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A project to make businesses more aware of their customer experience, and how to fix it. By Mark Hurst. |
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Previous: Shaving cream label | Main | Next: Fourseasons.com reservation form
July 28, 2005 12:07 AM
Broken: Sprint PCS lock-in policy
From Cam Barrett: How Sprint PCS Loses Customers.
Hear, hear!!!
The whole "contract" thing is broken in general. I'm not the type of user who ever gets a "free" or subsidized phone with my account, I usually am an early adopter (Treo). So they can't claim they are locking me into a contract to recoup an investment. And on top of it, when I moved from a Treo 300 to my current 600 a few years ago, I had to--you guessed it--sign a 2-year contract.
Ridiculous. Seriously broken. Let's face it, cell phones are a utility these days. What other utility requires a lengthy contract?
Verizon customer for several years. I have a free phone I provided (not Verizon). I wanted to update my phone, willing to pay something, just not full pop. They told me that I had to wait until my 2-year contract was up before I could get ANY discount. I said, "I pay $960 for my phone service. I've got 3 months left on my contract. You can't give me a small discount?"
"No, sir, you have to wait until your 2 years is up, and then sign a new contract."
"Okay, I'll sign a new contract now. I need a new phone. Mine is in bad shape."
"No, sir. You have to wait until the 2 years is up before we can give you a new plan with a new phone. However, we do invite you to shop from our great selection of phones at retail price."
It's just stupid customer service to make someone who's paying nearly $1000 per year wait until their contract is up before giving them even the smallest discount on a new phone.
Customer churn is a big problem for cellular companies. Contracts are a mechanism they have devised to reduce the number of people switching providers by locking them in for a period of time. The problem is that there does not appear to be a policy in place to recognize longtime customers who are not likely to switch, and thus do not need to be locked in, and thus annoyed by a policy designed to deal with a different customer segment.
Okay, I hate cell phone companies and contract commitments, but I have to side with Sprint on this one. Why should a company change its policy just because someone says they are a loyal customer? Even after Sprint reduced the contract term in half and added a 5% discount, this guy still rejected their offer, so he doesn't really seem like the loyal customer he says he is.
yeah, that's broken, but what's really broken is fine print text that you have to squint to read. that's broken.
UNfortunately, you can look until the end of time if you want, you will not be happy, every phone cariier has the standard practice of tying all sign ups, whether new or reisign, to a contract to ensure they can get their money from you. We may hate this policy, but when all the carriers hold this policy, there is nothing we can do about it. WE ARE BEING SUPPRESSED BY THE MAN!!
A relevant article in today's NY Times:
Sprint Says Its Profits More Than Doubled
Sprint, the telecommunications provider, said yesterday that its profits more than doubled in the second quarter, with growth being driven by adding and retaining more wireless customers.
So it appears these 2-year contracts are working well for Sprint as a company...
While all cellular phone companies tie you in for an initial contract period, there are a few that are absolutely ridiculous and try to coerce their customers into staying on pains of usurious exorbitant charges.
Case in point: SunCom (aka Triton PCS, until recently the AT&T Wireless provider for the central east coast). They since changed their policy, but only after screwing me over so bad I will NEVER go back as a customer.
SunCom locked you in for the initial contract period, usually two years. Big deal, everybody does.
What SunCom then did was bury small print in the contract that they very carefully avoided mentioning, and glossed over if you asked about it. That small print said that you had less than 30 days after your contract expired to drop the service or the contract self renews for the same period. Oh, and you have to notify them 60 days before you want to drop service.
So you had to call them within a less than one month period two months before your contract was up or pay $200 PER LINE ($400 for my two line account) to disconnect. They made it virtually impossible to disconnect without penalty, and they were adamant about their policy: Multiple phone calls, letters, e-mails, complaints to the BBB, escalation all the way to corporate offices, nothing would get them to waive any fees. All for a customer who wanted a TEMPORARY disconnection due to a year long company assignment outside of their service area. In other words, a customer all but guaranteed to return and bring his business back with him if treated properly. A customer who had already been a customer four years and fulfilled whatever subsidy had been given for the two phones provided.
As it was, they alienated a loyal customer so much that I was very careful to jump through their ridiculous hoops so I could no longer be a customer. I will never do business with them again, and strongly recommend that nobody else ever do so either, nor with any other company that isn't willing to keep your business by being a better choice and creating a better experience than any other company, rather than forcing you to stay by restrictive clauses and baseless fees.
They have since changed their policy and their customer service agreement to align with the rest of the industry, so that contracts now go to a month-by-month basis after the initial period rather than auto-renewing as they did before. Too late to get me back as a customer. They not only burned that bridge, they blew it clean up.
Ben:
If you are using Internet Explorer, you can read the article more easily by going up to the View pull down menu, selecting Text Size, and choosing a larger size.
this makes me glad I have a prepaid cingular service, no contract at all, and I pay as much as I need :)
my mother has a two-year contract with cingular and her reception is poor when at home she has to step outside to be heard.
On the otherhand I'm also with cingular with the Go plan (no commitment) and receive excellent reception including in her home.
Random,
Sprint does not have to change their policy. And the customer has a choice, which is to no longer be a Sprint customer. Contracts are not a one way street. In this case, Sprint has chosen to decline the counter offer from their customer.
But from a customer experience standpoint, the customer's feeling is that their loyalty to the product is not being rewarded, or taken into consideration. The offer of a reduced contract period, did not kick in until the customer raised a ruckus and escalated the problem to a supervisor. Not a good customer experience.
As a longtime (6+ year, always paid-in full, on-time) Sprint customer and while driving north under intense pressure last fall, I phoned Sprint to request an emergency change of plan. With my Florida home under dire threat of total destruction from hurricanes, and an adult son undergoing extreme surgery up north, I badly needed more daytime minutes. I was told sure, no problem, and that I could change back within 30 days with no penalty. Not true. It took two months to get Sprint to revert to my original plan, and the whole deal set in motion an entirely new 2-year contract, with NOTHING signed by me! (I had said I don't want a new contract date and was told the temporary change would not affect my original plan. Hello?) I've gotten nowhere with Sprint making things right. Now I'm angry, and am looking for a new carrier to take over when this contract expires.
I really don't like Sprint. I had such a bad experience with them that I ended up having to get the FCC, the Better Business Bureau (did you know there is a special BBB office dedicated soley to handling complaints about Sprint full time), my state and federal representatives and senators. In the end, I was still unhappy. Here's what they did: I bought a business line from them and they set it up in an area that was long distance from me, which caused many of my customers to get a 'this number is not in service' message, causing them to assume I was out of business, losing many customers. I had to figure out on my own they gave me a bogus prefix. It took 3 months and Sprint wouldn't help with it at all. In the end, a friend who works for Verizon (go Verizon) spent an entire day tracing down the problem. I estimate my business loss to be in the tens of thousands of dollars because of not just their screw up, but their refusal to fix it. All the senators and BBB were able to do is force them to cancel the contract - the jerks at Sprint were trying to force me to keep a number that was long distance from myself.
Wow, did this come in the nick of time! I was looking at Sprint, was considering SunCom, and now I'm not going to go with either one. I do NOT want to get locked into doing business with any company that treats its customers like either of those. Had enough of that with AT&T....
Of the companies mentioned here, Verizon still looks like the best one. Any comments to the contrary? I'm looking for coverage in VA and MD, and would go with Intelos if they actually had any service area.
Yep, like Vic, this is the exact reason I do pre-paid cell phone service. I'll pay for what I use and nothing more and am tied to nothing.
verizon is by far the best carrier out there...i have been with them for several years, (since they were bell atlantic) and have had zero complaints.
i understand what people are saying about prepaid, but one must also keep in mind that it is usually about twice as much per month for prepaid than it is for contractual plans.
also, as an employee of radioshack, i deal with sprint on a daily basis. they treat us the same way--then punish us for not selling enough of their phones. seems broken to me!
i have always hated sprint i to used to be a customer of theres but for some reason they always seemed to find a reason to turn my phone off on me, then they would not send me my mail in rebate cuz they said that i had to have my phone for 90 consecutivly, that was it for me, i went to alltel pre pay, best thing i ever did, its not bad 45 dollars gets me 300 any time min 3000 night and weekends and umlimited txt, plus cool lil free flip phone...and i dont have to go pay those danm cards, i just go on my billing cycel and and pay thats it..and no contract, and there customer service is really good too
sprint is so broken all the way around..
i have always hated sprint i to used to be a customer of theres but for some reason they always seemed to find a reason to turn my phone off on me, then they would not send me my mail in rebate cuz they said that i had to have my phone for 90 consecutivly, that was it for me, i went to alltel pre pay, best thing i ever did, its not bad 45 dollars gets me 300 any time min 3000 night and weekends and umlimited txt, plus cool lil free flip phone...and i dont have to go pay those danm cards, i just go on my billing cycel and and pay thats it..and no contract, and there customer service is really good too
sprint is so broken all the way around..
Just remember that, despite the longer contract period, customers are getting wayyyy more for their money than just a few years ago. Does any carrier NOT offer unlimited night and weekend minutes now? Rolling over unused minutes, adding more minutes, offering phone rebates, and tons of unlimited usage data services are things customers wouldn't have dreamed of just a few years ago. Also, understand that wireless carriers sell phones at a BIG loss. Customers pay a fraction of what the phones actually cost, which means the only way for the carrier to make money is to keep those users and persuade them to buy extra stuff like ring tones, screen savers and streaming video. That being said, customer service does royally SUCK, industry wide. No excuse for that.
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yeah that is kinda shoddy, the only way that would be reasonable if is he got a new phone when he switched...
Posted by: Vic at July 28, 2005 01:08 AM