Profitable Customer Relationships Term Paper

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Profitable Customer Relationships

Until about two years ago I was a long-suffering customer of Sprint. During the time I subscribed to their service, there just always seemed to be a problem that needed resolution: Billing disputes over services I didn't subscribe to. Dropped calls even though I lived within their alleged coverage area. Expensive calling plans. Customer service people who weren't empowered to tie their shoelaces. I could not wait for my contract to expire so I could switch to another cell phone carrier and be abused by them instead.

So in preparation for writing this paper, I googled cell phone customer satisfaction surveys, and which company is right there at the top? None other than Sprint. For a moment I thought I must have misspelled Sprint. S-P-R-I-N-T. But no, there they were. Just to be sure I wasn't hallucinating, I looked at older surveys, and there was the aha moment. In May of 2008, Sprint's customer satisfaction rating had indeed fallen to an all time low. The same online article mentions "Sprint is embarking on an aggressive turnaround plan, which includes new plans and devices and better customer service" (Luna).

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I will refrain from making any comments about locking the barn door after the horse has been stolen; apparently they did manage to turn things around.

Why did Sprint lose focus on maintaining customer relationships? There are several possible answers. They probably were distracted by the Nextel acquisition. There is no doubt they were more focused on competing with AT&T, Verizon, T-Mobile and others. But having offered those possible explanations, another observation is in order. When a company's service is that bad, those statistics are symptomatic of a management team that just does not get it. They would rather spend from 5-10 times more to attract new customers than retain the ones they already had.

Well-run companies find ways to maintain balance between competitor and customer orientations. One such company is Marriott. The following management principles were established by J. Willard Marriott himself:

A businessman once said,….....

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