Sabkush Headlines: Sprint Nextel makes strides to improve image

Sabkush Headlines: Sprint Nextel makes strides to improve imageSprint Nextel makes strides to improve image

On Tuesday, Dan Hesse, the companys CEO, will be on stage at Forrester Researchs Customer Experience Forum in New York City to discuss the companys efforts to improve its brand image and customer satisfaction levels. In 2010, Sprint emerged as one of three firms with the biggest improvement in Forresters annual Customer Experience rankings based on a survey of more than 4,600 consumers. Sprint, which is the third largest wireless provider in the U.S., saw its customer satisfaction rating sink to desperation levels a few years ago. But since Hesse took over as CEO two and a half years ago, with a focus on improving customer satisfaction and reviving the companys brand, the company has seen steady improvements. "A year ago, Sprint was in the toilet," said Harley Manning, a vice president at Forrester Research. "But theyve made a concerted effort over the past two years to really turn things around. And now theyre within spitting distance of the other major wireless carriers." Out of a potential 100 points, Sprint went from a rating of 45 in 2009 to a rating of 60 in 2010. While the company still ranks the lowest of all four major U.S. wireless operators, it is not far behind the industry average rating of 65. And if Sprint continues to improve at this pace, the company could lead in customer satisfaction next year. "Sprint has essentially gone from Do not subscribe to my service under any circumstance to being on par with its competitors," Manning added. "And if the momentum continues, and the company makes an improvement of that size again next year, it will certainly shoot past its competitors in terms of customer satisfaction." A bad reputation Sprints reputation for poor customer service and poor network coverage was years in the making. But network and billing problems after the company bought Nextel in 2005 exacerbated an already fragile image. Dissatisfied customers left in droves every quarter. Meanwhile, Sprints competitors, AT&T and Verizon Wireless, gobbled up these Sprint defectors, adding millions of new subscribers every quarter to their rosters. In 2007, Sprint continued to damage its reputation by sending already dissatisfied and disgruntled customers letters terminating their service for calling customer service too often. Finally, as its reputation sank so low and the blood-let of customers was so bad, the companys board of directors ousted then CEO Gary Forsee. A few months later at the end of 2007, Hesse was hired as chief executive to turn the company around. The first order of business for Hesse was to repair Sprints damaged reputation with a new focus on its customers. "When Dan took over in the fourth quarter of 2007, he outlined three main priorities," said Bob Johnson, chief service officer for Sprint. "The first was to improve the companys cash standing, and the other two were to improve the company brand and improve the customer experience." Johnson said that a two and a half years into Hesses tenure as CEO, the three priorities remain the same. "Dan has created a culture around satisfying customers," he said. "Every staff meeting we have starts off with discussing the customer experience. We analyze the data and see where the pain points are and work to improve them." One of the most important changes Sprint made was focusing on resolving customer issues on the first call to a customer care agent. Making the resolution of the customers problem a top priority for care agents helped focus the staff in the call centers, Johnson said. Sprint also changed its compensation model for employees and outsourced call centers. The company tied customer satisfaction directly to compensation for employees. It applied the same model to its outsourced call center partners. Call centers with higher customer satisfaction levels were awarded more calls, while lower performing call centers were phased out. As a result, Sprint has been able to consolidate its call centers and reduce the number of centers it had from 74 to about 44 in the past two years. This reduction has helped the company achieve its objective of serving customers. And it has had the added benefit of reducing cost for the company, which has also helped to achieve one of the companys three main priorities, improving its cash position. As Sprints customer satisfaction levels rise, the company is able to further reduce its the number of calls to customer care, which allows it to continue to consolidate its operations. "Two years ago, our customers called us twice as often as customers for Verizon Wireless or AT&T," Johnson said. "Fast forward to now, and we are in line with our competitors. Instead of the average customer calling us twice a quarter or eight times a year, they are calling us once a quarter or four times a year, which is how often they call our competitors." Manning said that Sprint is on the path toward changing itself from a company that is product-focused to being a company that is customer-focused, which ultimately leads to success. "There arent many companies that say they dont care about their customers," Manning said. "But actually doing the tactical work to change the organization and culture, such as changing compensation and making one executive accountable for the customer experience, is something different. And Sprint is doing it."