You can’t buy loyalty, but giving away a lot of points sure doesn’t hurt.
Southwest Airlines is investing heavily in customer satisfaction to keep its historically loyal customers from booking elsewhere after winter storm Eliot upset their holiday operations. On January 2, Southwest Airlines gave every customer significantly interrupted by Winter Storm Elliot 25,000 rewards points as a goodwill gesture on top of refunds and reimbursements.
That’s a generous gesture for an airline that is going to take a big financial hit from the flights it canceled between December 21 to 31. According to a filing Southwest made with the SEC, this could be the most costly mass cancelation event ever. It’s indicative of how much value the company places on customer experience as a factor in loyalty.
I spoke to a couple of colleagues who were impacted over the holidays by Southwest Airlines and who also received the bonus points. None of them are swearing off Southwest for life, and they did appreciate the points, so the airlines may have bought itself some grace with this additional investmen in customer satisfaction. It certainly highlights to me how critical and valuable customer loyalty and the customer experience are going to be for travel and tourism in 2023.
While rewards points are nice, it looks like the airline industry will need to make some additional investments in cloud computing and modernizing its processes to ensure its passengers don’t go through this type of experience again.
A bomb cyclone blew up my API.
Elliot was a big storm—a bomb cyclone to be exact—and some disruption was to be expected. However, all the other airlines dealt with the same snowy conditions and were able to get back on schedule within days. One of the key challenges for Southwest, it turns out, was its reliance on outdated legacy software that didn’t integrate well. And as you probably guessed, it couldn’t scale to the problem.
The Wall Street Journal (WSJ) has done an excellent job uncovering the holiday challenges at Southwest—from technology to process—and I encourage you to read the full article. One of the key systems that Southwest relies upon to reassign crews after flight disruptions couldn’t scale to the number of queries caused by the storm, according to the WSJ. The software uses an algorithm and pulls data from multiple systems to match crew members with the flights they should work. The software got completely overwhelmed by the sheer number of requests, couldn’t pull data from integrated systems, and caused a cascade of downstream problems.
To get things back on track, Southwest ultimately had to shut down a huge portion of their operations. Unfortunately, this type of event happens frequently at many businesses that rely upon outdated systems. It’s a known problem, and a lot of organizations try to kick the can down the road.
“We’ve talked a little over the last year about the need to modernize the operation and invest. This is why,” Bob Jordan, CEO of Southwest Airlines, wrote to employees the day after Christmas.
It sounds like Southwest is making all the right moves to improve its systems and keep its customers happy. Hopefully they will inspire other airlines relying on legacy systems to modernize their operations, whether it’s their scheduling system or their contact center. All of these systems are often intertwined, and while APIs might be the red-headed stepchild of the SaaS world, they can’t be ignored or glossed over when making technology decisions.
The traveler’s dilemma.
As I was probing people about their Southwest experiences over the holidays, my colleague Génesis was kind enough to give me a blow-by-blow of her odyssey home to Texas from her in-laws’ in Pennsylvania. Her story highlighted the criticality of some of the decisions the traveler has to make and why customer service is so important in this industry.
Génesis, her husband, and her dog were visiting family for the holidays and found out the day they were supposed to go home that their flight was canceled, and they wouldn’t be able to rebook a new flight for at least another five days.
Génesis’ husband works in a lab and can’t work remotely, which put immediate pressure on them to find a flight home as quickly as possible. It was an extremely crowded house in Pennsylvania and not comfortable for an extended stay with their dog. Since they had friends in New York City near the airport, they decided to head north and worked with Southwest to find another route home. Unfortunately, after multiple back-and-forth conversations with Southwest, they were unable to speed the process and couldn’t book a flight for another five days.
I don’t want to give the impression that they were forced to make life-and-death decisions over the holidays, but Génesis and her family were in a bit of a pickle and they got a bit lucky. They were able to stay with friends in New York City and avoid an expensive hotel bill (a dog can severely limit lodging options), her husband’s work was understanding of the situation, and they did make it home safe and sound. But they had to make a number of somewhat serious decisions in a short period of time:
- How will this impact my job?
- Where am I going to sleep?
- Where is my dog going to sleep?
- How will this extended stay impact my personal finances?
All these questions concern basic human needs, and it’s natural to get upset when you feel they are threatened in normal circumstances, let alone when you are far away from home. A customer service strategy for travel and tourism that ignores this basic psychology is unlikely to engender a lot of repeat business from travelers.
Anything that an airline or lodging provider can do to make those decisions easier for the traveler is going to be rewarded with customer loyalty. It could be as simple as a virtual agent that helps you book a hotel if your flight is canceled and automatically asks you if you have any special needs like traveling with small children or pets. Or it could be the ability to immediately escalate a digital engagement to a live agent who has access to all your travel preferences and needs.
That type of customer service goes a long way in good times and can create life-long customers when things don’t go smoothly. As I discussed in last month’s blog, Frontier Airlines’ decision to remove the lifeline of live voice from their contact center could impact their ability to retain customers over time. As we’ve seen from Southwest, focusing on the customer experience in times of crisis allows you to ride out the bumps from any turbulence you may experience.