What to do with BA miles as I wont fly with them again!
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I'll bite too :
There aren't that many of those rare and precious beasts around now. If you know that your next customer is a high yield one, then yes, but that is not guaranteed.
As for devaluing his ticket, there I agree with you. It's an unfortunate consequence which can arise.
Then serve your next customer, a full fare traveller, who's now happy because you didn't just devalue his ticket.
As for devaluing his ticket, there I agree with you. It's an unfortunate consequence which can arise.
Last edited by Capetonian; 4th Aug 2009 at 16:00. Reason: grammar
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Crepello,
Discretion is the key to the tension that exists between financial discipline and customer satisfaction. This is seldom succesfully exercised in a process driven environment where it is not possible to legislate for every eventuality and where the default stance is no change.
The advantage of a 'loyalty' programme is that it is meant to develop a bond between service provider and service user. "If you give me repeat business, then you can expect a 'reward'." Such rewards may be free flights or service enhancements - lounge access etc.
Those whingers, myself included, have come to expect levels of customer satisfaction which were never contemplated in the T&C of the contract between airline and passnger - indeed, T&C which I have only ever had cause to seriously examine once in 20 years. As a Gold member I appreciated these ehnacements and saw at first hand that they staff were willing to help out when things didn't go quite to plan. Unfortunately, the process doesn't now appear to permit initiative and effort in the name of customer service.
If I or any of my staff are faced with customer who wants to change something that isn't contemplated in our 'contract' then I expect the following analysis ' Is this practical?' 'what is the cost - to us?' If the cost is low then, is there any value to me in bearing that cost? ( i.e. what amount of goodwill do I need / am I willing to extend to this particular customer). If there is no goodwill relationship - then 'what value can I extract by making a charge? ( can I make a profit on this transaction?)
I suspect the beancounters at BA have identified 'foregone' revenue from BA exec club members who were getting 'soft' changes etc to tickets etc. free. However, by applying more rigid rules they may have captured some of that 'lost' revenue only at the expense of the long term relationship with the customer. Only time will tell if this is good business or bad.
Discretion is the key to the tension that exists between financial discipline and customer satisfaction. This is seldom succesfully exercised in a process driven environment where it is not possible to legislate for every eventuality and where the default stance is no change.
The advantage of a 'loyalty' programme is that it is meant to develop a bond between service provider and service user. "If you give me repeat business, then you can expect a 'reward'." Such rewards may be free flights or service enhancements - lounge access etc.
Those whingers, myself included, have come to expect levels of customer satisfaction which were never contemplated in the T&C of the contract between airline and passnger - indeed, T&C which I have only ever had cause to seriously examine once in 20 years. As a Gold member I appreciated these ehnacements and saw at first hand that they staff were willing to help out when things didn't go quite to plan. Unfortunately, the process doesn't now appear to permit initiative and effort in the name of customer service.
If I or any of my staff are faced with customer who wants to change something that isn't contemplated in our 'contract' then I expect the following analysis ' Is this practical?' 'what is the cost - to us?' If the cost is low then, is there any value to me in bearing that cost? ( i.e. what amount of goodwill do I need / am I willing to extend to this particular customer). If there is no goodwill relationship - then 'what value can I extract by making a charge? ( can I make a profit on this transaction?)
I suspect the beancounters at BA have identified 'foregone' revenue from BA exec club members who were getting 'soft' changes etc to tickets etc. free. However, by applying more rigid rules they may have captured some of that 'lost' revenue only at the expense of the long term relationship with the customer. Only time will tell if this is good business or bad.
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Capetonian,
I think you have raised a good point regarding the class of ticket being purchased. What is the motivation of the passenger travelling with a full service airline?
Is it to get the most amount of service for the least amount of money? - the freloader argument - I'll buy a cheap ticket and if I need a change I'll busk it with my club card and , if that fails, pay the extra. or,
I want that route, that timetable but the full ticket price - exceeds its true value. Why should I pay that? - the frugal flyer
Whichever the circumstance - the Frequent flyer programmes can assist airlines in deciding how to treat their customer base - if the process allows. If it's the busker, then a one off - OKay sir /madam but....next time we'll need to make a full charge unless you have paid for a flexible ticket.
For the frugal flyer, assuming that he has earned some tier points in the past, is this not a great opportunity to demonstrate the benefits of paying a little bit extra in the future?
The result of saying sorry sir/madam, to either of the above is likley to be the same - a perception of poor customer service and no little desire to repeat the experience. In both of the above cases the airline has right on its side but will be the eventual user.
Crepello perhaps suggests that in some way, by saying no to a customer, you will develop and command respect - I'm sorry, but on that count you are most probably wrong!
I think you have raised a good point regarding the class of ticket being purchased. What is the motivation of the passenger travelling with a full service airline?
Is it to get the most amount of service for the least amount of money? - the freloader argument - I'll buy a cheap ticket and if I need a change I'll busk it with my club card and , if that fails, pay the extra. or,
I want that route, that timetable but the full ticket price - exceeds its true value. Why should I pay that? - the frugal flyer
Whichever the circumstance - the Frequent flyer programmes can assist airlines in deciding how to treat their customer base - if the process allows. If it's the busker, then a one off - OKay sir /madam but....next time we'll need to make a full charge unless you have paid for a flexible ticket.
For the frugal flyer, assuming that he has earned some tier points in the past, is this not a great opportunity to demonstrate the benefits of paying a little bit extra in the future?
The result of saying sorry sir/madam, to either of the above is likley to be the same - a perception of poor customer service and no little desire to repeat the experience. In both of the above cases the airline has right on its side but will be the eventual user.
Crepello perhaps suggests that in some way, by saying no to a customer, you will develop and command respect - I'm sorry, but on that count you are most probably wrong!
Shining Example, apparently...
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in a process driven environment where it is not possible to legislate for every eventuality and where the default stance is no change.
Your service provision logic looks sound, though probably requires more resources than most airlines could afford these days.
I suspect the beancounters at BA have identified 'foregone' revenue from BA exec club members who were getting 'soft' changes etc to tickets etc. free. However, by applying more rigid rules they may have captured some of that 'lost' revenue only at the expense of the long term relationship with the customer. Only time will tell if this is good business or bad.
- Whiners would only demand further exceptions later, and would eventually start bawling when the freebies dried up.
- Whiners will be similarly treated by the competition, sooner or later, so may well come back.
- Leisure whiners will generally revert to the cheapest carrier for a given fare type. Corporate whiners will generally be obliged to follow their employer airline policies, or... take the cheapest carrier. Either way, cost wins out over quality for the longer term competitive edge. (And I don't like this either, but such is the market.)
- Tightening up on 'soft' changes should generate additional revenues from flexible ticket sales - once the word gets out...
Crepello perhaps suggests that in some way, by saying no to a customer, you will develop and command respect.
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Thing is that the changes required at BA are so radical that our postulation is likley to be entirely hypothetical.
If you are correct about cost wins all then BA have been operating the wrong business model for the past 20 years - and still talk about Premium and quality. If cost is the only driver for the consumer then BA need even more radical re-organistion as their margin will continually be eroded by those with a much lower overheads.
It's easy to postulate that cost is everything when discretionary expenditire is under pressure but I belive there are other factors which are of importance to customers. Relative Cost, Quality of service experience, environmental and ethical considerations are all pertinent to aviation and, I would suggest that cost considerations alone will not endure beyond this current recession.
If BA adopt the low cost, no frills model then they will be leaving a market which they have dominated for years for one in which they have never been successful because of their structure and corporate mentality. However, if they adopt a predatory strategy , slash unprofitable routes and target profitable routes with additional capacity leading to a price war between operators - it might work. BA will hog slots to assist this strategy and allow future diversification - can't see competition commission wanting to get emboiled with this given the mess they made with BAA!
Interesting times but,despite the potential value in their brand, I still think that BA are on the way out.
If you are correct about cost wins all then BA have been operating the wrong business model for the past 20 years - and still talk about Premium and quality. If cost is the only driver for the consumer then BA need even more radical re-organistion as their margin will continually be eroded by those with a much lower overheads.
It's easy to postulate that cost is everything when discretionary expenditire is under pressure but I belive there are other factors which are of importance to customers. Relative Cost, Quality of service experience, environmental and ethical considerations are all pertinent to aviation and, I would suggest that cost considerations alone will not endure beyond this current recession.
If BA adopt the low cost, no frills model then they will be leaving a market which they have dominated for years for one in which they have never been successful because of their structure and corporate mentality. However, if they adopt a predatory strategy , slash unprofitable routes and target profitable routes with additional capacity leading to a price war between operators - it might work. BA will hog slots to assist this strategy and allow future diversification - can't see competition commission wanting to get emboiled with this given the mess they made with BAA!
Interesting times but,despite the potential value in their brand, I still think that BA are on the way out.
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Interesting times but,despite the potential value in their brand, I still think that BA are on the way out.
The hard-nosed attitude with non-refuindable, non-changeable tickets is doing us no favours except getting short-term cash in the till. Continental, on the other hand, sells non-refundable, non-changeable tickets, but will issue the ticket value as a "Travel Credit" against a future booking if the customer has "hard-luck" circumstances.
As staff, we now have zero discretion allowed to us. We have to apply whatever rules there are without regard to the circumstances, except in a very few limited cases (such as bereavement where even that must be "evidenced" by producing a Death Certificate.)
Sorry to hear of the difficulties you're experiencing. As the catering gets pulled from our short hauls (under 1 hour), other catering gets "re-aligned" and our baggage allowances reduce, I and my colleagues fully expect to see many more of our loyal customers walking away! (As well as loyal staff leaving when the Terms and Conditions are tampered with and the job market picks up outside!)
Sad, isn't it, to see such a proud Empire brought down by those who know the cost of everything but the value of nothing! I honestly believed an Irishman would do better!
If you are correct about cost wins all
As British Airways service was superior to EasyJet or Ryanair, people were prepared to pay a bit extra, but as the gap closes between the service standards (Easy and Ryanair's lack of check in desks notwithstanding) customers are finding it difficult to justify the extra costs.
I wish I could see a way out of the downward spiral.
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As a regular lurker here I find myself in the rare position of being able to post from a professional perspective. I am a UK director of a large, successful subsidiary of a US fortune 500 company. We charge a little above the average for what we supply but we attempt to do so at a higher than average level of service. For our customers I hope that the latter more than offsets the former. In our case the extra service is paid for from our slightly higher margins.
I am clear with my staff that we must earn the loyalty of our customers. That does mean showing empathy and compassion and stepping outside of the rules or procedures once in a while. I know the maths; the cost of losing a profitable customer over his or her lifetime versus the cost of bending a rule: even at a short term cost. I also know the cost of alienating high value customers through short-sighted decisions. I trust my staff to differentiate between the ‘genuine’ (in my experience most customers) and the piss-takers (few, who tend to make themselves obvious). How you make people feel is important.
In the case of profot, in my business I would be despairing that my staff failed to take care of a loyal customer of huge value. Had it reached me I would have bent over backwards to put the situation right. (Juud, your post was depressingly insightful)
Bean-counters take a bit longer to understand this (in my experience). There are plenty of academic papers and case studies out there that seek to demonstrate the bottom-line value that accrues from customer loyalty. For some very transactional and ‘lowest cost’ brands I accept that this doesn’t apply: it just isn’t the business model. However, If I was WW at BA I’d be watching very closely the retention rate and value development in my most profitable customer segments.
I am clear with my staff that we must earn the loyalty of our customers. That does mean showing empathy and compassion and stepping outside of the rules or procedures once in a while. I know the maths; the cost of losing a profitable customer over his or her lifetime versus the cost of bending a rule: even at a short term cost. I also know the cost of alienating high value customers through short-sighted decisions. I trust my staff to differentiate between the ‘genuine’ (in my experience most customers) and the piss-takers (few, who tend to make themselves obvious). How you make people feel is important.
In the case of profot, in my business I would be despairing that my staff failed to take care of a loyal customer of huge value. Had it reached me I would have bent over backwards to put the situation right. (Juud, your post was depressingly insightful)
Bean-counters take a bit longer to understand this (in my experience). There are plenty of academic papers and case studies out there that seek to demonstrate the bottom-line value that accrues from customer loyalty. For some very transactional and ‘lowest cost’ brands I accept that this doesn’t apply: it just isn’t the business model. However, If I was WW at BA I’d be watching very closely the retention rate and value development in my most profitable customer segments.
Bean-counters take a bit longer to understand this (in my experience).
There is an interesting book that I've read recently by an American car dealer (Sewell I think he is called but I could be wrong). His view is that it is better to be ripped off occasionally by a chancer than to piss off a loyal customer. And I agree with this entirely! It costs a hell of a lot of money to get a loyal customer so you don't want to lose them to a competitor without very good reason.
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It costs a hell of a lot of money to get a loyal customer so you don't want to lose them to a competitor without very good reason.
After the customer had gone, Tom turned to the manager and said "What was all that about?"
"Och! I told him yesterday he needed a complete new exhaust but he insisted on just having the back box changed. Today, his front pipe has gone and he's telling me it's my fault! No way am I giving him a front pipe for nothing!"
Tom looked at him and asked "How old is he?"
"I dunno - 21 or 22! Why?"
"What does he do?"
"Medical Student, I think. Why?"
"How much do you think he will spend on tyres and exhausts during his lifetime?"
"I'm flipped if I know or even care! Look what is this all leading up to?"
Tommy grabbed a calculator from the counter top, tapped in a few figures and said "At today's prices, he will spend about £30,000 - do you think he'll spend that with you?"
"No, but there's plenty more customers out there!"
Tom smiled, put his hand on the manager's shoulder and said "Of course I'll back you up if that's what you want. A new front pipe costs what - about £6.00 to the trade - I would say £6 against £30,000 is a pretty good return. Why not give the man a ring, tell him you don't accept it's your fault but as a goodwill gesture, you'll put a new front pipe on for him free of charge?"
That's what happened - the pipe was replaced to the customer's delight. That medical student becaame one of Edinburgh's top teaching surgeons and today, his entire family swear by Kwik-Fit and recommend the company to friends and colleagues. Sir Tom Farmer has long since retired, but he is one real gentleman and a character I learned to love while I worked for Kwik-Fit - a tough boss, but always fair and a shrewd businessman!
So - James 1077 - you have proved that not all bean-counters or abacus-rollers are bad!
Hope BA gets the message!
Paxing All Over The World
rjc54n
As many staff have told us in this (and other) threads - they WANT to help the loyal customer, many of whom they have seen over the years and know their faces, or can see their booking history on the screen. But they are actively PREVENTED from doing anything to help.
It is the change to short term profit by BA (and countless others) that is helping the new and small companies, or those that have not yet been infected by the driving need to keep the stock market price high. Because companies are now judged SOLELY on stock price - everything else gets subsumed to it. In the end the company fails and the Board stand around shaking their heads. As always, the answer is so simple - listen to the people who work at the 'coal face'.
bealine - Great story.
in my business I would be despairing that my staff failed to take care of a loyal customer of huge value.
It is the change to short term profit by BA (and countless others) that is helping the new and small companies, or those that have not yet been infected by the driving need to keep the stock market price high. Because companies are now judged SOLELY on stock price - everything else gets subsumed to it. In the end the company fails and the Board stand around shaking their heads. As always, the answer is so simple - listen to the people who work at the 'coal face'.
bealine - Great story.
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Over the long term I understand no airline has made money. The loco phenomenon may change this - we dont know yet.
But what it suggests is that the industry as a whole is non profit making and its merely a matter of timing as to when you make the profits or losses. That being the case, whatever strategy you follow - you lose.
BA have to run for cash, given how fast they are burning it quite simply they will fail if they dont turn it around. All else goes out of the window, survival is all. Worry about the fall out if you are still around to worry about it.
But I still find it bizarre a company in this case BA offered benefits and rewards to their best customers and then constantly revoked the benefits and alienated those same prime customers when the times were good.
But what it suggests is that the industry as a whole is non profit making and its merely a matter of timing as to when you make the profits or losses. That being the case, whatever strategy you follow - you lose.
BA have to run for cash, given how fast they are burning it quite simply they will fail if they dont turn it around. All else goes out of the window, survival is all. Worry about the fall out if you are still around to worry about it.
But I still find it bizarre a company in this case BA offered benefits and rewards to their best customers and then constantly revoked the benefits and alienated those same prime customers when the times were good.
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But I still find it bizarre a company in this case BA offered benefits and rewards to their best customers and then constantly revoked the benefits and alienated those same prime customers when the times were good.
Sometimes, I just wish we would just let the grass grow for a moment and concentrate on the things we're good at!
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Guide To Customer Service
The book referred to a few posts ago is Carl Sewell’s “Customers for Life”. It’s a great book and has a number of examples of how simple ways of doing business can be very effective in building good customer relationships.
I am familiar with his car dealership network and I can say that they have a great reputation. And remember, we’re talking about a car salesman.
A few of his commandments for business…
• Underpromise, overdeliver: Never disappoint your customers by charging them more than they planned. Always beat your estimate or throw in an extra service free of charge.
· Fire your inspectors and Customer Relations Department. Every employee who deals with clients must have the authority to handle complaints.
• No complaints? Something’s wrong: If you never ask your customers what else they want, how are you going to give it to them?
• Measure everything: Telling your employees to do their best won’t work if you don’t know how they can improve
• Borrow, borrow, borrow: Sewell, for example, learned about hospitality from Japanese culture, cleanliness from Disney, and politeness from his mother.
A little off topic but food for thought since this thread has drifted toward why customer service and customer facing employees want to do a good job but short term business goals prevent this from happening.
Trakball
I am familiar with his car dealership network and I can say that they have a great reputation. And remember, we’re talking about a car salesman.
A few of his commandments for business…
• Underpromise, overdeliver: Never disappoint your customers by charging them more than they planned. Always beat your estimate or throw in an extra service free of charge.
· Fire your inspectors and Customer Relations Department. Every employee who deals with clients must have the authority to handle complaints.
• No complaints? Something’s wrong: If you never ask your customers what else they want, how are you going to give it to them?
• Measure everything: Telling your employees to do their best won’t work if you don’t know how they can improve
• Borrow, borrow, borrow: Sewell, for example, learned about hospitality from Japanese culture, cleanliness from Disney, and politeness from his mother.
A little off topic but food for thought since this thread has drifted toward why customer service and customer facing employees want to do a good job but short term business goals prevent this from happening.
Trakball
Shining Example, apparently...
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why customer service and customer facing employees want to do a good job but short term business goals prevent this from happening.
I have to comment on James 1077's posting (at the risk of being blacklisted from PPr bashes!). Maybe I have a different perspective here but as a recipient of 'beancounter' statements, I'd be alarmed to see one with uncharged listings. Here's why, and I'm being a little brutal:
- Every item on your bill represents costs you have incurred to create value for me. You're entitled to recoup these and add your markup.
- If you're comp'ing me some items, I'm going to wonder how competitive your rate is for the others - maybe I should see who else is out there?
- Diligence: If you're as free with my lesser interests as you are with your own, maybe I need to pay closer attention to you...
- ... and maybe I should question the longer term viability of your business, as your other customers may be thinking the same.
- Finally, and here's the biggest: If there's more than just $50 of 'no charge' work, I have to alert our Ethics Committee, as favours can imply conflicts of interest. There may also be provisions in contract law and antitrust law that render undercharging as questionable, or worse. Neither are my areas, but I'd want assurances in both.
Finally, just so I don't like a complete ass, I've never turned down a beer on the house
