Tuesday, July 10, 2007

Sprint Fires Crabby Customers

The blogosphere and the news media (especially the grump at ZDnet) are up in arms over Sprint's decision to fire cranky clients. Seth has a post about it. Apparently, many of the 1000 fired called 25 times a month. You can't please those customers... ever! And at $30 per call -- they were costing Sprint $750 per month each - or $750,000 per month combined. Sometimes it's better to get rid of the unprofitable customers.

In the book, The 4 Hour Work Week, Tim Ferris talks about Parkinson's law and how applying the Pareto Principle to your business can increase revenue. (Get mp3 here). Pareto says that 80% of your complaints and your revenue will come from 20% of your customers - but not the same 20%. Identify your best clients - and duplicate them, find more of them. That's the way to success.

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