I was astonished. The vice president of a top-ten airline stood at the podium of a major research conference as he relinquished the last remnant of competitive advantage for his company.
In his speech, he proclaimed that U.S. airlines are in a commodity business. He asserted that the airlines are little more than a conveyance between points “A” and “B.” Moreover, there is little that any airline can do to differentiate itself other than by price, and should strive to be as efficient as possible, he said.
Decorum precludes me from mentioning the presenter by name. But, he works for an airline located in “America” and it flies out “West.”
Being from Dallas, I had to ask the obvious question: “Sir, if air travel is a commodity and times are understandably tough, why does Southwest Airlines continue to show a profit?”
“Well,” he paused, “We are not Southwest Airlines. Besides, they are kind of a special case.”
I couldn't help but agree with his conclusion, having been subjected to two of his discourteous crew members that week.
Air travel as a commodity? I suppose if you studied enough forecasting models and financial statements, a sense of cynicism might lead you to that conclusion.
But as airline passengers, we know something that he apparently doesn't: kindness and decent treatment by flight crews can make a remarkable difference to us.
I admit it. I will do almost anything to avoid traveling on certain airlines based upon past in-flight experiences. If I am booking online, I'll look down the list of fares and pick the price and time that best meet my needs while carefully avoiding certain airlines that are on my “S” list.
Admit it--you do it too. And for those of you who are sometimes forced to go against your “S” list by a company policy, you know how irksome and icky it feels.
Doesn't sound like consumer behavior in a commodity market to me.
Listen, this is not a rant about the quality of air travel. Heaven knows the airline industry has been through enough.
I was on an airplane on 9-11, and I was back in the air the following Saturday. A month later, I was waiting to board my flight in Boston as American Airlines' Chairman and CEO Donald Carty and former CEO Robert Crandall stepped off the jetway to deal with the termination of the head of security at Logan Airport.
So, I've been in the middle of it as much as any other frequent flier.
What I'm talking about is something that can serve as a key differentiator for airlines or most any other company. Companies that have this precious quality can decidedly distinguish themselves in seemingly commoditized markets.
The quality of which I speak is an unwavering attention to good service.
Right now, our society is yearning for good customer service. We see so many bad examples that it is easier to point out those few meritorious encounters that are exceptional.
Nordstrom is a retailer that has one such reputation for exemplary customer service. So much so, that an urban legend has lingered for years that illustrates its reputation: A consumer walked into a Nordstrom store with two automobile tires. He asked for a cash refund, and yet he didn't have his receipt.
The tires were supposedly a gift, and they were in like-new condition. After listening to the customer, the Nordstrom employee graciously accepted the tires, handed over $250 cash, and bid him a good day. Of course, Nordstrom doesn't even sell tires.
This story, whether fact or fiction, demonstrates two important realities. First, we have a longing for good customer service. And secondly, we want to recognize and share stories of extraordinary customer service with others.
The positive attitude and humor of the folks at Southwest Airlines is almost legendary. Chairman Herb Kelleher's antics and persona continue to pervade the culture of the company after 30 years of his enthusiastic leadership.
Dedication to customer service always follows the trickle-down theory in corporate cultures. The other part of Southwest Airlines' secret? The company has a reputation for hiring on the basis of a positive attitude and sense of humor.
I know that mission statements don't typically mean much, but based on my experience, it seems that Southwest Airlines has truly put theirs into practice:
“The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”
Interestingly...not one word about airplanes, flights or schedules. It essentially focuses the company's attention on attitude toward customers.
The Malcolm Baldrige National Quality Award is bestowed upon companies that exemplify excellence in the areas of leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and results.
Only one hotelier has been the recipient of this prestigious award: The Ritz-Carlton. By the way, it's won the award twice, in 1992 and 1999. If you've ever been a guest at a Ritz-Carlton, you've experienced the best service that can be provided in the hotel industry.
Each employee carries a copy of the Gold Standards--the foundation and principles upon which Ritz-Carlton operates. They are worth reading and memorizing.
How dedicated is Ritz-Carlton to the concept of providing quality customer service?
The company established the Ritz-Carlton Leadership Center in 1999. Since that time, more than 10,000 senior executives and mid-level managers from other companies have learned the secrets of increasing customer retention and loyalty from a true leader in service excellence.
Does providing good customer service cost a lot? Sure, with the proper hiring and training, you bet it does.
But in the long run, failure to provide good customer service costs companies more than they will ever realize...until it's too late. By then, they've become a commodity.