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Customer Experience Management (CEM)

Sprint Slips Back in Customer Service

News Analysis Sarah Thomas, Director, Women in Comms 11/21/2013

Sprint's biggest source of pride has been its climb from the bottom of the customer service rankings to the top in recent years, but it looks like it's slipping once again.

According to Consumer Reports' latest annual cellphone service rankings, Sprint Corp. (NYSE: S) was the lowest-ranking carrier in terms of customer satisfaction, scoring "dismal" marks. Last year, it was second only to Verizon Wireless , but this year, the 58,399 customers surveyed dinged it for value, voice, text, and 4G reliability.

The top slot in customer service this year went to tiny, contract-free MVNO Consumer Cellular. It even beat out AT&T Inc. (NYSE: T), the network on which it runs. In general on the survey, prepaid providers ranked higher than their contract peers.

Verizon Wireless retained its top position among the big four, ranking highly in data service. It was followed by AT&T, which got top honors for the reliability of its 4G service, and T-Mobile US Inc. , but Consumer Reports says both AT&T and T-Mobile received "ho hum" markings.

Why this matters
Given how much Sprint has talked up its improved customer service under CEO Dan Hesse, its fall from grace is a big blow to the company's ego. Sprint's issues are, however, not surprising. The carrier is working through network upgrades under Network Vision that have affected its service. While its acquisition of Clearwire and by SoftBank Corp. should help tremendously in the long run, Sprint's customers might not be aware of what's going on behind the scenes. And Sprint hasn't been aggressive with offers and promotions in the meantime.

The findings related to smaller prepaid carriers are also notable, suggesting that consumers like the simplicity of monthly usage allotments with no long-term commitments. Consumer Reports also found that 38% of people use half or less of their monthly data plan, which could imply they are overpaying for data and need more help getting the right plan at the point of sale.

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— Sarah Reedy, Senior Editor, Light Reading

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Sarah Thomas 11/25/2013 | 9:56:21 AM

Re: Contracts I think they are doing other things right too. Some of the contract-free guys are also regional and tend to know their customer base better and make a bigger effort in their local community. I've also seen others like C Spire doing a lot more with customer service and community, offering C Spire Perks to their customers in partnership with other retail outlets. I think they're often more creative, because they are forced to be.

But, like KBode, I hadn't really heard of Consumer Cellular before this either...

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DOShea 11/24/2013 | 10:53:55 PM

Contracts Not forcing customers into contracts is a former of positive customer service, though most of us probably feel there us much more to it than that. Yet, the contract-free and prepaid carriers do pretty well in customer service ratings. Are they doing a bunch of other things right, or is this all the big carriers need to do to get better ratings?

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MordyK 11/22/2013 | 1:47:05 PM

Re: The MVNO bright spot The passive aggressive approach always works :)

Even if they didnt try to prevent some devices from being activated on their MVNO's, the cost of devices is still high if you're paying for it upfront.

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Sarah Thomas 11/22/2013 | 11:59:53 AM

Re: The MVNO bright spot I had that some question, Mordy, although raised it on the other Sprint blog yesterday. If the device you want is on an MVNO with a much cheaper plan, why not switch to the MVNO? It's the same network and everything else. Sprint has a BYOD policy for its MVNOs so the selection is improving, although I've seen complaints that it is restricting some key devices from the BYOD policy.

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Sarah Thomas 11/22/2013 | 11:57:49 AM

Re: Delivering value over others' resources Yeah, it's interesting that some of the MVNOs get a much better reputation than the network they are on. I'm sure it's for valid reasons to as their pricing models are often much better, even if there customer service is actually the same. But I wonder if their customers really know or fully understand that they are on AT&T, Sprint or whichever network. Some MVNOs advertise that, but others don't mention it at all.

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MordyK 11/21/2013 | 3:08:52 PM

The MVNO bright spot As you pointed out the slide in Sprint's numbers are to be expected, but what I find intriguing is the data onthe MVNO's. Most high post-paid customers and even many prepaid customers on the networks own plans stick with them out of a sense of comfort, but if MVNO's can highlight that they're experience is actually an improvement what's stopping the high end customer's from going MVNO prepaid? That said most MVNO's have a shoddy device selection so they need to create a form of financing program for high end devices from the parent networks akin to T-Mobile's financing plan.

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tb100 11/21/2013 | 3:03:41 PM

Re: Sprint The network isn't quite everything. They need customers to pay to build out that fancy new network. Softbank doesn't have infinite money.

Yes, customer bases may be in the millions, but Sprint lost over a million Nextel customers. I heard that in exchange for taking away their phones and network, they were offering them a free phone with a new two year contract, which is what they offer...everyone else.

I think their handling of their Nextel customers shows really bad execution. Let's hope they don't continue alienating their customers as they build out their new network or they'll go broke before it is finished.

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theschnack 11/21/2013 | 2:59:35 PM

Delivering value over others' resources Just a quick comment. Consumer Cellular and other no-contract, prepaid providers are great stories in the way they find ways to "add unique value" delivering services atop OTHERS' resources (such as AT&T's networks). I am quite happy to see them and others (such as the wildly disruptive Free) shake things up and keep everyone throughout the industry on our toes.

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RitchBlasi 11/21/2013 | 2:29:46 PM

Re: Sprint promotions I think you are probably correct Sarah - maybe customer service folks supporting many of NexTel/Sprint P2T customers? That was a large cash cow for Nextel.

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KBode 11/21/2013 | 1:59:46 PM

Re: Sprint promotions There's still a lot of lingering brand trauma centered around that Nextel fiasco.

I also still see a lot of customer complaints about LTE coverage being nowhere near where Sprint's maps and launch announcements claim, and Sprint keeps showing up last in most of the major LTE speed tests. And whereas T-Mobile is seeing success by trying to be more consumer friendly, a lot of Sprint policies have tended toward being more like AT&T and Verizon over the last few years (not that this appears to imnpact Verizon's scores on such surveys).

Maybe as Softbank integrates their DNA into Sprint and the dust settles from the flurry of acquisitions and deals this will change? Sprint's press statement certainly seems to hope so.

Is it bad if I write about this industry and have never, ever heard of Consumer Cellular? :)

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