For enterprise executives, conversations about digital strategy, DevOps, automation and machine learning come down to one question: “What’s the end game?”
These innovations should lead to leaner organizations that deliver higher-quality products with a focus on predictive analytics. Which is to say they should lead to a better experience for customers. If they don’t, then the rush to automate is nothing more than a cost play. And if cutting costs comes at the expense of customer service, what happens to the business?
Take the airline industry in the U.S. It has been through bankruptcies, re-orgs and mergers, and it has “unburdened” itself from the past by repopulating its executive and management layers. The airlines have cut costs relentlessly and are slimming down their organizations. As proof, airlines are profitable and, in 2017, carried an all-time high number of passengers systemwide. Load factors on domestic airlines in the U.S. are in the mid-80s – another healthy number. And revenue passenger miles and available seat miles are at all-time highs as well. Airlines have invested in new technologies to create a digital fabric – and they are reaping temporary benefits.
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However – and this is alarming given the above numbers – passenger dissatisfaction with the “product” has reached a new high. The customer experience is abysmal. From reservation agents to gate agents and the onboard experience, airlines have raced to the bottom on customer satisfaction indices. If you are like me, you’ve flown hundreds of thousand miles and hated the experience. Worse, you probably don’t expect better.
In the not-too-distant past, customer service at the gate and onboard was exemplary. Airplanes did not yet have on-demand entertainment systems, but the seats were comfortable, and there was legroom as far back as the last row. Flights longer than two hours served meals. If you flew first or business class, you were served a cocktail and a near-gourmet meal. Gone are those days. The decline started in the 1990s with removing the garnish on the shrimp cocktails in first class. Removing those few sprigs of cilantro saved the industry $700,000 a year.
That started an avalanche of other cost-saving measures that airlines hoped passengers wouldn’t notice. The 2017 Air Travel Consumer Report, compiling air-carrier data, reported a 35.2 percent increase in passenger complaints with in-flight service, suggesting passengers are running out of patience with the airlines. Passengers know they are being taken for granted.
Airlines have started addressing technology debt by upgrading their legacy systems, capturing customer journey data and making the purchase of tickets easier. But airline profitability has not translated to better customer service. Passengers are lucky to be offered a “welcome aboard.” Coach seats are too small for anyone overweight or taller than 6’2”. What started with removing the garnish from first-class appetizers has devolved into a state in which everything is considered an ancillary service worthy of monetization.
But it doesn’t have to be that way. Consider Singapore Airlines, which has developed a tremendous customer service culture. Its mission statement reads: “Singapore Airlines is a global company dedicated to providing air transportation services of the highest quality and to maximizing returns for the benefit of its shareholders and employees.” Compare that to a leading U.S. carrier’s mission statement: “We — ’s employees, customers and community partners — together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work.”
Generic to the point of being meaningless, this statement includes not a word about what its business does for its customers. While many U.S. carriers find ways to mimic ultra-low-cost competitors, Singapore Airlines considers every major issue, question or decision in light of its commitment to providing the highest quality of customer service. This in turn has allowed it to be profitable as revenues continue to grow and win coveted accolades such as best airline in Asia and one of the top three airlines in the world.
Why do we invest in technology, innovation and modernization? To address technical debt and reduce costs in the short term, yes, but paying attention to customer service will be the key to long-term success and customer loyalty.