customers involved.  By doing so, Sprint Nextel might have ended up with a solution that led to good will, rather than egg on its face.

What other creative ideas might have been used?  How might you use Sprint Nextel’s situation as a learning point for your business?  After all, it is critical to learn from other firms so that we don’t repeat the same mistakes that they have made.