Putting the customer first

An airline business is a business for the brave hearts and the daredevils. As Richard Branson of Virgin Airlines said, “It is very easy to become a millionaire in the airline business; you just have to start out as a billionaire.” World over the airlines industry is littered with companies that had to exit the cut throat airline business.

Southwest succeeded in making profit and that too in the no frills low cost segment. Discussed below is a refreshingly different approach of Southwest towards itself, its employees, its customers and the industry in which it operates.

Market entry strategy: In September 1993, Southwest Airlines decided to have flights from the New Baltimore centre to Cleveland. Five weeks prior to the first flight, Gerb Kelleher, CEO, Southwest and the Governor of the State of Maryland declared opening a branch of the company in Baltimore, and Kelleher handed to the Governor a special "wonder-working remedy" for solving the problem of high prices for the inhabitants of Baltimore.

When the company has made the decision to establish a route at a rate of 49 dollars, it organised a free trip for 49 school boys from Maryland to a Cleveland zoo. Then to all travellers in Baltimore who travel short distances, the company had dispatched special messages, suggesting them to take advantage of the programme of discounts that Southwest offered.

Southwest also distributed brochures, this was followed by a series of advertisements on TV and in the press. Such combination of public relations, direct mail circulations, advertising of the prices and conditions of fulfillment of flights in press and television had led to record quantity of advanced orders - 90 thousand passengers had purchased tickets prior to the beginning of the flights.

Southwest Airlines dynamic CEO and his innovative management style: Herb Kelleher had this fun loving persona that fitted to the bill his role of the CEO of the head of the “most entertaining airline in the world”. His funny yet radical tactics have helped the airline tide over turbulent times and controversies. One such incident was his arm wrestling showdown with the CEO of Stevens Aviation in 1992.

Both Stevens and Southwest were using the advertising tagline "Plane Smart." To settle the matter, Kelleher suggested an arm wrestling competition with the winner getting to keep the rights to the slogan. Kelleher lost the match, but the event generated so much good will and publicity that Stevens let Southwest continue the use of the tagline.

Herb Kelleher’s enormous success with Southwest proves the point that to be a successful CEO or an entrepreneur, one needs to have that fun and devil may care attitude. This attitude will make the company to reap profits even in the downturn. Southwest has been a consistent performer even in the times of recession.

Post 9/11 when most airline companies were bleeding, Southwest did well. This was due to the excellent relationship that Southwest had with their customers. Customer first approach: Post 9/11 Southwest began to get requests for refunds from customers who had purchased tickets but were then afraid to fly.

Most of the competitors of Southwest decided to allow the refund, but added a “refund penalty” to cover their cost and lost revenue, but not Southwest. It put itself in its customers’ shoes. Southwest thought, “Why should we penalise people who had become fearful of flying due to circumstances beyond their control?”

So, Southwest took a risk and decided to offer full refunds to anyone who asked with no penalties. No questions asked, Southwest was counting on its customers not to make a bee line on refund request. Why? Because Southwest had developed a great relationship with its customers and trusted they would have faith in their service.

Customers proved Southwest right. Most of them did not ask for a refund. Southwest was overwhelmed when many customers sent their tickets in with notes saying “Southwest Airlines take this ticket and keep it. I don’t want my money back…I just want you to be in business and today you need the money more than I do.”

Southwest CRM practices: Southwest Airlines sends a birthday card to its most frequent customers. One year, a customer called to let Southwest know that they were the only one who remembered his birthday! Southwest would often invite its customers to participate in company events. Halloween was one of the holidays that Southwest celebrated in a big way.

Every department competed by having a theme and some even put on shows for customers. Fun with Southwest: When things get stressful at the airport, due to bad weather causing delays, Southwest plays gate games with its customers to relieve the stress. The gate agent might announce to the customers sitting in the boarding area that Southwest was giving a $25 off coupon for their next flight if they had a hole in their socks.

People took off their shoes and held up their foot, it is a lot of fun and takes the customers’ minds off the delayed flight. Southwest pilots and flight attendants have a fun attitude. A pilot might walk into the plane with a briefcase. Sticking up outside the briefcase is a book entitled “Idiots guide to learn how to fly a jet plane”,

or the flight attendants would announce that there was an individual on the flight who was celebrating his 95th birthday and would asked the entire cabin to sing Happy Birthday song. At the end of the song, he/she would then announce that the 95 year old pilot was very grateful for their attention.

One year Southwest was challenged by the FAA (Federal Aviation Administration) to change its funny on board announcements as they felt people were not taking the safety messages seriously. Southwest argued back, to the contrary, it felt that because it infused humour into the typically rote and boring announcements, people listened more. The FAA finally agreed and dropped the issue.

Employees are internal customers at Southwest: Southwest created a dollar bill with Herb Kelleher’s picture in the center and sent these Herb Bucks to its most frequent fliers, asking that if they saw a Southwest employee going above and beyond the expected service, they would give them an Herb Buck.

At the end of the programme the employees would be able to purchase items from a catalogue with the Herb Bucks. The programme was so popular that within weeks Southwest’s customers were calling in asking for more Herb Bucks. They were having a great time and it was a great way to tie customers to employee recognition programme.

Customers were often featured in Southwest onboard magazine, “Spirit,” such as Chuy’s restaurant when it announced that they only opened new restaurants in cities served by Southwest. Customer centrism the motto of Southwest: Southwest created committees to review operational failures.

The rule of thumb was for the employees to ask themselves “If my mom had been on board, would I be happy with the way she was treated?” Southwest keeps an empty chair in marketing meetings to remind itself to consider the customer. Frequently, employees were given $25 coupons and asked to recognise any customer doing something nice.

One scenario often repeated was a young mother and child boarding late. Because they were the last to board, many a times there were no seats together. The flight attendant would make an announcement asking if any passenger would be willing to move so the mother and child could sit together. Somebody always volunteered.

The flight attendant would then seek them out during the flight and thank them for their kind deed by giving them a $25 coupon that they can use for their next flight. They were always pleasantly surprised. For many years employees of Southwest got their paychecks with the message “Provided by our Customers” to remind the employees of the customers’ importance.

Anytime the words ‘Customer or Employee’ were written, they were always capitalised to stress the importance of both.These customer service principles are generic enough that most companies can implement them. It’s not rocket science, rather its common sense. The golden rule…putting yourself in others shoes, being nice…seemingly simple concepts that a smart company like Southwest realised and which keeps it at the top of its game.

By:DR M ANIL RAMESH