My family has been a Sprint wireless customer for more than 10 years. We’re happy now, but in 2007, we almost fired Sprint because of dropped calls, billing problems and limited support for newer smartphones.
Ironically, if we had called to complain often enough, Sprint might have fired us!
That’s right: In June 2007, Sprint fired about 1,000 of its 53 million wireless customers for excessive calls to the contact center. That decision set off a firestorm of bad publicity at a time when the carrier was struggling to survive. Furthermore, Sprint didn’t address the reasons for the excessive phone calls. At the time, Sprint’s customer satisfaction rating was 61, making it an industry laggard.
To deal with this mess, Sprint’s board of directors appointed Dan Hesse as CEO in December 2007. Shortly thereafter, Sprint posted a nearly $30 billion loss for 2007. Then Hesse began his tenure by laying off 4,000 employees and closing 125 stores. In 2008, Sprint lost more than 5 million subscribers, resulting in a 32% year-to-year decline in wireless revenue. Dwindling cash reserves put the company at serious risk of going out of business.
Worst to first in five years
Fast forward five years, and Hesse had accomplished an amazing turnaround. Sprint’s ACSI score in 2012 had climbed to an industry-leading 71 and was ranked No. 1 in call-center satisfaction. Also that year, J.D. Power and Associates ranked Sprint best in the purchase experience among full-service wireless providers for the third year in a row. Revenue and subscriber growth returned, although financial performance was uneven
How did Hesse bring Sprint back from the brink? Given the bleak situation, he could have continued to slash costs, hunker down and hope for a buyer to rescue the company. Instead, taking a customer-centric approach, he set a goal of improving the end-to-end customer experience so that customers would choose to stay with Sprint.
Let’s take a closer look at Sprint’s turnaround though the lens of the five customer-centric habits that I’ve identified in my research.
Habit 1: Listen to what customers value, seek feedback on their experiences
Sprint’s customer research found the three biggest drivers of loyalty were network quality, competitive pricing and problem resolution. Sprint “listened” to customer feedback using transactional data, customer escalations, industry benchmarks and social media. Poor service experiences was determined to be the major culprit in customer dissatisfaction. In all, they identified 35 to 40 problems driving dissatisfaction. One simple example: An overly complicated rebate process that frustrated customers and drove unnecessary Sprint calls and store visits.
Habit 2: Think objectively to make sound, fact-based decisions
Certain problems required sophisticated cross-channel analytics to uncover, such as why customers quit an interactive voice response interaction to call a live agent. Armed with this insight, Sprint made usability improvements that vaulted Sprint’s IVR customer satisfaction into an industry-leading position by Q4 2009. As a result, the contact center completed tens of millions more calls in the IVR in 2009 versus 2008. Sprint’s customers were less frustrated and the carrier reaped huge cost savings.
Habit 3: Empower employees with the authority and resources they need to please customers
Sprint made innovative use of social media to empower non-service employees to serve as ambassadors for the company. “Social Media Ninjas” was launched in 2010 to help improve Sprint’s reputation using social media sites. By December 2012, nearly 3,000 Ninjas were helping to improve Sprint’s reputation using their personal networks. By 2013, employee morale had noticeably improved, and Hesse has earned a 79% approval rating in Glassdoor, significantly better than his peers.
Habit 4: Create new value for customers without being asked
In 2008, while customer service improvements were under way, Hesse also got to work on better pricing and solutions — both key to customer loyalty. Shortly thereafter, Sprint launched unlimited data plans, one of the key reasons our family has remained loyal over the years. In late 2011, Sprint finally added the iPhone. Eventually all Nextel customers were transitioned to the main Sprint network, to deliver more reliable, higher-quality calls.
Habit 5: Delight customers by exceeding their expectations
Sprint and other wireless providers are in a difficult position, generally viewed as a utility. One huge challenge is that smartphone suppliers like Apple get credit for “wow” and carriers tend to get blamed for problems. That makes price a big factor in consumer decisions. One of the bright spots for Sprint is the no-contract Boost Mobile, which offers low pricing for unlimited usage, coupled with “shrinking payments” as a reward for loyalty.
Lessons learned
Hesse didn’t turn around Sprint with “the customer is king” proclamations. Rather, he made the customer service experience a top priority, focused on improving their core solution (network, phones) and recognized that pricing was a strong lever in market increasingly viewed as a utility.
To support these initiatives, Hesse also understood that employees must be measured and rewarded for executing the business strategy. One of his top change drivers was “align compensation and rewards.” This helps new behaviors become part of the culture — the way business is done routinely.
Sprint’s turnaround from “worst to first” from 2008 through 2012 is remarkable. However, Sprint’s current position is competitive but hardly leading in all categories. Clearly there’s much more work to be done, but Sprint lives on to fight in a tough industry. As a customer, I like what the company is doing and root for its continued success.
Bob Thompson is founder and CEO of research and publishing firm CustomerThink Corporation and editor-in-chief of CustomerThink.com, the world’s largest online community dedicated to helping business leaders develop and execute customer-centric business strategies. He is the author of “Hooked on Customers: The Five Habits of Legendary Customer-Centric Companies.” A keynote speaker and international authority on business management trends, he has been a thought leader in customer-centricity since 1998.