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 different set of connections that would bring me home about an hour and a half earlier, with one fewer connection, for roughly the same price. Fairly simple, and obviously not any more expensive for the airline, especially since I can see online that the flights are now priced identically. It was an easy change that would have made a very happy customer. 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.

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:

  • A 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 the account (our infant can still sit on a lap, so they don’t know about her yet), 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 any airline understand that saving me an hour and a half while removing a connecting flight would build strong loyalty that would in the long run be much more valuable to them than $150? I would think so for any customer, but especially for one who’s proven to be a loyal customer and 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 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 defendant” 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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