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A Lost Customer Service Opportunity

May 22, 2006 at 11:24 pm by Will Crawford in MBA | 12 Comments

I didn’t want to knock the Carnival of the Capitalists off the top of the site so quickly, but needs must when the devil drives. T-Mobile, my mobile phone provider, just lost an excellent opportunity to make a customer very happy. What follows may start to sound like a rant, but it gets back to business at the end.

A few weeks ago, I was down in Washington, DC for some meetings. The meetings went very well, and I flew back to Cambridge a happy man. I remained happy until the following morning, when I determined that my cell phone was still in DC. Best bet is that it ended up in the taxi. Within 15 minutes I was down at the T-Mobile store in Harvard Square, having the phone canceled and a new SIM card inserted into my old Nokia. A few days after that I went back and upgraded to a new service plan and a T-Mobile MDA Smartphone. This was about three weeks back.

About an hour ago I was sitting on the couch paying bills, and took a look at my just-arrived T-Mobile statement. $412. Apparently, at some point before I realized the phone was missing, somebody made a dozen calls to Pakistan, totalling about $350. This was all before I realized the phone was even missing.

I called up T-Mobile support, and was told, basically, to buzz off. They weren’t rude, per se, but the attitude was that I didn’t report it, so it wasn’t their problem, and there was nothing they could do. I spoke to a supervisor who gave me the same line. At the end of the call, nothing, although I did learn that they don’t have any screening programs in place to identify odd calling patterns (something the credit card companies have been doing for years, probably because they’re actually liable).

The truly annoying thing is that I expected this to be an easy thing to resolve. The phone was stolen, I reported it as soon as I noticed (although at the store, not on the phone), and this is the sort of thing they must deal with all the time. Fifteen minutes on the phone and we’re done, right? All of my previous T-Mobile customer support experiences have been excellent; I would have rated them var better than Verizon was. I was not just a good customer, I was an evangelistic customer.

So T-Mobile gets an extra $350 from me. What have they lost? Well, for one thing, I’m very unlikely to renew with them, and if I hadn’t just bought an expensive new phone (now past the 14 day return period, of course) I’d drop them right now, particularly as I’m doing less international travel and don’t need the world phone capabilities as much. Once my contract is up, I’m gone. And I spend about $600 a year on mobile phone and data services.

And they’ve lost me as a satisfied customer. In the past, I’ve encouraged people to use T-Mobile and spoken highly of their data services and hotspots. I know for a fact that at least two people went with T-Mobile on my recommendation. I don’t know what plans they went with, but call that $400 a year in revenues for each. I won’t be doing that anymore. And, of course, I’m currently writing an angry blog post about it; can’t imagine that helps any, although I should be honest and admit that I don’t think it’s going to hurt them much either.

But from a pure cash flow perspective, they’re out $600 a year from me, a cash flow they otherwise might have had in perpetuity. Having a process in place to credit me back for $350 in obviously fraudulent charges would not have been too high a price to pay for that, particularly since the real cost is probably a lot lower: the margins on international calls are reasonably high, particularly for cell phone carriers.

T-Mobile probably doesn’t want to make credits too easy; otherwise support will be deluged and the impact on the bottom line will be substantial. Adverse seletion issues abound. But by not giving their staff any lattitude at all the customers with legitimate grievances (albeit initially with the taxi driver, airplane cleaner or whoever found my phone) don’t get helped, and then they aren’t customers any more.

There are some generalizable lessons here. First, give your customer support people the ability to help customers in situations where the psychic impact is high. It pays off. In this case, I had a phone stolen, which was bad enough, and then got hit with hundreds of dollars in charges. Customers in that kind of situation represent an opportunity, and not just to bill for calls to Pakistan! Help me out, and I’m going to be willing to overlook all sorts of things, including the lousy T-Mobile coverage around MIT.

Second, one bad experience can cancel out any number of good experiences. Loyal customers are sometimes used to being smacked around – look at Apple through much of the 1990s – but that tolerance ends quickly when confronted with a multi-hundred dollar invoice.

12 Comments »

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  1. You should forward this post as a letter to the company president.

    Probably won’t do any good, but you’d be surprised. A lot of time they are smart enough to fix stuff like this when lower level managers are not.

    Comment by Jeff D — May 23, 2006 #

  2. Hi Will. Long time…

    I just happened across your blog today and enjoyed your post so much that I had to share a funny AT&T story from long ago.

    We were in a $50 dispute that they would not budge on (their billing error) so I switched the next day for free.

    Here’s the punch line: 1 month later I get a $100 voucher in services if I switch back to them for free. Needless to say I didn’t, tho I did call them back to “discuss” it.

    Hope you are well. Keep studying.

    Comment by Jim G — May 23, 2006 #

  3. I was sorry to read about this problem… and see by your post that it leads to a more widespread issue of lacking customer service. It seems to me that we are learing cynicism… sarcasm and pessimism… more… and that these are opposite values to basic service that extends good will to customers…. What do you think?
    Brain Based Business

    Comment by ellenweber — May 27, 2006 #

  4. Carnival of Capitalists – Downunder Edition…

    Role up! Role Up! to this week’s Carnival of the Capitalists (being hosted from Sydney, Australia). I am your host, Leah Maclean, and I hope that you enjoy the 42 submissions to this week’s carnival. Take a moment to not…

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  5. Memorial Day Money…

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  6. Will,

    I have a couple of thoughts. First and foremost, I agree that T-Mobile should have treated you better and that they should have offered to waive the charges. The cost to replace a customer is high and very likely close to the revenue they would have written off.

    However, I also think that you should have been more proactive to limit the opportunity for damages. Assuming you had access to either a land line or the internet you should have been contacted T-Mobile to suspend your service. If you had discovered your credit card missing would you have waited or would you have contacted the provider immediately?

    And before anyone mentions that most credit card companies limit your liability, this is primarily due to federal laws that require them to, not because they are overly concerned with your happiness.

    I do have one suggestion. Most cell phone companies allow you to downgrade your service with no penalty. You could change to a minimum level service and purchase a new phone from a new carrier. It is also possible to unlock many phones and transfer the phone to the new carrier (search cell phone unlocking). I did that with one of my phones for $25 and it works very well.

    Comment by D Palmer — May 30, 2006 #

  7. Actually, I was about as proactive as it’s possible to be–the missing phone was reported within fifteen minutes of my realizing it was gone. I happened to do it at the store rather than on the customer service line because the store is quite close to my house and I was going to walk down anyway. Had I chosen to wait overnight, that would be a slightly different situation, but fifteen minutes is a reasonable lag. Arguably, I should have taken inventory when I got back from the airport, and now that I think about it, I should have noticed when the flight took off – I must have not checked because it was already off for the meetings I’d been at earlier in the day. But still.

    And as for the credit cards, that’s a very good point. The credit card limit on liability does have implications for mobile phone vendors, though, because it sets consumer expectations. I know that I’m not liable for over $50 in fraudulent charges if my credit cards are stolen, and as such I’m likely to think about my phone in the same terms. So the disappointment when I’m not helped is that much greater.

    Credit card companies have learned the lesson pretty well, though. For instance, early in the Internet era Citibank agreed to waive even the $50 to increase customers’ comfort levels with online shopping.

    Comment by Will Crawford — May 30, 2006 #

  8. I don’t know if it helps… but I password protect my phone and all features. Need to hack that to get on and most joe blows cannot do that.

    I would also post your story to a few sites. The more we complain and get these issues out there. The more the companies will have to start making it right for the customer.

    Comment by barrie ontario business card printing — September 17, 2006 #

  9. Dealt with Cingular earlier this year for the same problem. Eventually did get it all credited back. Probably due to the combination that the call pattern was such glaringly fraudulant activity and that phone’s service was supposed to have been turned off(friends n family plan – jr. needed to actually start paying his own bills) and yet someone overrode the master account holder and turned it back on (we never did get a good answer on how). Then the phone was stolen from jr’s car and not reported for a week. $6000 in phone calls almost entirely to Afghanastan nearly non-stop. Doesn’t take a very smart person or computer program to notice something fishy. Especially when that phone has never made an international call ever before.
    Took months of calls to customer service to entirely straighten out. Seems to be typical of all cell providers that it will take days of argueing to get an adequete solution.

    Comment by michelle — January 12, 2007 #

  10. I just had the same problem with T-Mobile this weekend. I probably left the cell phone in the cab around midnight and did not notice that it was missing until the next day. Between the hours of 2 a.m. and 7:30 a.m. calls to Bangladesh, Ivory Coast, and Saudi Arabia were made nonstop totaling $726. Not surpringsly T-Mobile had that activity on its fingertips when I called to report the phone stolen. Despite about 2 hours on the line with customer service so far, they have refused to budge. The reps won’t deviate from their script. Not only that but they don’t seem concerned at all. It’s your problem. I have been a loyal T-Mobile customer for 6 years. I am getting out of this contract as soon as possible.

    However, the real problem is with the federal government. The cell phone companies won’t regulate themselves. Unless our elected officials give us the same consumer protections that we get with credit cards, we are at the mercy of cell phone companies. I am surprised that this problem doesn’t get more press. Not a coincidence I am sure.

    Comment by D.A. — February 27, 2007 #

  11. What I want to know – is who the hell the opportunist thief knows in Pakistan or Haiti (just had my phone stolen and calls made to Haiti) and what the hell are they talking about for 7 hours straight? – I could probably call 5 people worldwide and would have enough to say for about 20 minutes tops. I think these numbers that people dial must be able to reap back the cost of the calls somehow – probably another money making scheme from the cell company.

    Comment by Kate — March 26, 2007 #

  12. Sorry to say, but I am consoled to read about your situation as this has just happened to me – $360.00 in phone calls to Pakistan – please tell me how I am supposed to have any faith in society – by profession I am an Oncology nurse and right now I am having a hard time – it’s hard to care for people when nobody cares about each other.

    Comment by Ursula — July 18, 2007 #

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