The major U.S. carriers rethinking their approach to overbooked flights, renewing their focus on training for customer-facing employees, and improving transparency regarding passengers’ rights. United Airlines, in particular, is updating its policies about when a seated passenger can be removed (good call, folks), implementing a new check-in process for overbooked flights, paying passengers up to $10,000 to volunteer for a later flight, and reimbursing customers $1,500 for lost luggage.
While those are all wise steps to take, I’m afraid it’s too little, too late.
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Companies can’t simply flip a switch on the service front and expect customer loyalty to follow.And those have been established with consumers already.
Look at Comcast: As part of a broad customer service overhaul, the ISP is investing $300 million in thousands of new customer service employees, remodeled stores, better tracking and other initiatives. But culturally, do they have what it takes to win people’s trust? Probably not. They’re shady about net neutrality, for one thing. And even though complaints against Comcast are declining, people still hate them more than they hate the IRS.
I’ve had a number of great Delta experiences, but it’ll never be my favorite airline. Southwest, on the other hand, can make the occasional mistake and I’ll forgive and forget. It goes deeper than customer service — I trust Southwest is doing the right thing because I believe we share similar values.
Customer experience has been baked into Southwest’s business model from the start, alongside other unorthodox business decisions — purchasing and flying only one type of single-class aircraft, offering point-to-point service as opposed to a hub-and-spoke system, not assigning seats. Southwest arrives on time more often, loses less baggage, boards planes faster, doesn’t charge customers for changes, and encourages its employees to have fun.
This unconventional, multi-pronged approach makes for better customer service, and oddly enough, better profit margins. Despite having entered the market long after most of their competitors, Southwest claims nearly 20 percent of the market share, making them the leader. They’ve been profitable every year since 1973, and never had layoffs or pay cuts.
Yet amazingly, you won’t see other airlines following Southwest’s lead.
For one, they don’t have to. Wherever choice is scarce (see also: cable companies and utilities), customer service is garbage. Thanks to mergers and lax industry regulations, the major U.S. air carriers have regional monopolies in large airports — so they can treat us like dirt and still get our business. Delta is the only airline that flies from Boston to Cincinnati, so I have no choice but to fly with them to see my family. For casual travelers, flying is a commodity. We generally go with the cheapest airline, not the one with the best service. Airlines have hacked human psychology in a way that we all hate, but deliver the economics we want to see.
Secondly, even if other airlines wanted to emulate Southwest, they can’t. People tend to oversimplify the solution whenever we have a terrible experience with an airline: Why can’t they just provide better service? Southwest does, and look how well they’re doing!
But it’s not as simple as changing how you treat customers, because customer service in and of itself doesn’t translate to a competitive advantage.
Southwest’s great customer service is essentially a byproduct of their business model and corporate culture, which is difficult to copy when you’re risk-averse and beholden to Wall Street.
Like Comcast, the big legacy air carriers won’t suddenly become everyone’s darlings by learning to offer customers the bare minimum of respect they’ve come to expect from other companies across different industries. Can you imagine unraveling all that legacy? To compete with Southwest, they’d need to play a much longer game — essentially burning everything down and starting over.
That takes guts, but it’s possible. When the leadership at the online accounting service FreshBooks acknowledged that their clunky, decade-old product was at risk of a competitor coming along and delivering a superior user experience, they created that competitor themselves, from within their company. The reinvention worked, and FreshBooks expects more than $50 million in revenue this year.
FreshBooks is one thing, but could a major airline, with tens of billions in market cap, do something similar — create a competitive airline from the ground up, designed to kill the legacy airline? Absolutely. When you start over, you have the luxury of all the past learnings and technologies of today, but with none of the overhead, giving you the opportunity to design something special. Take 100 of your best people, some funding and a healthy disrespect for Wall Street’s short-term focus, then begin anew with a different brand.
It’s at least a 20-year investment, but it’s the only path to competing with Southwest, and — if you do it right — winning consumers’ trust.