Global Crossing – Keeping Customers While Fighting to Keep the Company Alive

By Lain Chroust Ehmann

It’s January 2002. The country is deep in recession and experiencing the worst telecom downturn in recent memory. In this environment, Global Crossing, a worldwide telecommunications solution provider, files for Chapter 11.

In such a situation, companies usually go to one of two extremes. Some pull up the drawbridge and bar the doors, lick their wounds and try to stop the blood flow. At the other end, the temptation is to deny what’s happening and proceed as usual, hoping the problem simply will go away.

Neither of these options was suitable for Global Crossing. “The whole turnaround story started with the acknowledgment and belief that we had to do something fundamentally different than we had been doing,” says Dave Carey, executive vice president of enterprise client relationships for Global Crossing.

The new goal was simple: Sacrifice acquisition of new accounts in favor of retaining Global Crossing’s 75,000 existing customers. “Our mission for the next 12 months was to keep every customer we had. From a financial viewpoint they represented the lifeblood of the company in terms of cash flow,” explains Carey. As its main customer interface, the company’s sales team was critical to the strategy.

When it came time to cut field sales positions, executives sorted customers by size and potential for growth, and then matched salespeople against the accounts, name by name. Those who’d been servicing key accounts were kept. “The last thing we wanted to do was to change names and faces or, worse yet, leave the customer not knowing who they should contact,” says Carey. Overall, Global Crossing’s enterprise sales team went from 1,800 to 390.

Another element of the retention plan was communication. Understandably, many customers were a bit nervous, not knowing what the company’s troubles meant for them. To keep them onboard, Global Crossing executives kept communication open and constant, immediately sharing information across the company. Salespeople were briefed continuously and instructed to share information with their accounts. “We were very open and honest and timely, and we didn’t sugarcoat anything,” recalls Carey. “We communicated until it hurt. It was the frequency and the completeness that really allowed the people facing the customer to tell the story.”

The strategy worked. Not only did Global Crossing keep its attrition rate under the operating plan’s 3%, but revenue went from $3 billion in 2001 – pre-Chapter 11 – to $2.9 billion in 2002. Meanwhile the company reduced its run rate from $1.45 billion to approximately $675 million in the same period. “We cut the expenses by much better than 50% and we kept the revenue whole,” says Carey.

Carey credits the company’s success to several key elements: the focus on retention, constant communication and the sales team’s ability to preserve relationships. “Customers only buy where they feel they’ve been treated well,” he summarizes.

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