Not in the Spirit of Good Customer Service

I have always been fascinated by things aeronautical and have had a long association with the local aviation industry as both a recreational and commercial pilot. I’m an unashamed plainspotter from way back and I follow developments in the global airline industry quite closely. So it was with some surprise that I read about an appalling incident in which the arrogant CEO of a U.S. airline sent a vitriolic personal email response to a customer that had complained.

I always thought that customers were stakeholders in any business, the oxygen supply that ultimately determines the difference between success or asphyxiation. Apparently not according to Ben Baldanza, CEO of Spirit Airlines in Florida. Spirit is a high growth low cost carrier that primarily serves a niche market between the U.S. and Carribean/Central America. Most of its customers are low to middle income holidaymakers and returning migrants.

Last year Baldanza was forwarded a complaint by a couple who missed a concert because their flight was delayed. The couple wanted a refund for both their flights and concert tickets. In any angry outburst Baldanza “inadvertedly” replied directly to the couple by email instead of forwarding his response to the customer service rep. He basically told them where they could shove their refund claim form. “We owe him nothing…let him tell the world how bad we are.”

That’s exactly what the complainants did, with just about every consumer advocacy and business blog in the U.S. picking up and running with the story. Bad news travels fast. I first read about this incident through an article in Air Transport World appropriately entitled “How Low Can You Go?”. Apparently Spirit Airlines prides itself on the fact that there is no receptionist to greet visitors arriving at their headquarters because this saves 2 cents per customer. It seems like the company has a lot to learn about relationship building and delivering on service.

I mention this episode because it underlines how the Web can be a twin edged sword. Sure it allows aggregation of content and customers and a hefty global reach. But it can also bite back hard when things go wrong. Corporations can no longer rely on anonymity in a connected marketplace. It doesn’t matter that James and Christine only paid 75 buckseach  for their air ticket – they are still valuable customers. Reputational capital is an important part of a company’s intangible asset base.

To be fair, the airline did offer to refund the price of the air tickets only. But why was the CEO even dealing with this complaint in the first place? Clearly not his area of expertise. If your business does not have a quality assurance programme and strategy for dealing with complaints it is fatally flawed. Oh – and by the way, Spirit Airlines made a loss of $US 49 million in 2007.

4 thoughts on “Not in the Spirit of Good Customer Service

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Jason Rakowski

  2. Great article.

    Your readers might want to try a leading customer service review website where people share reviews with other users and with companies. Companies that are involved with and value customer service read Measuredup to keep up on what people are saying and to be able to improve customer service.

    It is free and easy to use.

  3. Excellent post, Paul. I have actually been an advocate of CEOs checking customer feedback forms, to be closer to customers, but I should note that this comes with the proviso that they do not act like a prick. Spirit’s loss, however, does not surprise me: the present model of trying to attract poorer and poorer customers may be great for volume and bringing people together, but the flip side is that it is not always sustainable. Bad customer service only makes it worse.

  4. Thanks for the positive feedback Jack. I read an article yesterday about how competitive and low margin the pizza business has become in New Zealand. It seems to me that even if you are selling a 7 buck pizza at break even, that’s a sale that your competitor didn’t make and opens an opportunity to engage with a potential new customer.

    So it does not matter whether the sale is 7 dollars with a discount voucher or a full service $15 delivery with all the toppings – the customer is king and the CEO should be the customer service champion. The airline business is not so different from selling pizzas.

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