The Customer Service Survey

A Tale of Two Airlines

by Peter Leppik on Wed, 2017-04-12 15:37

This has been a bad week for United Airlines. After making news for having a paying customer dragged off a plane, bloody and unconscious, for refusing to accept $800 to take a later flight, another slightly-less-horrible story emerged of a United first-class customer who was threatened with handcuffs if he didn't give up his seat to a "higher priority" first class passenger.

It's no surprise these stories went viral. They've got everything: giant faceless corporation beating up its customers (literally!), tales of woe about how unpleasant air travel has become, astonishingly tone-deaf non-apology. At least United didn't also kick puppies and kittens out of spite.

But there's another side to this story, one with some important lessons for Customer Experience. Because at the exact same time United was digging itself furiously into a PR hole, Delta managed to score some positive press when a customer wrote about getting paid $11,000 not to fly in the middle of Delta's own system-wide scheduling fiasco.

On paper this should have been a terrible week for Delta, too, since the airline cancelled thousands of flights after severe weather rolled through Atlanta. And there were certainly stories out there about customers struggling to get home and chaos in airports. So why is it United that lost a billion dollars in market value and not Delta?

The answer lies in an interesting pair of statistics: among the four largest airlines, Delta overbooks the most. But Delta, in contrast to its competitors, almost never bumps passengers involuntarily. Instead, Delta tries harder to get passengers to give up their seats willingly in exchange for compensation.

That's how a family was able to score $11,000 by negotiating with Delta for not flying. Delta empowers its staff to offer more compensation in exchange for customers willingly freeing up seats.

Meanwhile United apparently decided to draw the line at $800. When nobody was willing to accept that to give up their seat, they had left themselves no option but to remove already-seated passengers from the plane, by force if necessary. In hindsight, United probably wishes they had been a little more flexible and offered more money.

There's two CX lessons Delta has figured out that United hasn't. First, sometimes it's better to spend a little more money upfront to keep customers happy and avoid bad publicity. That's obvious.

Second, and more important, Delta understands that there is a segment of their customer base who likes making deals, customers who think about overbooked flights with anticipation, not dread, since they see an opportunity to score cash and free travel. Customers who get so excited about getting paid $11,000 to cancel a family vacation that they write articles about how they did it.

The accountants will probably do the math and say that Delta paid way too much to free up six seats total (from a family of three who cancelled a round-trip). That's almost $2,000 per seat, way more than the amount Delta would have been legally required to pay for involuntarily bumping those passengers. But what the purely financial analysis doesn't take into account is the fact that people hate being bumped involuntarily. There's a cost associated with forcing a customer to give up his seat against his will.

Usually that cost is hard to quantify, but this week it because large and obvious. Don't fall into the trap of ignoring the hidden cost of bad customer experience.

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