Way back in 1980 – long before the days of the internet – in a time when “social media” meant a party organized around watching a sporting event on television – executives at Braniff had a problem. They needed to find a way to differentiate their airline from other airlines. The question they asked was simple,
“What can we offer to our customers that they will perceive as having high value yet costs us virtually nothing to provide?”
The answer to that question is what we now know as the “frequent flier miles” program. It was a GREAT idea so – of course, other airlines quickly copied the concept. While in Braniff’s case it was a great idea which came too late – other airlines instantly recognized the brilliance of offering repeat customers an intangible which cost virtually nothing yet was valued highly by those customers.
The success of the customer loyalty programs in general is well documented. Since the cost to acquire a customer is commonly accepted to be from 4- 15 times more than the cost to retain a current customer – finding a way to retain current customers by simply providing discounted fares – on seats that normally would be empty- was nothing short of a marketing miracle. When one considers that a business traveler may spend over a half a million dollars on airline tickets during the course of his/her career – it’s easy to see why frequent flier programs are a staple in the airline industry. The airline industry as a whole has struggled over the past decade as the dual horrors of market maturity met national security for the sector. However, while airline executives blame fluctuating fuel costs and labor woes on their troubles- a quick trip around the blogosphere reveals quite a different picture.
With the exception of South West – the major airlines are struggling to provide basic customer service – and customer service woes make GREAT blog fodder. Dave Carroll created a social media shit storm with his “United Breaks Guitars” music video. The creation of that video wasn’t the result of a single “dropped the ball” in the customer service department at United Arilines – it was the result of consistent and blatant disrespect of the customer. No amount of frequent flier miles could placate Dave Carroll. On the heels of that debacle – United’s social media woes continued to make news when Wang Jianshuo – a famous Chinese blogger – documented his horrific experience in flying United Airlines.
Now however – the customer service horror stories are moving from the plane to the computer and the lack of customer attention is infecting the very lifeblood of a major airline’s frequent flier program. Matt Cutts documents his own Bad Experience with U.S. Airways Dividend Miles and the post does not paint a pretty picture for US Airways. The post is acting as a sounding board for others who feel free to share their bad experiences inside a US Airways flight as well. For those of you don’t know – Matt Cutts is Google’s “front man” who blogs frequently about how to get your web site to get better visibility with the search engine giant.
Talk about a worst case scenario when it comes to social media in action – if there’s one blogger I would HATE to have “bitching” about my business – it would be the man who is the front man for Google’s search.
The PURPOSE of the frequent flier program was to create customer loyalty. By implementing this game of “bait and switch” – US Airway’s frequent flier program is beginning to look like a shell game. Matt Cutts is blowing the whistle. It will be interesting to see (if) how US Airways responds.
If there’s one thing business owners MUST know about social media – it’s the unadulterated view of your business it provides. You can sit in your office, close the blinds and tunr off the lights and tellyourself that your vision of your business is shared by your customer.. However, a quick trip via social media airlines will give you the “real” picture. Whether or not it’s a picture you want to see is another story.
If there’s one lesson for businesses big and small to learn from social media – it’s that your customers are talking just as they’ve always done. However, thanks to social media – you now have an “insider’s view” of what’s being said when the customer service stories are being told.