Sprint service meltdown - a flashback to our dark days

[#1]

I was reading a stimulating blog by Tomi Ahonen last night about the Sprint Nextel nightmare that is playing out in the telecoms market in the USA. To cut a long story short Sprint, who are one of the largest telecoms and Internet companies in America, booted around 1,000 customers off the service for calling the customer support centre too often. As a result they have lost hundreds of thousands of customers and are now having to lay off 4,000 staff. Unsurprisingly, they have been vilified in online and offline media. Another commentator on this subject is Tim Marklein who quite rightly says,

Rule #1. Don't fire customers.

Well, at this point I have to pause for a sharp intake of breath before continuing to type. And most PlusNetters (PlusNet staff) know why. And so do many PlusNet customers. And so do lots and lots of other Internet users in the UK - some of whom are ex-PlusNet customers, some of whom have never been PlusNet customers. In 2005 we broke rule #1. There, I said it. And it was the start of a very, very dark 18 months for PlusNet and our customers. If you want the gory details there are more than enough blogs and forum posts out in the ether that explore the reasons for, and the ramifications of, the decision that the company took. But, in a nutshell PlusNet, as a small but fast-growing company, made the classic mistake of putting its shareholders before its customers. As a result behaviour in the company often focused on fixing the symptom rather than the cause. This applied to the number of customer support staff we had, the whole approach to customer service, the amount of bandwidth available in the network and the product designs we had. But rather than coming to terms with *why* two customers were waging war in our forum, the two customers were told in no uncertain terms to leave. A terrible, terrible mistake which we are still paying for in more ways than one. Looking back now it was a clear turning point for the business and one that nearly killed us. The business that forgets that their customers pay the wages, is a business with a short future. It's horrible seeing a massive American company making the same sorts of mistakes and inflicting the same sort of pain on its customers as we did. But this opens up some wider discussions. What do you do when you have customers who you don't 'want'. Every business has unprofitable customers - obviously - as a normal cost of doing business. What do you do when customers call support 'too often'? What do you do when customers are using your service 'too much'? The key thing here is to make sure you don't get in a position where you even consider 'sacking' your customer. Avoid attracting the 'wrong' type of customers by clearly setting out your stall is the way forward. Be totally honest with customers pre-sales and keep being honest from there on in. It's too easy to fill your marketing material with guff designed to lure customers in that doesn't accurately describe your service. Successful products need great planning and total openness from the minute someone hits your sales journey. If you don't set the right expectation with your customer from the outset, it's pretty unlikely the relationship is going to be a good one. If you can't support a customer who calls a lot, make sure they know that before they sign up (T-mobile for example offer an online-only support package to avoid this problem). Other companies implicitly discourage phone calls with a premium rate technical support line. If you sell a bargain-basement priced 'unlimited' broadband product that you say is 'superfast', and that turns out to be untrue (because it is an impossible claim to sustain), expect customers to be very angry when they are let down. We've been there and learnt the lessons. You can't just chase the sales target and attract anyone who will buy your product, because you end up disappointing too many people. The Internet makes it impossible to get away with that now. Seth Godin, another favourite blogger of ours, sums it up well here.

If you treat a customer like he's wrong, he's going to leave, and probably tell a bunch of other people. Before you take that route, be direct, straightforward, polite and firm, and decline to sell to them.

We try to set customer expectation during our sales journey using a system of five stars to represent downloading speeds. Some customers think this is too simplistic, some are confused by it. We also explain in detail what traffic management is, why we do it and provide regular updates. What would you do in our position? How do you set customer expectations during your sales process? If a customer, or group of customers, ends up costing you significantly more money than they spend, you can rarely just do nothing. The classic example in the ISP market is heavy-users or bandwidth-hogs. If you have a product that used to make financial sense and now turns out not to because of changes in average usage behaviour, what do you do? What you don't do it try and blame it on the customer. Inviting customers to leave, kicking them off the service altogether or squeezing their bandwidth until they get fed up and leave might seem like simple short-term solutions, but in the long run are usually far more costly than simply explaining "the world has changed, we got our maths wrong and now this product doesn't work." As a business you have to take the responsibility for getting it wrong, and if you can't handle your mistake well, you should expect to be punished in the harshest way by those people affected and the many others who will emphathise with their story. We have been there with bells on. If only we'd been reading Seth Godin three years ago. I wonder if Sprint will survive the mess they are in. We nearly didn't.