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Monday, December 16, 2013

Twisted thinking - #1 Airline pricing takes the cake

This is a new series on Twisted Thinking.  Now we could go a lot of places with this topic, but it is intended to show what happens when companies (or entire industries) get too focused on themselves and on short term profits and don't think about the long term value of customer intimacy and providing true value. 

Hands down, airplane pricing has to be the single best example of twisted thinking in the history of man.  It takes the cake.

Where else would you:
  1. Discount your product if people will take three different airplanes (with three different crews, fuel for each one for three different take offs and landings and potentially three GDS segment fees) to get to their destination.  Oh and three planes back as well, so multiply everything by two.  
  2. Conversely, charge them more if they take a non-stop to their destination - your lowest cost option.
  3. Penalize your best customers by charging them more for aisle and window seats, when you could just offer the infrequent traveler a discount on the center seat and retain the good will of your regular customers. 
  4. Charge the people sitting in the same row (assuming 3 seats on either side) on your plane up to six different prices for the same exact product, knowing full well that they may talk to one another and be upset with you.
  5. Not give a refund if a passenger has to cancel his/her trip, even though you know can resell that seat.
  6. Similarly, if the customer only needs the outbound and does not need the return flight, keeping 100% of the airfare.
  7. When redeeming frequent flyer points, make it easiest (fewest points) to take the 2 leg connection.  That's right, take a seat on three airplanes in each direction vs one, when those seats could have been sold to someone else.


 If you did your homework on the last series, you will have already read the Go Giver by Bob Burg and John David Mann and you will know that absolutely everything about this violates the first law of stratospheric success and seriously compromises several of the other laws as well.


If airlines insist on getting paid for every individual element of service, that diminishes the value of the entire experience, as they have not given more in value than they have taken in payment.

On the law of compensation, airlines definitely serve a lot of people.  How well they are served, if simply judged by getting them from point to point safely and on time, is a matter or record, judged by the Department of Transportation.  

Their influence however, is much less than it could be, if they were abundantly placing the interest of their customer's first.  Southwest has mastered this and even though they are now on par with most airlines on pricing, they still give off the "love" vibe that is at the company's roots.  The employees love working there and it shows and their customer love that Southwest has shed a bit of the status quo of the industry and that everyone seems to have fun when they fly.

Being authentic is something that many airlines have forgotten.  When they say that they care, they have to really care.  It has to show in your pricing policies, your service and in the attitudes of your people.

On the final law, while at a corporate level being open to receive doesn't seem to fit, I would suggest that the airlines need to at least receive this bit of advice.  Buy the GoGiver for the entire executive team.  See how you can reshape your Twisted Thinking on pricing.


At the risk of sounding like Jeff Foxworthy, I leave you with this.

If something makes you scratch your head, it just might be Twisted Thinking.

Stay tuned for tomorrow's blog -  Passwords - the bane of my existence.

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