Just returned from a trip to San Francisco on USAir. I continue to be shocked by how much this airline has just given up on the concept of service. I wrote a blog recently about one flight in which the attendants seemed to be mimicking Southwest. I thought that perhaps USAir was trying to be friendlier and more customer friendly. Sorry to say, I was mistaken. This was a one-time experience due to the individual attendant, not the airline.
On this most recent trip, my wife and I flew 1st class. We did it because we were celebrating our 40th wedding anniversary and wanted a great experience. What a waste of money!! First, the airplane on the flight out was in very bad need of refurbishing internally--seats were torn, the seat in front of us wouldn't stay up, and there was precious little leg room for a 1st class cabin. The flight attendant worked hard to make our experience as pleasurable as possible. On the way back from San Francisco, we were informed that we had two bags too many (one is allowed to check two bags per person free in 1st class). The price quoted was $200 to pay to check two bags. $200 dollars for bags--after paying more than $1500 per ticket for 1st class. Unbelievable!!
Anyone who understands airline pricing models recognizes that the airlines only make money when they fill seats. When an airplane takes off with an empty seat, it is no different than a super market that has broken eggs or spoiled milk. It is wasted inventory. As a result, the airline is willing to price seats at differentiated prices. So, there is tremendous variance amongst the passengers in terms of what each person paid. Most of the 1st class cabin is comprised of people with upgrade coupons, or they have paid about $100 at the last minute to upgrade because there was an empty 1st class seat. Few, if any in the 1st class cabin have paid full fare, as we did. Few corporations are allowing their executives to fly 1st class anymore, so the full fee passengers are few and far between.
Given this background, it was absolutely shocking that USAir wanted to charge us $200 for two extra bags after we paid full 1st class fare. It was not shocking, given how poorly this airline is run, that they would not bend their bag fee policy for full fare passengers. Our fee more than made up the cost of extra bags--the airline got its money.
In addition, this was a 5+-hour flight and there was no entertainment. We weren't even offered headsets to listen to music. Our kids just flew Air Canada across country--an airline that has gotten a lot of flack of late for poor service--and economy class had individual entertainment systems in the seat backs. Yet, USAir offers no entertainment, even in 1st class. The only other airline like that is Southwest, but that is expected and promised--one doesn't pay for bags and the airline has no first class. They make a promise and stick to it. Is USAir trying to be a no-frills airline and high priced fares? That would be an interesting play. Not wise, but interesting.
USAir is a damaged brand with little redeeming value other than a fairly decent safety record. Its planes are old, its attendants do not seem to care, its fees are high, particularly at airports where it has a commanding market share (e.g., Charlotte, Philadelphia, Pittsburgh).
Recently, USAir wanted to merge with United. Continental moved in a did the merger, knocking USAir out. The fact that United went quickly for a different suitor is good demonstration of the poor brand equity of USAir. Now, the question is who wants to merge with USAir, since the airline needs a partner. One analyst suggested JetBlue. I cannot even imagine that JetBlue would want to be tainted with the USAir brand. The only way they would consider a deal is if--a big if--they wanted the routes USAir has, and if JetBlue wanted to become a major airline.
The only way USAir is surviving is because it provides a needed service that right now cannot be duplicated--flying to cities from certain cities that no other airline serves. As other airlines, like Southwest, move in to challenge USAir, they take market share and further damage USAir. Instead of beefing itself up and improving its brand, USAir acts like a company run by accountants or hedge fund managers--cutting costs and with it further eroding perceived value.
Stick a fork in USAir already. The airline is cooked. Please someone put it out of its misery.
Showing posts with label customer service. Show all posts
Showing posts with label customer service. Show all posts
Thursday, June 17, 2010
Sunday, April 25, 2010
Is US Airways Trying to Ape Southwest Airlines' Style?
I recently flew two US Airways flight segments, two/from Philadelphia to Ft. Lauderdale, Florida. On both of them, the flight attendants and the pilot tried to be humorous, almost in what might be called "Southwest Airlines" style? I wonder if this is a new trend?
As those who fly Southwest know, the pilot and flight attendants often crack jokes and try to maintain a "light air" (no pun intended) on the flights. It is all supposed to make the customers enjoy the flight a bit more. It has been an unusual style, juxtaposed against the normal from the major airlines where flight attendants hardly smile or look as if they are enjoying themselves.
If US Airways is trying to lighten things up, I applaud them. They could be learning that part of the Southwest appeal is fairly free--smile and enjoy oneself and maybe it will start to become a bit more enjoyable for the passenger who is trapped in a small box at 30,000 feet.
I am not sure that my experience is a real sign of change or an anomaly. While it involved two different flight crews, it might not be a pattern. However, I would urge US Airways to try to move this throughout their system. Southwest has taken a low cost strategy into a high priced market. But rather than just maintaining the low cost approach, they added in other changes to really provide points of differentiation against the major carriers. Most of the low cost airlines in the world keep their fees low but charge for bags. Not Southwest. Most low cost airlines feel like they are low cost--the equivalent of a flying Costco (everything almost seems to be on pallets). Southwest has offered a different approach. Cut costs to lower fares, but also offer value--no baggage fees, drinks and snacks (remember snacks on the major airlines? The airlines actually once gave us peanuts and for free!!). But, Southwest really offered differentiation when it made us feel as if they were happy to have us on board and that they were happy to be working for us. This was such a radical change that it actually became a differentiator.
USAirways is stuck. It has a high cost structure that is difficult to change, unless they chose to "blow up" the airline and start over. They have union contracts and hubs and lots of different types of planes--all of the things that Southwest does not have to live with. These things add costs and inefficiencies, while Southwest flies only one type of plane and has much less stringent contracts.
What I am hoping is that the people at US Airways decided that they could be different from the other major airlines and more like Southwest in areas in which they still had control--like smiling and being customer oriented. If that is happening, I am delighted. I live in Philadelphia, and while I can fly Southwest, it is hard to avoid US Airways. If they are changing, I say thank you. If this was an anomaly, I ask them to consider extending these "experiments" to all of their flights. If they were spontaneous expressions by the crews on those flights, then find those people and get them involved in helping others at the airline to change. They have something positive brewing. While they may not beat Southwest, they can carve out clear differentiation from United, Delta, American, and all the other large, impersonal carriers.
As those who fly Southwest know, the pilot and flight attendants often crack jokes and try to maintain a "light air" (no pun intended) on the flights. It is all supposed to make the customers enjoy the flight a bit more. It has been an unusual style, juxtaposed against the normal from the major airlines where flight attendants hardly smile or look as if they are enjoying themselves.
If US Airways is trying to lighten things up, I applaud them. They could be learning that part of the Southwest appeal is fairly free--smile and enjoy oneself and maybe it will start to become a bit more enjoyable for the passenger who is trapped in a small box at 30,000 feet.
I am not sure that my experience is a real sign of change or an anomaly. While it involved two different flight crews, it might not be a pattern. However, I would urge US Airways to try to move this throughout their system. Southwest has taken a low cost strategy into a high priced market. But rather than just maintaining the low cost approach, they added in other changes to really provide points of differentiation against the major carriers. Most of the low cost airlines in the world keep their fees low but charge for bags. Not Southwest. Most low cost airlines feel like they are low cost--the equivalent of a flying Costco (everything almost seems to be on pallets). Southwest has offered a different approach. Cut costs to lower fares, but also offer value--no baggage fees, drinks and snacks (remember snacks on the major airlines? The airlines actually once gave us peanuts and for free!!). But, Southwest really offered differentiation when it made us feel as if they were happy to have us on board and that they were happy to be working for us. This was such a radical change that it actually became a differentiator.
USAirways is stuck. It has a high cost structure that is difficult to change, unless they chose to "blow up" the airline and start over. They have union contracts and hubs and lots of different types of planes--all of the things that Southwest does not have to live with. These things add costs and inefficiencies, while Southwest flies only one type of plane and has much less stringent contracts.
What I am hoping is that the people at US Airways decided that they could be different from the other major airlines and more like Southwest in areas in which they still had control--like smiling and being customer oriented. If that is happening, I am delighted. I live in Philadelphia, and while I can fly Southwest, it is hard to avoid US Airways. If they are changing, I say thank you. If this was an anomaly, I ask them to consider extending these "experiments" to all of their flights. If they were spontaneous expressions by the crews on those flights, then find those people and get them involved in helping others at the airline to change. They have something positive brewing. While they may not beat Southwest, they can carve out clear differentiation from United, Delta, American, and all the other large, impersonal carriers.
Wednesday, March 10, 2010
Customer Service is a Major Driver of Reputation
There has always been a debate about the extent to which reputation really matters to investors. On the one hand, there has been research showing a positive correlation between positive financial results and reputation. On the other hand, some hard-nosed quantitative types argue that investors only care about getting rich and are willing to forgo reputation when they are getting favorable returns.
However, we often fail to step back and consider what reputation does to the sell-side analysts who influence the market value of the stocks we buy. In an October 2009 Journal of Marketing Research article, Eugene Anderseon and Sattar Mansi looked at the impact of customer satisfaction on bond ratings. They found that customer satisfaction by those handling the bond does influence the ratings of the bond.
Customer satisfaction is a major driver of reputation. It is interesting, though, that it often does not show up in the literature as a focus of reputation. Most of the reputation literature and many of the people who profess to be reputation experts, focus instead on good public relations or corporate advertising or corporate social responsibility. They seem to neglect the fact that reputations, like brands, are built, enhanced and destroyed at all of the "touch points" a company meets its various stakeholders.
Step out of the bond market for a moment, since it may be a bit too esoteric for many readers. Consider the reputation of a hotel. Where does a hotel's reputation rest? To a large extent, it rests on customer service. We determine if we are going to like a hotel before we enter the room--how are we greeted, how long are the check-in lines, is our room ready, does the bell-hop let us carry our own bags if we wish to? By the time we get to the room, we are already predisposed to either enjoy or not enjoy our stay. This is customer service. But, where do hotels spend their so-called reputation dollars? On advertising, websites, public relations, and social media. Why is customer service not considered part of reputation management?
It is a waste of time and energy to attempt to "spin" a reputation. There is too much transparency today. Expectations of performance are low. That's the good news. Companies that care can exceed expectations more easily than ever. But, what is happening in many companies is that they look to their competitors and see them cutting costs for customer service and figure that they can also cut costs. Sounds like a bunch of kids saying: "all the kids in school are doing it so I want to do it". Let the rest of the "kids" do what they want to follow one another--be an adult. By doing so, you may actually differentiate and not only increase reputation but also customer attraction and retention, which means greater profits.
However, we often fail to step back and consider what reputation does to the sell-side analysts who influence the market value of the stocks we buy. In an October 2009 Journal of Marketing Research article, Eugene Anderseon and Sattar Mansi looked at the impact of customer satisfaction on bond ratings. They found that customer satisfaction by those handling the bond does influence the ratings of the bond.
Customer satisfaction is a major driver of reputation. It is interesting, though, that it often does not show up in the literature as a focus of reputation. Most of the reputation literature and many of the people who profess to be reputation experts, focus instead on good public relations or corporate advertising or corporate social responsibility. They seem to neglect the fact that reputations, like brands, are built, enhanced and destroyed at all of the "touch points" a company meets its various stakeholders.
Step out of the bond market for a moment, since it may be a bit too esoteric for many readers. Consider the reputation of a hotel. Where does a hotel's reputation rest? To a large extent, it rests on customer service. We determine if we are going to like a hotel before we enter the room--how are we greeted, how long are the check-in lines, is our room ready, does the bell-hop let us carry our own bags if we wish to? By the time we get to the room, we are already predisposed to either enjoy or not enjoy our stay. This is customer service. But, where do hotels spend their so-called reputation dollars? On advertising, websites, public relations, and social media. Why is customer service not considered part of reputation management?
It is a waste of time and energy to attempt to "spin" a reputation. There is too much transparency today. Expectations of performance are low. That's the good news. Companies that care can exceed expectations more easily than ever. But, what is happening in many companies is that they look to their competitors and see them cutting costs for customer service and figure that they can also cut costs. Sounds like a bunch of kids saying: "all the kids in school are doing it so I want to do it". Let the rest of the "kids" do what they want to follow one another--be an adult. By doing so, you may actually differentiate and not only increase reputation but also customer attraction and retention, which means greater profits.
Tuesday, February 16, 2010
Customer Service Becomes the New Brand Differentiator
Brand managers have always sought a point of differentiation for their brands. Typically, these were unique selling propositions or technical points that would convince a customer that the brand was different and worth more than competition. The field has typically followed the traditional marketing and PR formulas for finding differentiation, but what we should be realizing is that customer service is rising as a key point of differentiation and most companies do not do well.
If we look at ways that companies can differentiate, we have basically three choices: product innovation, operational innovation or customer innovation (we actually should think of this as stakeholder innovation since all stakeholders can derive, create or destroy value). The real winners differentiate in all three areas. Southwest Airlines gained customer favor by cutting costs through operational efficiencies while at the same time increasing customer service beyond the level found on most other commercial airlines. WalMart has been an expert in operational innovation, gaining its leverage through supply chain management that shifted the inventory burden from WalMart to its suppliers. This helped them to further cut costs and free up resources for customer service beyond the typical discount operation. Apple has been an expert in product innovation and customer innovation. The list goes on.
Increasingly, companies are finding that it is difficult to sustain differentiation in product and operations. These are fairly easy to mimic. There are many consulting firms that will help a company copy its best competitors. The really difficult task is excelling in customer service. And, increasingly this is separating the good from the also-ran companies.
While companies say they care about customer service, they really don't. Most customer service operations are looked at as being a cost center and a burden. Customer service people are not well paid. Often, customer service is outsourced and forgotten. Too often, companies do not know what it happening in customer service and actually reward people for getting in as many calls as possible--not solving the problem, but rather handling them.
A few companies, like Comcast, Southwest, IBM and others are excelling at customer service through the use of social media. They are listening and responding to problems and actually getting involved in helping people with their concerns.
For marketers who think in transaction terms of price, quality and service, it is time to shirt the emphasis to the latter. Price and quality can quickly come to parity, but customer service, which seems easy, is not and actually creates distinct advantage since it often exceeds expectations, which helps build loyalty.
It's time to take customer service out of the "back office" and make it front of the house.
If we look at ways that companies can differentiate, we have basically three choices: product innovation, operational innovation or customer innovation (we actually should think of this as stakeholder innovation since all stakeholders can derive, create or destroy value). The real winners differentiate in all three areas. Southwest Airlines gained customer favor by cutting costs through operational efficiencies while at the same time increasing customer service beyond the level found on most other commercial airlines. WalMart has been an expert in operational innovation, gaining its leverage through supply chain management that shifted the inventory burden from WalMart to its suppliers. This helped them to further cut costs and free up resources for customer service beyond the typical discount operation. Apple has been an expert in product innovation and customer innovation. The list goes on.
Increasingly, companies are finding that it is difficult to sustain differentiation in product and operations. These are fairly easy to mimic. There are many consulting firms that will help a company copy its best competitors. The really difficult task is excelling in customer service. And, increasingly this is separating the good from the also-ran companies.
While companies say they care about customer service, they really don't. Most customer service operations are looked at as being a cost center and a burden. Customer service people are not well paid. Often, customer service is outsourced and forgotten. Too often, companies do not know what it happening in customer service and actually reward people for getting in as many calls as possible--not solving the problem, but rather handling them.
A few companies, like Comcast, Southwest, IBM and others are excelling at customer service through the use of social media. They are listening and responding to problems and actually getting involved in helping people with their concerns.
For marketers who think in transaction terms of price, quality and service, it is time to shirt the emphasis to the latter. Price and quality can quickly come to parity, but customer service, which seems easy, is not and actually creates distinct advantage since it often exceeds expectations, which helps build loyalty.
It's time to take customer service out of the "back office" and make it front of the house.
Monday, November 30, 2009
An Amazing Story of Employee Disengagement
I heard a story from someone the other day that was so amazing that it had to be repeated in this blog. The woman I was talking to had a friend whose husband travels a lot. He was on a US Airways flight. The flight was delayed and an announcement said that the flight crew was in a major traffic tie-up on the expressway to the airport. This gentleman decided to go on-line using his smart phone and see what information was on the local traffic reports. He found out that there were no traffic delays reported. The airline had announced incorrect information instead of telling customers the real story.
When this fellow arrived at his destination, he called US Airways to complain about what had happened. Now the story gets amazing... The response from customer service? "What do you expect from US Air"? The airline's own customer service was telling the man that he should not expect anything less than poor quality from the airline.
This is a story that anyone who flies, or is unlucky enough to fly US Airways, can understand. This is a miserable excuse for an airline. It has long ago given up any pretense to caring for its passengers. There are other airlines like that as well. I would put United as a close competitor to US Airways in the worst airline competition. It would be a tight race between these two giants.
I remember when USAir started an advertising campaign called "US Air Begins with You". It was an attempt to build customer relationships. It didn't last long. There was nothing behind it. Just fluff. When I heard it, I joked that it must mean that USAir begins with the letter "U", and that it was a play on words. Too bad they didn't use that campaign to transform their company.
What does this story really say about US Airways. Not only has it given up on its customers, but it also has given up with its own employees who are the face of the airline to its customers. One would think that they would want their front-line employees to be armed with rationale for every inconvenience. Yet, most of the airline employees have sided with the passengers. To paraphrase Bill Clinton.. they can feel our pain.
Note to companies. This is a miserable way to make a living. Stop doing what you obviously hate doing. Why be in business if you seem to hate it so much? The airlines have not made money in years. Why are they still putting us through hell? There are airlines that know how to run themselves and build customer loyalty. e.g, Southwest, British Air, Singapore, Porter, JetBlue. I sometimes think that making passengers unhappy is the only thing US Air, United and many of the other US carriers know how to do well.
When this fellow arrived at his destination, he called US Airways to complain about what had happened. Now the story gets amazing... The response from customer service? "What do you expect from US Air"? The airline's own customer service was telling the man that he should not expect anything less than poor quality from the airline.
This is a story that anyone who flies, or is unlucky enough to fly US Airways, can understand. This is a miserable excuse for an airline. It has long ago given up any pretense to caring for its passengers. There are other airlines like that as well. I would put United as a close competitor to US Airways in the worst airline competition. It would be a tight race between these two giants.
I remember when USAir started an advertising campaign called "US Air Begins with You". It was an attempt to build customer relationships. It didn't last long. There was nothing behind it. Just fluff. When I heard it, I joked that it must mean that USAir begins with the letter "U", and that it was a play on words. Too bad they didn't use that campaign to transform their company.
What does this story really say about US Airways. Not only has it given up on its customers, but it also has given up with its own employees who are the face of the airline to its customers. One would think that they would want their front-line employees to be armed with rationale for every inconvenience. Yet, most of the airline employees have sided with the passengers. To paraphrase Bill Clinton.. they can feel our pain.
Note to companies. This is a miserable way to make a living. Stop doing what you obviously hate doing. Why be in business if you seem to hate it so much? The airlines have not made money in years. Why are they still putting us through hell? There are airlines that know how to run themselves and build customer loyalty. e.g, Southwest, British Air, Singapore, Porter, JetBlue. I sometimes think that making passengers unhappy is the only thing US Air, United and many of the other US carriers know how to do well.
Tuesday, November 17, 2009
Totes>Isotoner Sets High Standards for Customer Service
It is not often these days that one is totally shocked by a display of high customer service. I purchased a Totes (they use totes, lower case) umbrella last spring. It is guaranteed for life. At some point recently, one of the spokes of the umbrella broke. I followed the instructions I found on line to not take it back to a store, but rather to send it back to the company with $5.00 for return postage. A new or repaired item would then be sent.
Much to my amazement, I received a letter yesterday from one Helen Baur, Consumer Affairs, totes>isotoner. The letter indicated that "under your circumstances, we would certainly not expect you to pay this fee, having had the umbrella for such a short period of time". My $5.00 was enclosed.
Now, I should note that I did not have a receipt for the original purchase, so Totes was simply assuming from the model of my umbrella that I had purchased it recently.
I teach in a business school and we are always talking about customer service, or lack of it, and the return on investment that it brings or looses. totes>isotoner has gone beyond what I would have expected. I am absolutely impressed with their high consumer standards. They deserve my praise and my customer loyalty. I thought I would pass this on to others in hopes that my story will both inspire other companies to adopt similar standards, and for others in the market for umbrellas, gloves and other items by totes>isotoner, to consider totes>isotoner.
Much to my amazement, I received a letter yesterday from one Helen Baur, Consumer Affairs, totes>isotoner. The letter indicated that "under your circumstances, we would certainly not expect you to pay this fee, having had the umbrella for such a short period of time". My $5.00 was enclosed.
Now, I should note that I did not have a receipt for the original purchase, so Totes was simply assuming from the model of my umbrella that I had purchased it recently.
I teach in a business school and we are always talking about customer service, or lack of it, and the return on investment that it brings or looses. totes>isotoner has gone beyond what I would have expected. I am absolutely impressed with their high consumer standards. They deserve my praise and my customer loyalty. I thought I would pass this on to others in hopes that my story will both inspire other companies to adopt similar standards, and for others in the market for umbrellas, gloves and other items by totes>isotoner, to consider totes>isotoner.
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