Sprint tries to clean up customer service mess

June 3, 2008, 12:42 PM UTC

By Michal Lev-Ram

Ever since Sprint acquired Nextel in 2005, the company has become the poster child for poor customer service. It has repeatedly received the worst marks of all five major U.S. mobile operators in a semi-annual customer care survey by J.D. Power & Associates, and has been bleeding subscribers by the millions for the past few quarters. Sprint’s (S) new management has said that fixing its customer service problem is the number one priority for the company. To that end, it’s enlisted chief service officer Bob Johnson to make some sweeping changes to the way Sprint runs its call centers, handles account setup for new subscribers and charges for its monthly plans.

Fortune spoke to Johnson, who took on the job last October, to find out how Sprint is trying to change its ways – and its reputation.

How big of a priority is fixing your customer service problem?

Dan [Hesse, Sprint’s CEO] has made it clear that this is the number one priority. This issue has tentacles to so many other aspects of our performance. This is why I have been given the honor of starting each weekly operations meeting. And we are now working together cross-functionally to address all of the “pain points” in the customer experience.

What is the number one reason customers call in and why is it so difficult to help them?

The highest volume of calls is for billing errors – these are typically generated through the account setup process. But there are really two problems here. The first is what we call the “upstream problem.” This is the reason customers call in the first place. Then there is the “downstream” problem – this is what happens after a customer actually gets on the phone with one of our representatives. We used to pay our agents based on average handle time. And if you think about it, if you have an incentive to have quicker calls, you will try to get off the phone as fast as possible, and you won’t necessarily solve the problem the customer is having. So it used to take an average of four to six calls to get a billing problem solved.

So how is Sprint addressing this issue?

In February we started using a new metric called “first call resolution” instead of handle time as a way of measuring a representative’s success. This means that whenever possible we address the problem completely on that first call. We don’t want that call to have to go from one center to another.

What are you doing on the “upstream” side — to make sure that subscribers have fewer reasons to call in the first place?

Many people call in with billing problems, especially overages [fees for using services like texting and data beyond what’s allotted in their plan] so in March we launched “Simply Everything” [an unlimited voice and data plan that costs $100 a month], and throughout this year you will see more and more simplified pricing from us. We are also getting our customers’ electronic signature on their account order in stores at the point of sale so that we can verify that this is in fact what they ordered. Then, for all new activations there is a welcome call – the first call that a customer makes is intercepted and a representative goes over what is on their account with them.

As of end of May we have also completed a 14-month process to convert all of our customers to one billing system. So customers that have both CDMA and iDEN [the two networks operated by Sprint] phones are now on the same billing platform, with one look and feel.

Are you seeing any results from these changes?

We’re already seeing improvement. I am a long way from declaring victory, but we have improved in two key areas – first-call resolution and customer satisfaction – for four consecutive months now.

But it’s not just improving the actual customer service you give subscribers, it’s also changing the company’s image. How long do you think that could take?

There is a lag time between customers experiencing an improvement and them getting the word out. How long will that take? I don’t know. I do know that we’re making progress. But this is more like steering an ocean liner than a speed boat.