Pick One: Following Policy or Loving your Client

Southwest Airlines ran a couple of ads during the NFL Divisional Playoffs today that summarized a blog I have been planning to write for the past week.  While the campaign takes a dig at larger airlines who charge “Change Fees” for modifying your flight schedule, I wonder if there’s not a broader lesson that can be learned.
I head to Rome this coming week.  After making my initial reservations with American Airlines, I stumbled across a second set of connections which would bring me home about an hour and a half earlier for roughly the same price.  Needless to say, I attempted to change the tickets, only to find that it was against policy to do so without charging the $150 fee.  I decided to keep my money.
Before I continue, understand the scope of my change request.  I am scheduled to leave Rome on Monday morning, stop in Madrid, on to Dallas, and then finally into Washington Dulles around midnight.  The alternate schedule would have me leave on the exact same flight to Madrid, only to fly to Miami before arriving at Washington Dulles at 10:30. The same destination and arrival airports, the same departure flight, but a tighter set of connections.  Fairly simple, and obviously not any more expensive for the airline, especially since I can see online that the flights are now priced identically.  An easy change that would have made a very happy customer.
It struck me as incredibly bad business, as I spoke to the very friendly, but obviously unempowered operators, that no one, not even the supervisor I asked to be escalated to, could make the change without charging a fee.  Yes, I understood that I purchased a non-refundable ticket, but if anyone with any business sense had pulled up my profile, they would have seen the following:

  • 10 year member of the Aadvantage program with over 500,000 miles flown
  • Platinum or Gold status in 4 of the 10 years, one of which was just last year
  • Significantly increasing international and domestic travel over the course of the past 9 months
  • 7 family members associated with account (my infant can still sit on a lap, so they don’t know about her), and travel with all of them occurs at least once per year
I’d think I’m a fairly decent customer for an airline.  Wouldn’t anyone with half a brain understand that saving me an hour and a half would build strong loyalty that would in the long run be much more valuable than $150?  I would think so for any customer, but especially for one who’s proven to provide a bit of recurring revenue over the years.
Obviously, this was a policy issue.  American Airlines charges a minimum $150 fee to make any changes to a discount economy fare.  I’m guessing that the reason is more complex than simply wanting to make $150.  It probably stems from the nature of “full fare” and “discount” tickets and the need to differentiate their value in some concrete way (full fare tickets are refundable and flexible, while discount tickets allow them to stick it to you whenever they get the chance).  Either way, in my book, this is bad policy.
This whole episode got me thinking.  How many times, in business, do we put policies in place and fail to understand the ramifications?  Do we listen to our front lines, actively seek feedback, and empower our employees to do do what’s right for both the customer and the business, regardless of policy?  Do we have mechanisms for escalation in place and a clear owner that can overrule the policy?  If not, we may look like a well oiled policy focused organization, but we won’t be creating the kind of long term, mutually beneficial customer relationships that build great businesses.
As the “Big Airline CEO defendent” in the Southwest commercial says about the discount airline in the follow up commercial – “they love customers, I love cash”!   That sure is the message I got from American. I hope my company never sounds so foolish.

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