From time to time in this space, we like to talk about issues with companies that tend to make customer service situations worse. Mainly, were looking at you mergers and acquisitions. A lot of times, large firms and investment bankers become obsessed with the idea of merging multiple companies, in an effort to create synergies. On paper, these seem like wonderful ideas. However, in real life, they don't always work, and as a result, customers such as ourselves suffer from a lower level of customer service. A recent report from Bloomberg highlights this situation by claiming the
Sprint - Nextel merger from a few years ago was one of the worst mergers in recent history.
The report claims that since 2005, of the 100 biggest deals, over half of the companies that merged lag behind their peers in terms of stock price. In that group of 100 companies,
Sprint was the third worst as it is worth half of what was pre-merger. What's the main reason for the drop in the stock value you may ask? - Customer service. Since the merger, the two companies have struggled to integrate the users of the two companies networks, and as a result, customers have had enough and have canceled their contracts. In it's most recent quarter,
Sprint added 136,000 customers, but lost 364,000 customers. The customer service department is the main area where the investment bankers claimed there would be synergies created from seamless integration...however the proof is in the pudding. Since the merger, the company has not been able to service it's customers, and as a result, the bottom-line of the company has been taking a huge hit. Sometimes it's easy to get caught up with an idea of paper, but the execution of the idea may be harder than first originally thought. Hopefully this failed merger will act as an example for other future potential mergers to not go down this sometimes rocky road.
For more on the Bloomberg report,
Click Here.
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Posted by GetHuman on Tue, 17 Aug 2010 3:14pm