Sprint’s Financial Woes: Customer Relationships Are A Marathon

Sprint provides more data today for the risks of not listening to existing customers.

テつ GigaOm wrote, " In the fourth quarter ending December 31,2006, Sprint Nextel lost post-paid 306,000 subscribers, the only metric that counts amongst the Wall Street types. The stock fell about 10% and the company is cutting 5000 jobs.

Today, GigaOm and Mobile Tracker discuss the Nextel merger problems, dual network strategies and the departure of key executives. These are probably factors inasmuch as these opinions belong to industry experts.

Sprint in their press release highlighted issues with their network coverage along with "brand awareness and marketing"; their billion dollar ad account is in review. In that paragraph about brand awareness and marketing, they do not reveal any support for a brand awareness and marketing problem. I would guess brand awareness is pretty high; they spend somewhere between $1.2-$1.5 billion dollars on advertising according to the NYT.

In my previous posts I have discussed the issue of Sprint’s poor customer service and the limitations of advertising in the equation of a bad product of service; the Sprint customer experience just doesn’t support the advertising message whether it is in their retail stores or in their call centers. Advertising can acquire customers, it just can’t retain them. That has never been a novel insight…in a social media world, where the customer is in charge world, understanding the limits of advertising and the power of the customer is a necessity.

Google "Sprint bad customer service" andテつ then "Sprint good customer service." I think the results speak for themselves.

As far as customer service, Sprint ‘s paragraph on the topic is called Improved Customer Satisfaction. They say that they have converted to a unified billing system and expanded their call centers.

They write, "As part of its efforts to improve customer satisfaction, in the second half of 2006 business and consumer customer service operations were consolidated into one organization, allowing for greater efficiency in supporting the customer experience. New executives have been named to lead customer retention and customer operations activities."

I have had my worst experiences with Sprint over the last six months. 306, 000 lost subscribers in one quarter is a pretty large number, even larger considering the amount of money spend on advertising.

While they are saying they are improving customer satisfaction, it looks like brand loyalty is going in the opposite direction. Not having access to the metrics that Sprint should have, I did a quick "customer satisfaction measure" search and found Brand Keys.テつ Brand Key’s measures customer loyalty on an annual basis. Look at Sprint’s rankings by year beginning in 2002. They went from #2 in 2002 to #26.

Sprint Long Distance Provider 26 14 7 3 2

テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ テつ ’06テつ テつ ’05テつ テつ ’04テつ テつ ’03テつ テつ ’02

in 2006 out of the 238 brand’s measured. OK, so maybe 26 isn’t so bad; but #2 is better; and 2 to 26 is not indicative of improvement.

Chris Carfi’s The Social Customer Manifesto says it all for the new attitude of the customer:" Customers simply aren’t taking it anymore. And if an organization is not opening up to them, and not interacting with them, and not meeting their needs, those customers are going to make sure the organization knows about it. Maybe not today, but soonテ「竄ャツヲand that’s if the organization is lucky. More likely, those same customers will just go away and never come back. "テつ

New research by Forrester Research’sテつ Bruce Temkin directly addresses this as well as "With more access to information, more sensitivity to price, and less sensitivity to advertising, customers are getting harder to win and keep. Organizations try to woo these empowered consumers with mediocre customer experiences テ「竄ャ窶 but it won’t work."

テつ Forrester Research notes regarding improving customer experience, "Firms must: 1) build a shared understanding of how to think about customer experience and 2) put the process and skills in place to make improvements." Forrester says the goal is a multi-year "experience based differentiation (EBD)" based upon "three principles: obsess about customer needs; reinforce brands with every interaction; and treat customer experience as a competence, not a function.

As Chris Carfi’s social customer says, "I don’t want to do business with idiots." Customer relationships are not a sprint, they are a marathon.

Thanks to Carol at Driving in Traffic for the heads up on the negative financial news from Sprint.

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