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February 28, 2008, 2:21 pm

Sprint’s dreadful customer service is CEO Hesse’s No. 1 priority

By Michal Lev-Ram

Sprint chief executive Dan Hesse faced investors for the first time Thursday as the company delivered a slew of bad news, including a fourth-quarter loss of $29.5 billion and a continued decline in subscriber numbers.

Hesse, a wireless veteran, was brought in last December to replace ousted CEO Gary Forsee. Since then he has made several cost-cutting changes at the company — including laying off about 4,000 employees and closing 125 retail locations.

But Hesse is first to admit that fixing Sprint’s (S) woes will take much more. And the thing that needs fixing most is the Sprint’s reputation for dreadful customer service.

“The number one priority is improving customer service across all touch points, including retail stores, billing and customer care calls,” Hesse told Fortune.

That may be an understatement. In customer care surveys, Sprint regularly ranks lowest. It came in behind rivals Verizon Wireless (VZ), AT&T (T), T-Mobile and Alltel on a recent customer service performance study by J.D. Power and Associates. Bad customer relations has contributed to its high level of “churn,” the rate at which customers defect to other carriers. Sprint says it lost nearly 700,000 subscribers in the fourth quarter alone.

“Not only are we not attracting enough new customers, but our existing customers are leaving us at too big a rate — that’s why the customer service issue is highest on our list,” Hesse said Thursday after a conference call with analysts.

To that end, Hesse says he has changed the way the company measures its call centers’ performance. Instead of focusing on “handle time” — how quickly a customer’s issue is resolved — he says the focus is now on finding the right solution the first time a customer calls in, even if that means the call takes longer.

“Call resolution,” said Hesse, “is becoming the number one performance metric.”

Hesse is taking other measures to try to stop customers from fleeing. Earlier that day he announced the launch of Sprint’s new $100-a-month unlimited calling and data plan. The other major carriers launched their own unlimited calling plans last week, but unlike Sprint theirs did not include services like “all-you-can-eat” mobile TV, Web browsing and e-mail.

Hesse says his number two priority is re-defining Sprint’s brand, which he hopes to build around the company’s data services and the high-speed broadband network that enables them.

But some in the industry are calling for even more dramatic bigger changes, such as breaking up the company and selling off its pricey WiMax project, a next-generation wireless network into which the company has poured billions of dollars.

Hesse said he is still evaluating all aspects of the company’s operations, but that any turnaround is unlikely to happen for many quarters.

Mr. Hess,
I have been a Sprint customer for more than 4 years, and was relatively happy until about 6 months ago. Well, aside from the constant overbilling and total lack of interest in helping me to choose a plan that would save me money and keep me out of overages anyway. However, while merely attempting to take advantage of my $150.00 phone upgrade, I have been lied to, given endless runaround, both in stores and on your so-called “customer service” line. I have had to repeat the same story to at least 20 different reps and 4 or 5 separate departments. Do they not enter conversations or contacts in the computer system? At this point, I have been in constant dispute about my bill and a phone which I returned and am still being charged for for approximately 4 months. I feel at this point that Sprint owes me, and if there was some way to get out of my contract without being absolutely raped again, I would leave today.

Posted By David R. Worley, Forney, TX : May 28, 2008 9:54 pm

and by “forced” I mean competitively forced, not some stupid government regulation. The market will choose winners and losers.

Posted By db, RTP, NC : May 6, 2008 9:30 am

I’ve had Sprint for over four years and have been a premium subscriber for the entire time (i.e. my cell phone bill is almost always above $120/month). The customer service I get, while not always perfect, has been acceptable but I’m also willing to spend time on the phone to get what I want. I find most people want to pay no money for a phone, get the cheapest plan they can get away with, then complain and moan about how they’re not being treated like kings.

As always, you get what you pay for. I’ve now taken Sprint up on their $99 unlimited package and am actually saving money each month. It’s a great deal and one which other companies should be forced to adopt.

Posted By da bomb, RTP, NC : May 6, 2008 9:29 am

I may be one of the few people who has largely experienced good customer service with Sprint. Of course, maybe that’s because they’re trying hold onto the remaining customers they have.

But even before that, I only had one bad experience with Sprint CS, which I still resolved in a single call.

I was recently given extensive credits and rebates to sign up with Sprint for another two years. I ultimately made money on the deal.

While Sprint isn’t perfect, I’m pretty happy with the service I’ve been getting.

Posted By etpayne : May 6, 2008 2:41 am

I have been a Sprint customer since the year 2000. Usually the service on #2 calls are very acceptable. The service at its stores is however, another story. The employees are not very interested in handling issues. Frankly I think that many of them should be fired and replaced with only persons who truly are interested in customer service. On the most recent visit an employee was rude,insulting, obnoxious,and calcitrant, not to mention he was sloppily attired and now someone with whom you would want to do business. Sprint should hire secret shoppers to get the true lowdown on their employees.

Posted By sonia kelly, palm beach, fl. : May 5, 2008 6:03 pm

I am a Sprint employee. Certainly, we’ve not done a great job with customer service over the past several years - especially in the consumer space (though business customers handled much more effectively). I am not a “pollyanna” - but I am optimistic about the near-term future of the company. A number of people on the Blog are beating Mr. Hesse for the sins of his predecessors - and while it’s understandable, it’s also unrealistic. In the short time that he’s been at the helm, he has made a number of moves that will pay dividends for the company - with customer care being No.1. I don’t expect anyone who’s written some of the posts i’ve just read to take this at face value - but i’m quite certain that as a company, we’ve faced up to reality - have it out in the open - and are moving as quickly as possible to address the issues. I am disappointed that we’ve gone through this period, but from the “inside” I can see that new leadership is working hard to cut the BS and make the improvements that are necessary to stabilize and support the growth targets. Now is a very good time to “buy”.

Posted By James, Shreveport, LA : March 18, 2008 3:59 pm

Company policies are what make speaking to the reps so difficult. Rudolph Hess does not see this. He believes saying, “Thank you,” at the end of every call is what will fix things. If he changed the policies so the Customer Service people had the freedom and ability to help people he might see a better response when the word “Sprint,” is mentioned.

Posted By John, Minneapolis MN : March 16, 2008 7:29 pm

Customer service and Sprint are truly the worst experience I have ever dealt with period. They do not get it!!! No empathy and willing to understand the concerns of customers is BS. Sprint ranks # 1 in my eyes of customer rejection and sticking it to you without and regard.

Posted By US Army : March 10, 2008 1:42 pm

I am a SPRINT customer and never have I had a worse experience with a service provider. It has overbilled, misbilled and screwed up so many times that it is a wonder that I have not left. As soon as August comes and my 2 years from hell are over I am leaving.

Posted By Blake, Minneapolis MN : March 6, 2008 12:23 pm

Due to their complete failure on the customer service end, I truly pray that this company crumbles and fails and files for bankruptcy. They are getting what they truly deserve. They are and have ALWAYS been ONLY concerned about money and could care less about customer loyalty. IF they were concerened, why did it take a huge company so long to act ? IF they actually cared, they wouldn’t wait until it was too late. Sprint is ethically and morally bankrupt, just like United HealthCare.

Posted By Joe San Antonio, TX : March 5, 2008 8:20 am

Hess misses the point. Every department cannot handle everything that every department handles so they are instead wasting the customer’s time by keeping the customer in the wrong department. They have also taken away the things which could help the customers. Oh, a discount on a phone and a $20 discount will save the customer? Well, they can’t do that anymore. The staff is now despondent as company managers such as Madeline Davenport are using them as scapegoats to save their own jobs. There is so much misery being created because of this it’s making the situation even worse because the staff has lost its motivation and they are firing so many people now and replacing them so quickly the new people do not have time to be properly trained. It’s over.

Posted By ANAPA, New York, New York : March 4, 2008 9:07 pm

Mr. Hesse,

Your comments about “handle time” is very confusing. First of all, how can the time frame change, when you have customer service representatives from a non English country answering your phones and they can’t understand the basic English speaker.

The real issue with customer service is that Sprint choose to outsource its customer service to a country where English is not the first language at the expense of its customers.

So why it is that difficult to understand the horrors that customers face when your customer service representatives do not have a 30% command for the English language far or less them communicating with the various regions of America and its English speakers. The calls normally take longer due to the language barrier. Example: Southerners??? Hello, New Yorkers???, Floridians???

Kebrinacrystal@gmail.com

Posted By Kebrina, Atlanta, Ga : March 3, 2008 11:04 pm

Sprint
The rise and “fail” of a company. There was a time. It’s passed for Sprint. As soon as my contract is over. I may even eat the lost and leave. They even burned my 7 years of loyalty. I don’t have to say why. Oh so many knows why.

Posted By Don, Plano, Texas : March 3, 2008 9:04 am

Mr. Hesse,

Sprint problems did not start overnight. I have three years of information documented in my Day Minders from 2005 to present of screw ups and attempts to fix them. The constant response of they system not showing previous calls and any documented information of the problems previously addressed is just amazing.

In September of 2007, Sprint called and offered a “Special” and what a “Special” it turned out to be. Three customer representatives later, three account service representatives and a reference number to assure that I would not have to address the system lack of information, and guess what? I have a printed conversation between yet another customer representative and myself clearly stating that the system shows no such discount nor reference number.

I am not trying to fix the problem, I am hiring a lawyer.

Posted By Burned out / Kebrina, Atlanta, Ga : March 3, 2008 1:56 am

To say that Sprint has no human being conferencing the call, seem’s absurd.
Cellular company’s are bitter sweet.
The biggest issue with any cell phone company is technical issues that may not be properly explained unless you are technically efficient enough to understand. With the merger with Nextel, this did create alot of caous but microsoft had a lot of bugs to work out as well before XP became a success.
Odd’s are that if you are a sprint consumer you may have had your fair share of headaches, but you may have also had your fair share of “human” reps that had shown empathy and real concern in the issue/matter that you were dealing with and introduced a proper and fair resolution.
Not only did this comment seem ridulously redundant, the comment about “human” reps seem rascist.
Let’s face it, we want more than this worlds got to offer but customer service starts with every cellphone company and every cell phone company has technical related bugs to work out.
Larger cell phone companys are means to longer merger times.
If it’s taken this long to come together isnt that showing sprints dedication to perfection (ironing out the bugs for the better good of the consumer).
We live our lives with our eyes half open ~ keeping an open mind could have been useful to the hundreds of thousand people that left sprint.
Had they have stayed with the company and have learned to have been loyal,
Loyalty would have paid off.
Sprint will be recognized as the leader of awesome customer service.
For all who left Sprint, I’m sure that when every bit of sprint is securely intact and re-establishes its powerful reputation, all who left will want to come back. All in a matter of time as well, because I’m sure their new cellular company may bestow upon them an immense amount of thier own headaches to bandaid.
By that time Sprint will have already issued a “tylenol” to every sprint related headache and the crown will be put back on the head of its rightful owner.
Sprint will overcome anything that gets thrown in they way of their success. It’s just common sense.

Posted By Evangeline - Orange County, California. : March 1, 2008 1:32 pm

Sprint seems clueless how to tackle their fall from grace. Until Hesse picks up a phone and calls his customer service representatives he won’t understand the level of frustration people experience communicating with Sprint–it is broken. New innovative plans won’t work until people feel that there’s someone at the end of the telephone connection that cares–it is a human problem, not a technical problem. Unfortunately, it appears that no one human works there.

Posted By Geo Washington, AL : February 28, 2008 10:07 pm
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