Cellular phone game

Jack Rooney takes management from the suite to the field.

U.S. Cellular's president & CEO inhabits a corner office in the company's 7th-floor suite in an immense office building on the north side of Chicago.

Spare wood furnishings and fresh gray carpeting give John "Jack" Rooney's office the insulated quality of a sportsman's den. Adjacent walls provide a backdrop for two framed pictures labeled "Fighting Irish." Two footballs scrawled with the signatures of team members lie atop a cabinet by the window. An end table in a corner near the window holds a framed photograph of professional golfer Greg Norman standing in the middle of a lush green course.

This setting suits Rooney, who has assumed the role of coach. With his regional management strategy, he said he'll provide the philosophy and give his regional teams the responsibility for the game in their markets. By following this course, he plans to turn customer service into the company's secret weapon against mammoth competitors.

"We're never going to be one of these big gorillas like Verizon or Cingular," Rooney said. "I don't intend to fight them that way. I intend to fight them with a high-service component, top-flight networks, good products and good pricing."

The idea of using customer service as a competitive tool is not new. As competition increases and rates fall, an increasing number of the execs talk about focusing on customer relations. But beyond rhetoric, is it happening in the real world? Rooney says no.

"Customer service in the telecommunications industry, probably in the cellular industry in particular -- it s basically nonexistent," Rooney mused. "I call up call centers. There's one out here for SBC. You call them up, and you get this recording service that says they're busy, please call another time. Then they cut you off. I guess it's up to you to figure out by trial and error, I would imagine, when it would be possible to even wait to get to talk to a live representative."

Then there is the issue of the geographic proximity of CSRs to customers.

"We're moving customer service further and further away from the customer," he said. "If you're a Verizon customer, like I am here in Chicago because we don't have service here, their service reps in Houston don't understand this market, don't understand the geography and are basically unable to do anything except handle billing questions. And even there, they're not quite adept at it."

Rooney draws on his personal experiences with other carriers' reps. In a recent incident, he was traveling down 1-294 from Milwaukee to Chicago and found himself unable to place calls. When he tried, a recorded message told him that all circuits were busy.

"So I hit *611 to get into the customer-service group, and I got this young lady who I later found out was somewhere down (South). She had this little drawl. I knew she wasn't from here," Rooney said.

The CSR told Rooney that tower problems were responsible for his difficulties. But Rooney informed her that if there were tower problems, he wouldn't have been able to reach her.

Puzzled by Rooney's diagnosis, the CSR put him on hold to consult an engineer. She left him on hold for two or three minutes before returning with an answer.

"'I'll tell you, sir,' she said, 'I don't know what your problem is. But they told me to tell you it was a tower problem,"' Rooney related.

A Tough Way to Manage

Rooney said he plans to put his management team close to customers and build a management structure that enables execs to find out what customers want. But how? U.S. Cellular employs about 5,000 people, operates in 138 markets and serves more than 3 million customers.

How does a company with thousands of employees and millions of customers "listen" to its customers?

According to Rooney, listening begins on the front line with CSRs. (See "Front-Line Advances on page 16.) The reps listen to the customers, then their managers listen to them and so on until the messages travel up the corporate ladder.

Rooney visits CSRs, listens in on calls and chats with them. He also encourages the reps to send comments and questions to him via what's been dubbed "Listen Jack" e-mail.

"This isn't the easy way to manage a company," Rooney said. "The easy way to manage a company is to sit there in your authoritarian mode, sucking the ether of corporate headquarters, issuing edicts. The tough way to manage a company is to get out there and be there all the time."

Sometimes Rooney goes to U.S. Cellular's retail stores and talks to customers himself.

What are some of the most interesting comments he's received during these impromptu chats? The question draws a chuckle from Rooney.

"I'm not sure I want to go into all of those at this time," he said. "A lot of things that I've talked to customers about have been the result of a misunderstanding. They just didn't know the product well enough -- and that's our fault. We should be doing more at the point of sale to make sure that they understand exactly what they're buying and how it works."

From a story extracted in his "former life" as president of consumer services for Ameritech, Rooney inferred that even tech-savvy customers may not get the most out of their wireless gadgets. He was attending a meeting with a group of presidents from various wireless companies.

"There was a engineer from one of the manufacturers standing up there, and he asked how many of us used more than three services on our phones," Rooney recalled. "Now these phones, they do everything but diaper your baby's behind. But nobody raised their hand. He asked how many used two or more. They had a few hands go up. Most of us hadn't activated any of the damn services on the phone, partly because we didn't want to bother."

In a worst-case scenario, non-communications, miscommunications or misunderstandings with customers can result in lawsuits and bad publicity. Unfortunately, Rooney had to face the worst-case scenario before he even settled into the job.

On April 11, the day after Rooney took over as U.S. Cellular's president & CEO, Iowa's attorney general filed a lawsuit in the Polk County District Court, alleging that the company had violated state consumer fraud and consumer credit laws. When he filed his complaint, Attorney General Tom Miller said he'd received about 240 consumer complaints about U.S. Cellular since 1993, most filed in the past two years.

Miller said U.S. Cellular advertised special offers such as free minutes, free phones and free statewide calls to entice customers into long-term contracts but failed to deliver what was promised. He also accused the company of refusing to let dissatisfied customers cancel the services without incurring up to $300 in early-cancellation charges, known as break fees. Although break fees are a common industry practice, Iowa law prohibits them on contracts that require more than four payments.

Miller also charged that U.S. Cellular advertised free, unlimited weekend calls, then changed its definition of the weekend to exclude Fridays.

Rooney declined to comment about specifics of the case because the litigation is ongoing. He did, however, comment on his general impression of the case and talked about what he thinks can be learned from the incident.

"In Iowa, they are generally picking on the industry, and they're generally objecting to industry practices," Rooney said, adding that he doesn't think anything U.S. Cellular has done rises to the level of fraud. "There are things that the industry has used as a practice that some people think is misleading. We talk about free minutes. We talk about free phones. But the intent here is not to mislead the customer."

Rooney does admit that U.S. Cellular committed a faux pas.

"The particular thing with the weekends, we did make a mistake there, but we corrected it long before the lawsuit was filed," Rooney said. "We gave everybody a chance to get out of their contract and do it in a different way if they wanted to. Businesses make mistakes. Human beings make mistakes, and sometimes we have to fix them."

But the Iowa Attorney General's office said complaints about U.S. Cellular continue to roll in. The office has received approximately 281 additional complaints since filing the case, according to Bob Brammer, a spokesperson for the office. Brammer said most of the complaints are about break fees.

As the legal wrangling continues, U.S. Cellular is making a public effort to explain its services and charges to customers and potential customers. The company publishes newsletters for each region it operates in. The newsletter for the Midwest, which includes Iowa, recently contained a detailed description of the company's nights and weekends package, which included a definition of the terms and explained applicable charges.

Rooney envisions the newsletters as a way to keep customers informed about U.S. Cellular's products and services.