The airlines collected $1.7 billion in fees for the first half of the year. Now both United and American Airlines charge $200 to change an airline ticket. In some cases that is 50% or more of the price of the ticket.
What are they thinking?
Why not simply say, we don’t change tickets?
Instead all they have done is annoy their current passengers and disuade new passengers from flying with them. Customer service is about service.
Remember: Customers are to be treated like real, indivdual, feeling human beings with friendliness, honesty, and respect. They are entitled to full value for their money, a complete guarantee for satisfaction, fast delivery, and accurate knowledgeable answers on inquiries. Treat them exactly as you want to be treated when you are someone else’s customer.
Unfortunatley, the trend is that almost every large company has come up with ‘new fees’ for consumers. And for the most part the service levels have come down. Why? Wouldn’t you think that more revenue would deliver better service?
Banks now charge for paper statements, pharmacies charge for printed records, and even the ‘free’ advice offered for printers, computers, and smartphones now have a fee. Every company is now charging for services that in the past were free. AT&T charges for information even though they are a communications company. Like most of you I don’t understand why I am paying for and getting less.
Is it time for businesses of all sizes and types to consider some of these income streams to offset the rising costs of doing business? The airlines claim that without the fees they would struggle. So how is that different from all of the other businesses that are struggling? Does charging extra fees keep customers? Airlines started charging for a first checked suitcase in 2008 and it has not stopped. It has not increased customer loyalty. Many passengers now do virtual meetings instead of the ongoing hassles created by TSA and the airlines. Business As Usual (BAU) has become Innovation As Usual (IAU). Innovation is the product of Discomfort. Find out what keeps your customers awake at night, find their pain.
1) Innovation is how we make money from creativity.
As a consultant and speaker my customers’ inquiry often starts with the question is “How much do you charge?” My response has been refined to ask them a question in return…”Is that your only consideration?” “If I offer to speak for $1 does that mean I am hired?” Of course not. We have been programmed to ask about price before we require value. Don’t fall into that trap. Don’t quote a price without explaining the full range of services. Start with 100% of what you offer. Explain your competitive differentiation. Answer these questions: Why should I do business with you? What is the value you bring to me? What’s in it for me (your customer)?
2) People don’t default up.
They want the best and have been programmed to expect the best to cost more. Better costs more. Uncommon Wins. Yet the rate of delayed or mishandled bags grew to three bags for every 1,000 passengers in February from a rate of 2.64 bags in the same month last year, according to the federal agency. Complaints against the airline industry jumped to 899 in February, a 30% increase over the 693 complaints in the same month in 2012, according to federal statistics. Bottom line: Fees went up. Delays went up. Lost bags went up. Complaints went up. Service went down.
3) Customers still want value. They want to know that what you provide to their audience is relevant, timely, usable, etc. I can’t charge by the number of people in the audience, or the time of day, or the day of the week, or can I? Or should I? Of course not. No one would stand for it, yet we all accept the way large companies force fees upon fees. You want to pay for an invoice on the phone instead of using the Internet there is a fee. Often we see that ‘cash’ prices have a discount so that the retailer does not absorb the credit card fees. Is it time to rethink your fee structure? So why do we all default to the fees? Because our world has shifted.
4) Everything has it’s price, but what is the value?
The following are currently the most widely used optional airline services according to the Airline Tariff Publishing Company:
Baggage • Seat assignments • Unaccompanied minors • Pets • Travel Insurance • Lounge passes • Upgrades • Meals and beverages • Ground transportation • Inflight entertainment/WIFI
Rather than introducing lots of new services, airlines are busy figuring out new ways of selling them to take the most money out of your pocket that they can. Is that a good plan? Can this pricing model sustain itself? The sad answer is yes. If you want to fly you have to pay. Is there any choice? If you want a printed board ticket, either print it at your home or office, or expect to pay for it. You want to watch a movie or use WIFI there is a cost.
It’s time for each and every business to rethink how they do business. What are you worth? Are you selling or telling your customers what you offer? Do you provide enough value so that price is not an issue or are you like the airlines trying to squeeze out everyday no matter what the negative reaction is to your pricing model?
In learning from the airlines I am suggesting that you learn what not to do to your customers. Instead bundle your products and services. What would happen if one airline went back to the time when a blanket was free? Printed tickets were free. And show your customers that you are still their best choice because you offer price/value not price/annoyance.
Southwest Airlines continually resists following the big carriers into the ‘fee game.”
However, to be competitive they altered the service that they provide. Airlines such as Air Canada and Delta already are offering passengers trade-offs such as reduced fares, if the passenger opts out of accruing frequent flyer miles or getting seat assignments.
Give them more than they expect and you will create customer insistence instead of resistance. Let’s create services that will be appealing to a large number of our customers so that they will want to buy without thinking about our competition.
5) Great customer service is all about bring the customer back.
As long as the airlines continue to escalate their ‘fees’ passengers will find more ways to stay home, fly less, etc. Don’t let the add-on fees create a barrier between you and your customers. Here’s what I learned from the airlines. Airlines are assigning you a “value score” based on your frequent flyer status and other variables so their pricing for various services, including those bundled options, could vary by customer.
The airlines use the fees to offer perks to their frequent flyers. Now they offer value for loyalty…and that’s the important lesson. Today loyalty continues to erode in every business relationship. Customers are looking for the best deal not the best service, or product. Yet there are companies that don’t follow that trend. Buy an Apple product and you get the Genius Bar to help you. Shop at Nordstrom and they will accept the product return without question. Today customer value the product of the product.
It’s what the product does to make life easier, more productive, healthier, peaceful, etc. No one cares how a smartphone is made. They care about what it can do for them. At what cost?
6) Customer service is not a department…it’s an attitude.
Some airlines don’t turn on the heat during cold weather to save money and then charge to rent a blanket. Forcing the consumer to spend money for items such as carry-ons, receipts, copies of cancelled checks, and other perceived ‘requirements’ that make doing business with you difficult will result in consumers seeking other alternatives. You want to be the first choice, not the last.
From AT&T to Comcast, gas stations to onsite service calls, CITICORP to Bank Of America, costs have gone up and the service has gone down. Is anyone happy with their cable television provider, cell service, long distance, dealership auto repairs, out of warranty appliance service, or their ‘service’ providers? Customer satisfaction is at an all time low. Call centers in Asia, supervisors that are never available, even the US Post Office forgot the James Farley Post Office inscription: Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. Really? I have found nothing about the USPS to be close to this commitment. Send a package and find out it wasn’t delivered. Now try to process a claim. They have so many hurdles to overcome you simply stop using them for anything but snail mail.
Airline complaints: http://www.airlinecomplaints.org/
Bank or Financial Institution: http://www.federalreserveconsumerhelp.gov/
Wired and wireless Telephone, cable television: http://www.fcc.gov/complaints
And if you need some help making a more informed decision of what airline to fly, or to avoid try this reference chart. It’s just a little extra something from me to you because I am never closed to my clients.
Send me a postage stamp and return address label in an envelope marked
D-A-T-I-N-G Your Customer c/o James Feldman 505 N. Lake Shore Drive • Suite 6601 Chicago, IL 60611
and I will send you this 5 1/2″ x 8 1/2″ laminted two sided card at no additional charge. It’s a great reminder to help create Customer Insistence.
Rules For Success
Things to do to keep your clients coming back for more
Customizing Your Customer