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.

[#2]

Good to see a business admitting its mistakes, and getting back to basics

[#3]

I think I know which incident you are talking about with certain customers, one of whom had a triple digit number in his name I believe. For what its worth. I actually agreed with the decision of Plusnet to "fire" these customers. For a time I supported what they were doing. However one day it got to the point I needed help with something and found I was completely unable to any response from the Plusnet Support team as it was impossible to make a post without it being hijacked or get an answer to any ticket as all the Support Team was having its time monopolised by a few individuals. Sure Plusnet made a lot of mistakes at the time but I don't think all the blame should fall on just Plusnet. Those individuals have to take some responsibility too. Anyhow.. all in the past now. Happy days are here again!

[#4]

Hi Neil and readers here at the Community blogsite Wonderful posting. Gut-wrenching but sincere and with such insights and wisdom. I am so happy you discovered the cure to the problem back then, and helped PlusNet find a better way to deal with (modern, digitally connected) customers. And even more, that you Neil, dare to make this kind of admissions in the open. I will send the link to your blog to my co-author Alan Moore, and we will blog about this, together, "kindly" ha-ha, with respect to your honesty, and the very powerful lessons that this story contains. For every company in the world, not just Sprint Nextel today. Thank you Neil so much for the blog. Tomi Ahonen :-) web www.tomiahonen.com blog www.communities-dominate.blogs.com

[#5]

>>In 2005 we broke rule #1. There, I said it.

[#6]

At last, an apology and acknowledgement of your errors. Glad to see that you have had the guts to admit this Neil. If you had done this at the time, I would not have left for one.

[#7]

I'm planning to come over Plusnet but dealing with awkward customers via my job, I've learnt that balance is essential for a company to prosper and the customer t be happy.

[#8]

Did the person who made the decision to fire the customers ever ger the axe?

[#9]

@barquerole Yes they did.

[#10]

I don't think PN would've had half as much trouble if it had taken a good hard look at Metronet and seen how that minnow of a company managed to achieve +90% satisfaction with far less resources at its disposal. It's all about communication, and making a customer feel like more than just a number on the books. If you were with Metronet before the PlusNet buyout, you could have a proper conversation (and a laugh) with a techie, over the phone, a web forum or even Messenger. Sometimes, if you're lucky, you still can. Old habits die hard, I guess. If they couldn't fix the problem, they'd explain what the problem was (sometimes to excruciating levels of geekness). And if the problem was at your end, they'd tell you. As long as you didn't slag off the Metronet firewall on ADSLguide and risk incurring the wrath of the guy who wrote it, the "personal touch" was about as perfect as a customer's experience can get. It is a lot more satisfying to be treated as a human by someone who themselves acts like a human, than being stuck on hold for four hours and then having some robot in a call centre read "have a nice day" off a crib sheet.

[#11]

@neil_a Oh really, Isn't she still your Call Centre Manager?

[#12]

@ barquerole I think Neil is talking about the bloke that couldn't spell !

[#13]

I've been a frustrated Sprint customer for quite some time, but my most recent experience is more disquieting than any previous one. A couple of days ago, I went to Sprint's online store to purchase an extended life battery for my Treo 700w. I have about six Treo 600s and six Treo 650s that were returned because of technical failure and replaced. But never without the requisite long waits, hangups and nasty attitude from Sprint "customer service." But these experiences must mirror those of many other observers. HOWEVER, when I started to pay for the battery, the sequence of screens informed me that my former "user name," or my Sprint phone number, would be changed and I had to create a new user name, new password and new PIN code. After negotiating this ponderous and unnecessary process, I was directed to a verification screen for the PIN code, which posed questions that make clear that Sprint has in its possession the square footage of my house and the year I purchased it. I know this information could be readily available, but WHY would a cell phone company obtain and keep it for such uses? I've asked them, but so far have no satisfactory answers. If anyone would like to join me in posing a series of questions of Sprint, please be my guest. I'm pasting an email below that I sent one of their "executive assistant" representatives yesterday. I am still waiting for ANY answers. This service rep's name is Barbara McKay. Try it: Ms. McKay: As I just told you, as I was undergoing customer-harassment exercise of setting up a "PIN" for my account, the process asked me to provide answers for what were apparently information verification questions. Two of these questions suggested that you already have in your possession the square footage of my house and the year I purchased it since each question gave me five options for response, one of which was, in fact, the correct one in each case. I have never, to my knowledge, provided Sprint with this information, nor is it clear to me what business it is of Sprint's. Within 60 minutes, please answer the following questions: 1) How did Sprint get information on the square footage of my house and year of purchase? 2) Why did Sprint get this information? 3) What is the business purpose of your obtaining and holding this information? 4) If you obtained this information from another party, please identify that entity by name, corporate address and corporate phone number. 5) When will you stop using this otherwise private information? 6) Can you absolutely assure me that Sprint will never, under any circumstances, share this information with any other entity or person? 7) Is invasion of customers' privacy a routine part of Sprint's business model, or have you only recently embraced invasion of privacy as a business tool? 8) Does Sprint have any future plans to establish a viable customer service department? You surely can't think you have one now. 9) Please identify and provide all other personal or business information Sprint currently maintains relating to my account, together with a statement of the business purpose for your maintaining each piece of this information. 10) What is the name, address and phone number of your corporate legal department attorney or outside counsel who handles litigation against Sprint concerning invasion of customer privacy matters? 60 minutes, please. Thank you.

[#14]

Post back if you get a response from Sprint!

[#15]

It was the untruthfulness with regards Plusnet's introduction of their Traffic Management System that drove me to leave. I really cannot understand the logic in Plusnet's introduction of awfully complex and discriminatory shaping practices based on content, than implementation of a much more simple bandwidth usage cap. Still, I don't see either as good, though. It was apparent to me that chances were high Plusnet were struggling to cater for demand. Maybe they wasn't investing enough into infrastructure, or had priced their products too low, or fell victim to unforseen changes in consumer behaviour, but whatever the reason thei actions in an attempt to correct this problem was, in my opinion, a bad one, and enough to cause me to lose confidence in the company and move. The whole company just seemed to dive headfirst into oblivion from about this point. I'm really glad I left and at present have no intentions of ever returning (it's always possible things could change in the future though).

[#16]

I think a lot of people felt the same as you XPNet, and by posting this I don't expect to change your mind about PlusNet. I would appreciate the opportunity to provide our view on events of that time though. The first thing we would always do is acknowledge that our initial implementation of traffic management lacked the care and attention customers deserved. It is easy to believe that was all about chasing profit or under-investment, but that misses a lot of the story. I would agree that cost ultimately drove the decisions that sent us spiralling into the dark period, it wasn't a chase for profits as much as a punishment for trying to push the boundaries too far too quickly. When ISPs like us were paying in the region of £240 per Mbps per month (ie, a customer using a constant of only 512K each day cost us £120 each month), it was inevitable that a crunch point would come. Once usage was costing more money than was being received in subscription revenue on a mass basis, something had to change. As speeds increased but wholesale costs didn't it was inevitable that ISPs would need to act if they were to stay in business. It so happens that we were among the first to suffer and to have to take action, and I believe that is mainly because we chose to implement a mass free upgrade program to 8Mbps, which drove up average usage a lot more than we had predicted. We were also expecting certain wholesale savings that never materialised at the time, and that left us in a very difficult situation. Had we done nothing at all, I firmly believe we would have impacted and upset a lot more people, and as a result wouldn't still be here today. Our problem was that we failed to set realistic expectations with our customers about the economic situation we were in, instead making them suffer without really explaining what had happened. The traffic management principle was always quite simple in that it was designed to be non discriminatory. What we aimed to do was prioritise real time traffic (where people sit interacting with the data doing things like web surfing, streaming media, gaming etc) over traffic such as downloads, which can be left unattended. We were far from the only ISP who had to deal with the same issue, and across the industry the same problems have occurred (See the current Tiscali issues for an example). No one out there is truthfully offering consumer priced Unlimited connectivity, and everyone is operating some form of traffic management. Our priority now is to keep setting realistic expectations with customers about what they can expect from our products and then deliver on what we promise, at the same time providing the best value we possibly can. That couldn't represent more of a change from our previous approach and I think it's now bearing fruit. We are back to offering exceptionally good levels of support and service, and are winning plenty of accolades once again. As I say, I appreciate that you can't easily believe that much of a change could have occurred and whatever I say won't make a difference to your perception. If you do ever want to try us again, please feel free to get in touch with me directly and I will be happy to do anything I can to help. Kind Regards, Ian Wild

[#17]

Thanks for that Ian, but the bottom line is - no matter what the problems were that +net were trying to address at that time (and IMHO these seem to be mostly of their own making). It in no way excuses the lack of openess towards your most valuable asset (your customers) concerning what was really going on. I left because you (as a company) lied to your customers ........... and so you lost my trust,and you lost my money !