As markets continue to become more and more saturated, firms are in need of more and more points of differentiation; factors that set them apart from the rest. A point of differentiation that can be applied to most, if not all businesses, is superior customer service. The need for quality customer service is mandatory for business leaders who plan on gaining and maintaining market share for years to come.
As Warren Buffet once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”. Over the last year, some of the biggest airlines, particularly in the U.S., have decided to place profits above all else. For example, United Airlines had a massive customer service related disaster earlier this year when a passenger was brutally forced and dragged off United Express Flight 3411. The reason this incident occurred was due to United overbooking their flight, and putting their employees before their customers. One video of the incident was viewed over 6.8 million times in less than a day on social media, spreading this misstep far and wide. Both the general public and investors weren’t too impressed by this PR disaster as United Airlines stock (United Continental Holdings Inc. NYSE: UAL) dropped by $1.4 billion after their passenger-removal controversy. All actions have consequences, and United Airlines most definitely learned this the hard way.
At the other end of the spectrum, Alaska Airlines seems to be putting their customers before all else, as mentioned in classmate Alexander McGuigan’s blogpost. The airline has made it a point to ensure all employees go out of their way to make certain customers enjoy their time while flying with them. This strategy of putting the customer first will be key in order for Alaska Airlines to continue gaining market share.
“On average, it costs approximately five times more to attract a new customer to your business than it costs to retain an existing customer” (Adams, 2016). Managers and owners need to continue to stress the importance of customer service to their employees. In today’s world, one customer service error could land your company in hot water across the globe, thanks to social media. Quality customer service increases customer satisfaction and customer retention which causes repeat purchases, which is crucial for almost every business to be successful.
Money can’t buy public perception, reputation, and word-of-mouth advertising. These priceless features come with consistent quality customer service. “Today, only four out of every 100 businesses last through until the 10-year mark” (Adams, 2016). If your business is looking to be one of those four, you better be willing to put your customers on a pedestal.
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Sources:
Adams, R. (2016, December 12). 10 Reasons Why Good Customer Service Is Your Most Important Metric. In Entrepreneur . Retrieved from https://www.entrepreneur.com/article/284799
Mokhtar, A. (n.d.). 5 reasons why repeat customers are important to your business. In EasyStore. Retrieved from https://www.easystore.co/blog/142771854793691954/5-reasons-why-repeat-customers-are-important-to-your-business?locale=en_US
Shen, L. (2017, April 11). United Airlines Stock Drops $1.4 Billion After Passenger-Removal Controversy. In Fortune . Retrieved from http://fortune.com/2017/04/11/united-airlines-stock-drop/
Market Share (n.d.). In Investopedia . Retrieved from http://www.investopedia.com/terms/m/marketshare.asp
Zdanowicz, C., & Grinberg, E. (2017, April 11). Passenger dragged off overbooked United flight. In CNN. Retrieved from http://www.cnn.com/2017/04/10/travel/passenger-removed-united-flight-trnd/index.html
Ekstein, N. (2017, May 24). Why little Alaska Airlines has the happiest customers in the skies. In MSN Money . Retrieved from https://www.msn.com/en-us/money/companies/why-little-alaska-airlines-has-the-happiest-customers-in-the-skies/ar-BBBtL2u?li=BBnbfcN
Cubbon, P. (Narrator). (2015). Identifying Points of Parity and Differe [Online video]. Retrieved from https://www.youtube.com/watch?v=_A2WvZHgyO0
McGuigan, A. (2017, October 15). Alaskan Hospitality – How Alaska Airlines is Betting on Customer Service Over Profits to Rise to the top. In Blogs.UBC. Retrieved from https://blogs.ubc.ca/alexandermcguigancomm101/2017/10/15/alaskan-hospitality-how-alaska-airlines-is-betting-on-customers-service-over-profits-to-rise-to-the-top/
Photos (in order they appear):
(2017). [Image of painting]. CSN. Retrieved from http://www.customernet.com/poor-customer-service-is-rife-its-time-to-put-consumers-first/
Yablon, J. (Artist). Airline Customer Service Under Duress. [Image of painting]. Retrieved from http://answerguy.com/2016/12/19/airline-customer-service-duress/
