THE BLOG
09/07/2007 02:32 pm ET | Updated May 25, 2011

Sprint, Gillette, et al. - When Bad Customer Service Is the Business Model

People who spend endless hours on the phone with companies like Sprint are well aware that they're receiving terrible customer service. Unless they have a business background themselves, however, they probably don't realize how often bad service is part of a company's business model. Too often, corporations look at the cost of providing a quality customer experience and make the conscious decision to save money instead. They do it because they know that the public doesn't understand its choices - or doesn't have any.

Take my experience with Sprint this week. I had to call their customer service department three times over a 48-hour period to correct problems of their making. (Two calls involved a problem with their website and email system, and the third involved a company billing error.) My wait times for these calls were eleven minutes, thirteen minutes, and thirty-six minutes, respectively.

That doesn't count the time spent actually resolving the problems. One service rep even insisted I wait on the phone with her for several minutes after we were done. She said there was a "rule" I had to remain on the line while their computer updates its records.

Two of the companies I ran had call centers, and I consult for several others, so I know the business fairly well. Sophisticated technology enables call center managers to predict call volumes, handle unexpected spikes in volume, and provide immediate feedback to callers on expected wait times.

So what does that tell us about my Sprint experience? It says that Sprint is probably well aware of the long wait times experienced by its customers, and finds them acceptable. The company probably doesn't want to invest in the staff it would take to reduce them. (I offered Sprint's corporate communications department a chance to respond, but they ignored it - or else they're still on hold ...)

When I asked the service representative how much of a concession the company was willing to offer for my lost time, she offered $10 worth of free minutes. That comes out to about $4.00 an hour - less than minimum wage. Divide that number by ten - assuming that about one customer in ten asks for any consideration for their trouble - and you get an idea how much value Sprint places on its customers' time.

Not only do the wait times reflect corporate priorities, but the service rep hadn't been trained in customer service. That's not her fault, but her management's.

Their decisions make some business sense. Thanks to the lack of meaningful oversight, companies like Sprint are able to lock their customers into lengthy and confusing contracts, and to charge for incomplete calls and other unsuccessful transactions. Customers can't terminate phone contracts because their carrier fails to provide adequate service, so they have no recourse.

Sprint execs are also aware that their competitors are equally weak in the customer service area - so what alternatives do their customers really have?

This is where government can actually foster competition and free enterprise, rather than stifle it. When near-oligopolic conditions exist, new entrants aren't able to come in and offer a better product - in this case, a phone carrier with decent customer service. Today's giants give generously to both political parties to ensure there's no real change.

That's why I like to make the distinction between politics that's "pro-business" and politics that's "pro-big-business." Today, Washington is dominated by the latter. By flouting market laws that demand decent service, however, companies like Sprint are increasing the risk of a political backlash.

The "Bad Customer Service Model" has a fairly long history. I attended a management training seminar in the nineties - the kind where you and your colleagues make a house out of string blindfolded, so that you "bond." (We would have rather been "bonding" by being back in the office, helping clients - but the parent company thought they knew better.)

Part of the seminar included - inevitably - training in how to "think outside the box." They offered several examples of what they considered impressive out-of-the-box thinking. One was the telephone company that added heavy weights to the handsets in their phone booths, so that customers would grow uncomfortable and end their calls quickly - without ever consciously realizing why. The result was that this utility's customers were getting less for their 25 cents than they had before.

Brilliant! said our trainers.

Another example given was Gillette. By now, Gillette is famous for selling its razors at a low price, but charging exorbitantly for the cartridges. (Hewlett-Packard does the same thing with its printers.) Brilliant! said the trainers.

Sprint and its competitors are following a decades-old but growing tradition of using Bad Customer Service as a management strategy. Unless there is a concerted public movement to resist bad service - and some political accountability for the politicians that support it - Bad Service will continue to be the new "killer app."

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RJ Eskow at the Huffington Post