Airlines that subject travelers to cramped seating, hidden fees, overbooked flights, unfriendly staff, excessive 800-line hold times, and excruciatingly restrictive mileage award redemption policies are on a dangerous path, new research suggests. This is why airlines should care about customer experience.
In spite of high-profile evidence to the contrary, airlines actually “get quite a lift from a great customer experience,” said Jon Picoult, founder and principal of Watermark Consulting, a Simsbury, Conn.-based customer experience consultancy.
“The US airline industry certainly isn’t renowned for the quality of its customer experience. Fees are going up. Leg room is going down. And – if you’re lucky – you won’t get dragged off the plane due to overbooking of seats,” he wrote.
However, there really is a Customer Experience ROI, he said. The findings “should be of keen interest to airline executives, as well as any business leader who questions the value of customer-centricity,” the report states.
Why Airlines Should Care About Customer Experience
Picoult said airlines that deliver excellent customer experience win long-term rewards from both customers and investors.
He based his conclusion on an analysis of stock market returns for airlines that have a customer-centric approach versus those that lag. Picoult analyzed model portfolios of the Top 3 (“Leaders”) and Bottom 3 (“Laggards”) publicly traded airlines in J.D. Power and Associates’ annual North America Airline Satisfaction Studies.
- Airline Customer Experience Leaders outperformed the industry, generating a total return that was 70 points higher than the Dow Jones US Airlines Market Index
- The industry’s Customer Experience Laggards trailed far behind, posting a total return that was 79 points lower than that of the broader US Airline sector
- Over the six-year period, the Airline Customer Experience Leaders generated a total return more than double that of the Laggards
“A great customer experience can deliver tremendous strategic and economic value to a business, in a way that’s difficult for competitors to replicate,” he noted.
The bottom line: customer experience matters. And the sooner airlines — and every other business recognize this and act accordingly — the more valuable their brand will become, he suggested.
JetBlue, Southwest, Alaska Airlines
For all six of the years covered by the analysis, the same three airlines dominated the J.D. Power rankings: JetBlue, Southwest, and Alaska Airlines. The report said they all:
- Recognize the importance of creating a workplace culture that fosters customer experience excellence
- Give their workforce the necessary training and decision latitude to serve customers with distinction
- Advocate for their customers.
All three airlines deliver a “deliberately designed and consistently delivered customer experience” notable for its humanity and hospitality, the report says. This builds shareholder value, by growing revenues and controlling expenses.
What Your Business Can Learn
- Maximizing the return on customer experience investments requires shaping interactions that cultivate loyalty, not just satisfaction.
- To achieve customer experience excellence, execute on the basics exceptionally well. Then follow that with a focus on “nice to have” elements and other pleasant surprises.
- Choreograph experiences so they not only address customers’ rational expectations but also stir their emotions in a positive way.
- Understand how the human mind interprets experiences and forms memories. Use that knowledge to create more positive and loyalty-enhancing customer impressions.
- Happy, engaged employees help create happy, loyal customers (who, in turn, create additional happy, engaged employees!) — a virtuous cycle ARKE defines as brand experience.
Embracing Brand Experience
Brand experience encompasses every touch point a company has with its customers, as well as its employees, partners, distributors, vendors, and all other stakeholders.
Supported by the customer journey, physical and digital channels, and strategically important technology, it prioritizes the user experience.
By replacing the word “customer” with “brand,” we can expand the considerations as you design buyer, client, and employee journeys.
Brand experience encourages a big-picture lens to evaluate experience in all of its contexts. It also assesses the impact of experience on everyone affiliated with your brand, from customers and employees to suppliers and vendors.
Brand experience tracks and maps both online and offline interactions. It considers a person’s interactions with your brand as well your competitors. And it focuses on a bigger vision of the overall impact your brand has on the people associated with it.
In addition, brand experience extends beyond the awareness and acquisition journey. It also encompasses the sales journey, the product/service usage journey (support), and, lastly, the loyalty/advocacy journey.
Want to learn more about the ARKE vision of brand experience? Contact Chris.Spears@arke.com for more information.