Sprint's answer to its troubles: better customer service
With its customers increasingly churning to competitors, its executives leaving, and its reputation for poor service, Sprint needs to do something. Now, its new CEO suggests a focus on the customer.
In a wide-ranging interview with The New York Times, Sprint CEO Dan Hesse acknowledged his company is in dire straits.
Especially in its wireless business, Sprint's subscriber numbers remain rather weak. Churn -- a measurement of the percentage of total customers canceling service -- is nearly 2.5 percent, the highest in the US market. In the first quarter of this year the company recorded a net loss of about 564,000 subscribers, continuing a more than year-long pattern of troubles in keeping customers.
The stock price of the company has fallen by more than half since this time last year, and its decreasing market value has now spurred rumors of a buyout. Most recently, Deutsche Telekom was rumored to be mulling a bid for the company earlier this year.
This whirlpool of bad news and rumors appear to be almost ready to suck Sprint down with it. The NYT quoted some executives as blaming the media for its troubles, saying they were tired of hearing about it.
"We've gotten some bad press and think we don't deserve it," customer service manager Brett Collins told the paper.
But it's Sprint's customer service that has gotten it into a lot of trouble, so shifting the blame to the press may be a scapegoat. A notable example was the company's move in late June 2007 to cancel the wireless service of those who frequently complained to representatives.
Through the resulting fallout, it was revealed that the some of the excessive calls were generated by errors on Sprint's own part, throwing into question the carrier's motives in launching the effort.
With a lot of focus on the customer service problems, Hesse is tackling these problems directly as the spokesperson in the company's newest set of ads. These feature the chief executive talking directly to consumers about Sprint's services -- letting them know he's listening, and inviting them to contact him.
It's not immediately clear how successful these ads may be, as the campaign has just started, or how many may actually be getting through (and getting a response) from Hesse.
Some aren't so complementary of the approach. "TV commercials are not going to help [fix Sprint's image]," 247WallSt.com editor Douglas McIntyre wrote. "Fix the problem. Stay off the tube."
Either way, it's clear Hesse has gotten the message from consumers.
Whereas there had been no executive in charge of customer satisfaction when Hesse arrived at Sprint in December of last year, heads of every department in the company are partially responsible for customer satisfaction now.
In addition, Sprint's customer service division has hired additional representatives to ensure 80 percent of all calls are answered in 30 seconds or less.
As to whether Hesse's changes do any good, investors can only look forward to its fiscal second quarter's balance sheets -- due sometime in August -- for validation.