Feb 092010

Averse, tolerant, seeking
Economists talk a lot about risk behaviour– to what extent indivisuals seek, tolerate, or avoid risk, and this goes a long way in explaining why people choose to do things.

An excellent post by Valeria Maltoni discusses the importance of realising when you’ve lost sight of your customers’ interests and feelings. This reminded me of an ongoing struggle I’ve had with United Airlines, and how they’ve shifted significantly over the last ten years– to their employees as well as to their end users.

The United Experience – 1990s
To be fair, it’s hard running an airline. I wouldn’t do it, but someone does. I flew United a lot in the 1990s, and the experience was as I recall a pretty good experience out of a series of terrible alternatives– the difference seemed to be in the individual pride and power of United employees– they answered the phone as “employee-owners” and would often go the extra mile for you, particularly if something had gone wrong that was clearly their fault.

United in the 2000s
The Noughties brought some slippage– and, to be fair, we had an enormous overall price hike in oil, the troubled aftermath of 9/11, and the bursting of the dot-com bubble. Depending on when and what desk you called, you were likely to be handed over to an outsourced call centre which would have mixed rates of effectiveness. I had a couple of really miserable experiences when I missed flights, but– and here’s the interesting bit– the employees at the gate still had the visibility and ability to make the right changes and sort things out. If you got a bad agent on the phone, you could turn up at the airport 30 minutes or so early and get things sorted.

That, unfortunately, is no longer the case.

United at the start of 2010
I recently flew United from London to Sydney via LAX, four flights in all. I booked upgrades on three of them, and was re-downgraded on two of those. Two of the four flights had bad entertainment systems, and the flights had different baggage allowances (I had 2 bags from Sydney to LAX, but then had to pay USD$50 for my second bag from LAX to London).

Now, there was a terrorist attack. I am 6’3″, so flying in regular coach is a bit of a nightmare, but it’s not the end of the world. I spoke to everyone I could– the boarding agent, the gate agent, the ticket desk, the reservations desk, and the phone-in reservation system, spending, all in all, several hours trying to figure out how to simply get the upgrade difference refunded.

Several of the older United employees were very nice and understanding, but they had neither the time nor the ability to effect the refund. The general feeling was rushed and overworked, and in every United queue I’ve been in there’s been low staffing levels, so everyone is a bit overwhelmed. The only interface to refund this money is a web portal, which promises a 7-10 day working time (at this point, it’s been six weeks for two different requests with no return contact. I’ve contacted my credit card company to request a refund from them).

The dangerous side of customer aversion
1) You alienate your customers — you make it less likely to keep customers coming back. I have a lot of miles on United and generally would book through them on US-based flights. Keeping customers should be easy, unless you kick them out.

2) You undervalue (and devalue) your employees — I’m sure that each anti-customer decision made economic sense when doing it– outsourcing, driving customers to the web, etc.– but the employees– especially the ones who are on the front lines– are the ones who your customers think of you as. When they don’t have the tools to do the right thing, are disempowered, and are the ones that the angry customer will shout at (something I try really hard to do, as I know what it’s like to be an exposed cog).

3) You stop being able to hear your customers — The biggest danger of becoming customer tolerant (rather than customer seeking), is that you cannot engage your customers in a conversation and you stop knowing what’s going on. Once you route calls through an external call centre, you have to spend more time, money, and energy to understand your customers, and you lose some organisational memory and networks which inform you about how your customers feel towards you. You’re probably going to forget to do it (as outsourcing is often cost-driven rather than customer-focus-driven).

If you’re an airline, you’re likely one of the few games in town, and you’ll still get customers. It’s funny, however, how Southwest, JetBlue, and Virgin America can come up from nowhere and gain so many customers so quickly– mostly by listening to customers and treating their employees well.

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