Tag Archives: Word of Mouth

American Airlines’ Poor Policy Costs $75,000

A recent experience trying to get a standby seat on an American Airlines flight left me baffled.  What does it say about a company if they could treat you well, but don’t?  Does such a company value your business or take it for granted?


  • The plane had available seats.
  • I had a ticket on a later flight.
  • The gate agent said that American Airlines’ policy was that I couldn’t get a free standby seat.  (Not a friendly policy, but I can understand that they might want to charge a “change fee” to take a different flight.)
  • BUT adding insult to injury, the policy also prohibited the option of paying a change fee to take the earlier flight.  Huh?  Are they afraid they’ll run out of peanuts?

It used to be that customers could take an earlier flight, if space were available.  Now, even when space is available you can’t buy a seat?

From a customer experience perspective this policy is, well… stupid.  The policy is just as detrimental from a business perspective because customers have choices.  In this case, I walked further down the terminal to a rival airline (Southwest) and paid $250 for a ticket.  What did/will the policy cost American Airlines?

  • An unsatisfied customer who will relate the poor experience via word of mouth
  • A nominal change fee
  • Approximately $75,000 (future value of my air travel)

The pivot point is that companies should seek ways to serve customers and earn their loyalty instead of implementing policies that alienate customers.  Last I checked the airlines weren’t so healthy that they could look down their noses at customers.  But if American Airlines chooses to implement such a policy, then consumers can certainly choose to take their business elsewhere – I did and I will.

What companies have earned your scorn and lost your business?

The Top 1,000,000,000 Reasons to Listen to Your Customers

While others write about the Top 10 Reasons to listen to customers more powerful examples are all around us.  After all, if Zappos can generate $1B in word of mouth (WOM) revenue why do companies continue to ignore their customers?  Satisfied customers are the best sales channels ever!

The Best Sales Channels:

  • Generate Additional Business – If customers are willing to speak favorably about your company or its products, they’re likely to make additional purchases.  This willingness to purchase more comes at no additional cost, the next benefit of WOM.
  • Are Cost-Effective – We often think in terms of acquisition costs.  Some businesses measure success with ratios of 3:2.  If it costs $3 to acquire a customer who spends $2 they declare victory.  This model only works with recurring revenue streams, when the customer lifetime value is considered.
  • Reach New Customers – This is the true power of WOM advertising, and why Fred Reichheld ‘s The Ultimate Question have gained such momentum.  Once a company has set a positive experience in motion with one customer that good reputation spreads and other customers seek out the company’s products and services.

    If WOM still seems touchy-feely (and the $1B doesn’t convince you) then it’s worth considering that any B-School professor would tell you that leveraging fixed assets is a wise choice; it magnifies benefits across a larger number of consumers.  The same applies to WOM advertising.  Respecting customer’s needs and supporting customer goals is really just good business sense.

    The pivot point is that by listening to customers you can continually spread your acquisition costs.  Happy customers encourage others to buy whereas unhappy customers actually increase the barriers and impediments to sell.

    With one billion reasons to listen to customers, where will you start?

    Eurostar Earns a Second Chance

    In my last post, I had some harsh words and pointed advice for Eurostar’s customer service team.  Over two weeks from my initial inquiry, Eurostar’s Traveller Care team responded.

    Here’s how I graded the end-to-end experience.

    • Responsiveness – Poor. Two-plus weeks for a response of any kind is just too long.

    Read the rest at BNET.