The Right Move: Sprint Nextel Telling Customers: "You're FIRED"

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The Right Move: Sprint Nextel Telling Customers: "You're FIRED"

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Recently numerous blogs and news outlets have reported that Sprint Nextel has fired a bunch of customers (seems to be only a few thousand) basically because they were unprofitable. These people either called customer service frequently - one report I heard said 25 times a month - or used unprofitable services extensively, like thousands of roaming minutes on other networks.

What has really surprised me is that so many people find this to be "shocking" or "horrible" or "bad customer service." I disagree. This is one of the smartest things Sprint could do. Note: I am a formerly a customer of both Sprint and AT&T (within the past year), and currently a Verizon customer, in case you are wondering.

Especially as a small business, you need to be careful what customers you add because only a couple customers that eat up all of your support and development resources can really negatively impact your growth. My Internet marketing startup has specifically not sold to a few potential customers because we knew that for what they were demanding we would not be able to keep them happy without draining our resources and sacrificing the development of our core products.

Here are the 3 reasons why I think firing some of your customers is a good idea:

1) All your other customers will love you more. If I am one of your customers and I know you are spending a ton of money supporting a small number of other customers, I would be pretty mad. Why spend all that money on a few unprofitable customers, when I am a good and profitable customer. Spend money on me instead. Upgrade your network, offer more services, and decrease my hold time for the rare occasions when I do call.

2) Business is a FOR-profit endeavor for a reason. Sometimes in all the web 2.0 and customer centric trends in our world people seem to forget that businesses are built to generate a profit. And profit is good because profitable sectors attract more competition, innovation and new products. Customers of unprofitable companies should be worried, because the long term viability of those companies is questionable. One of the criteria customers should use in choosing a service provider is the long term viability of that provider.

3) Pushing back brings respect and value. Just like when you are in a relationship - either professional or personal - with someone who always does exactly what you ask and never pushes back, over time you lose respect for the person and they will not become a trusted advisor. Some of the best working relationships I have had with vendors and service providers (both in my B2B and B2C life) are with companies that occasionally question what I want and why I am asking for something. If they truly are "value added" they should know more about what they do than I do, so they should be able to push back to provide different or additional services that will actually make me happier and that are usually different from what I was originally asking them to provide.

In case you were interested, here is an example of one of the letters:

sprint cancel letter

What do you think? Are you a Sprint Nextel customer? How does this change your opinion of the company? Leave a comment below so we can discuss.

Posted by Mike Volpe on Tue, Jul 17, 2007 @ 11:02 AM

COMMENTS

Well, isn't that hard? I think the provider-customer relationship is imbalanced. For me I won't be happy if some provider did that to me for whatever reason. It can charge me more, it can limit my resource consumption but firing my next fellow customer makes me wonder, am I next?

No that's not smart and there could be other ways to either profit from the higher resource consumption of that customer or limit it.

posted on Tuesday, July 17, 2007 at 2:11 PM by Nader Soliman

Wow! that's quite a letter. A "true-blue" termination letter. That took some guts. I agree that sometimes such steps are necessary to bring sanity back to a situation. As a business owner, I know we always feel bad when we have to take repeated jabs from "not so nice" people even though we're doing the best we can do to serve their needs, so I think that's one for the business owners of the world ;). Just my thoughts.

posted on Tuesday, July 17, 2007 at 2:30 PM by Elle Meru

Kudos to Sprint! As a small business owner and small business development consultant nothing can be more vexing than a customer/client who feels TOTALLY ENTITLED to constant and demanding attention somewhat like a child in their "temperamental 2's". Constant complainers are to be dismissed forthwith and for the small business person you know before you sign up a new client if they are going to be one of the one's who feels TOTALLY ENTITLED to way too much of your business time. Just say "NO" and move on, you'll be glad you did. If your one of the few who provides good to great service/product for a fair price eliminate the chronic "ENTITLEMENT BABIES" and take care of those who value your company... Porter

posted on Tuesday, July 17, 2007 at 6:16 PM by Porter Duquesne

Mike, I absolutely agree that just because a customer wants to buy, doesn't mean that you should allow them to buy. Before we can terminate a customer after they buy, we must look to the manner in which they were sold. If the salesperson promised the world, then the world should be delivered and the customer should not be terminated. (Perhaps the salesperson?...Different post!) On the other hand, if the salesperson has not over-promised, but the customer continues to demand the world...termination is appropriate. However, the best solution is to have strong salespeople that can properly match company offerings to customer needs and everyone's happy!

posted on Tuesday, July 17, 2007 at 11:42 PM by Rick Roberge

I think there is a balance between customer service and customers who think they are entitled to your constant attention. Usually those customers are the lowest profit customers. After a while, you are no longer making money. Since we are in business to make money, something has to go. You should get rid of a customer like that, make more time for your good customers.

posted on Wednesday, July 25, 2007 at 11:20 AM by Dr. Letitia Wright

I think it's great. I'm a Sprint-Nextel customer and sometimes the hold time is much longer than necessary. Mind you I only call when there's a legit reason (phone issue, etc.). Get those people that know how to work the "system" out of the system. They only call to try to get more free stuff (time, roadside assistance, etc.). Now if only Nextel could provide a pda that wasn't the crackberry... I mean blackberry we'd be in business.

posted on Thursday, July 26, 2007 at 8:29 AM by David Adorno

Well first off let me say that I am a customer of sprint-nextel and if they sent me a letter I would be upset. Every single day my phone drops calls and I can never really hold a conversation for more than 10 minutes but my walkie talkie feature always works. I get bills where I have charges for tons of messages or services that I have not used. The customer service is not doing their job and sprint-nextel is not doing their job. Yes there are some people who call just trying to get free stuff but then again they already make all this money charging these rediculous amounts for plans and services that the people that do call and get free stuff are not hurting their profits much. Now if sprint- nextel was a small business then I would understand getting rid of the peolple who are unprofitable but they make tons of money.

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