A recent report reveals that passengers are dissatisfied. Airlines--and all industries--need to take note and plan accordingly.
Posted Aug 6, 2007
Consumers measure their judgment of a "trustworthy enterprise" based on their level of satisfaction, according to Unisys's R2A Scorecard. Among a list of 30 industry groups, airlines were ranked as one of the lowest in terms of being a "trusted industry." Despite the fact that many of the newer airlines are focusing on customer relationship management, passengers continue to perceive airlines as unpredictable and delivering poor service.
In the survey, 1,236 American adults rated customer service as the most important factor in building their trust (77 percent). Ethical behavior (73 percent), quality (71 percent), and thought leadership (69 percent) were the next most-often cited factors. These, however, did not correspond with what airlines considered most important: market share, size, and profitability.
When asked what might erode their trust, consumers named the following factors most often:
"The airlines are somewhat responsible for their own predicament," says Ron Kuhlmann, vice president in the Global Transportation group at Unisys. "They have emphasized the idea that you're going to have a special experience that you won't get on a Greyhound bus and that is ingrained in a lot of people." Kuhlmann explains. "If you set up that expectation and you fail, it's the gap that's the problem...not the absolute performance."
That, Kuhlmann says, is why customer relationship management is key. "If you build the relationship with your customer, they're far more likely to cut you some slack, even if you screw them up badly," he says. Kuhlmann suggests that if an airline is responsible for a bad experience, they should take action immediately: "Present an offer, or send an email or letter, saying, 'We know we screwed up--we hope you won't judge us on this, we appreciate your business.' But unfortunately, that doesn't happen very often."
Customer service exists regardless of whether or not the product--in this case, transportation--is flawless. Kuhlman describes how, even if the plane takes off and arrives on schedule, the experience could easily turn negative if the customer feels the flight attendant had a bad attitude. "We don't rate the product, we rate the circumstances that surround the product," he notes. As a result, Kuhlmann states that one of biggest changes an airline can make is reenergizing its staff. "People who work for airlines are annoyed and burned out. They don't realize they're putting a negative face on something that's probably essentially all right," he says.
- no inside relationship (57 percent);
- no shared values (48 percent);
- no global perspective (47 percent):
- undependable IT (45 percent); and
- outsourcing (45 percent).
It doesn't help that the airline industry has been far from all right of late. The New York Times reported recently that, for the first five months of 2007, "the on-time arrival rate of the big airlines was 73.5 percent, the lowest in seven years." To make matters worse, the paper reported, "[c]omplaints about service were up 49 percent from May 2006."
While the newer airlines (JetBlue, Southwest, Midwest) have been rather successful with their "bare bones" approaches, the legacy carriers (American, United) are trying to compete by withdrawing (or charging for) services that were once provided. (Even among the newer airlines, some policies are exceptional. The New York Times, for example, reported earlier this year that Southwest has a staffer dedicated to customer outreach before those customers have a chance to complain--a staffer with the title "senior manager of proactive customer communications.") "The legacy carriers are trying to remake themselves--change all of their process[es] to equate with the new realities of the world," Kuhlmann says.
Consequently, they have resorted to employee pay cuts and having staffers perform tasks they have never before been required to do. As a result, not only are customers suffering, but airlines are also dealing with dissatisfied workers who are annoyed and working in new environments with higher demands. That leaves airlines in a quandary. So, as The New York Times put it, "rather than rely entirely on weary front-line workers, many airlines are institutionalizing the apology," referring to letters sent out to potentially disgruntled passengers.
Kuhlmann describes how the airline industry has always been the "whipping boy." Unlike complaints made 30 years ago, however--when customers mailed letters to a company--now they're posting their thoughts online. He describes the level of transparency companies have to have now makes them highly vulnerable. "[Consumers] can go on any number of sites--some of which are quite trusted at this point--and post a review about their experience. Another reader will see it and think, 'I'm a million-mile customer with them, if they treat them like that, how are they going to treat me?" With flights, Kuhlmann says, consumers are expecting a much higher degree of satisfaction compared to, for example, a hotel, because unlike a hotel, if you're unhappy, you can't just walk out and look for another one. "You're basically trapped," he said.
Despite the high degree of customer dissatisfaction, people are still continuing to travel. However, Kuhlmann argues that, when competitor prices are relatively comparable, customers are ultimately going to base their decision on which company they trust to deliver the best customer experience. "People hate [the airline industry], people complain about it--but it's all price-related," Kuhlmann says. "If they're going to offer me a trip to Disney World for a third of the price, it's too good to pass up."
But Kuhlmann warns that, at some point, cutting prices and offering special discounts won't be enough compensation for poor service. "Dropping the price eventually does nothing but make you lose money through operations because the additional traffic you're getting doesn't correspond to the price cut," he says. In response to cheaper tickets, Kuhlmann believes that customers should revamp their attitudes as well: "If you're paying next-to-nothing for transportation, you need to lower your expectations."
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