Retention 101: Refuse to Let Customers Cancel

Last Updated Aug 27, 2007 8:07 PM EDT

stuck.jpgCustomers know they can benefit from retention plans, and oftentimes people will cry "cancellation" to squeeze more out of a service provider. But sometimes those customers just don't spend enough to warrant fighting for them. Maybe that's why Sprint's been making it difficult for some customers to cancel their service (which may account for its decreased churn rate, down from 2.1 percent a year ago to 2 percent this quarter).

Ironically, Sprint terminated service with some of its customers earlier this year because they called in too frequently with questions and/or complaints. Perhaps their hard-cancel tactics are an attempt to offset those customer losses. Or maybe it's the other way around; weeding out the "problem customers" offered them a better chance of pleasing and retaining their customer base as a whole.

How can a company hold on to all its customers without giving away the store? Well, you can do it Sprint's way if you want to end up like Time Warner's AOL division (just recently, AOL came to a $3 million settlement to avoid going to court after making it difficult for customers to cancel). Or you could improve your loyalty programs -- one area where Sprint's been lacking. Currently, Sprint only rewards businesses that spend over $250 each month. Spokesman Roni Singleton claims the company would consider it if more people asked for it.

If Sprint reads the Business Week article about failed cancellation attempts, it will hopefully get the picture: customers won't ask to be rewarded for loyalty. They'll just try to go somewhere else where they won't have to ask.

(Stuck Image by Pi-[P])