Customer-Value Marketing Critical as Airline Executives Lose Focus


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Given the turmoil in Indian aviation sector, read the issues raised below for American Airlines and Customer Value

Marketing Expert, Charles Gaudet, Says the Airline Executives misguided strategies offer a good lesson for business owners who want to grow their business.

As American Airlines and US Airways take steps toward a merger, the companies are looking at creating the nation’s largest airline. Partially an effort to save jobs and rescue American Airlines from bankruptcy, the two airline giants are also positioning themselves to better compete better. Marketing expert,

Charles Gaudet believes that the merger will only provide temporary financial relief unless these airline executives shift their focus from profit to Customer Value.

Gaudet says, “Many corporate executives operate their business under the popular (and misguided) notion that ‘the purpose of business is to increase shareholders value’ – therefore the focus is on shareholders – instead of ‘the purpose of business is to increase Customer Value’ – the latter results in great profit. In fact, your profit is in direct proportion to Customer Value.”

Gaudet argues that a focus on customer relationships, like those being damaged by the airlines stripping away customer benefits, baggage charges and inflexible policies can make or break any business, large or small. As a part of his

Predictable Profits Methodology, he provides business owners with framework for successfully creating a customer focused marketing philosophy

As such, Gaudet suggests the following questions for airline executives to consider in order to build a more customer-focused business:

  • What does your ideal customer expect from a good flying experience?
  • What are more ways can we create a good customer experience for our passengers?
  • What ways can we make the reservation process easier, more convenient, and enjoyable?
  • What process, information, and training needs to be in place for our pilots, airline attendants, and employees tomake sure an enjoyable customer experience is the number one priority?
  • How can we make our customers feel special, valued, and appreciated?
  • What methods are in place to communicate with our customers and make sure that their needs are being addressed?

There are more questions to ask and even more to answer.

I think that many airlines cannot differentiate themselves. Their service is uniformly patchy, not uniform or consistent. You can have a great experience or a lousy experience from the same airline.

Airlines can really differentiate themselves, or have a chance to, especially during a crisis for the customer (I am going to miss my connecting flight, or my bags have not come) or a crisis for the airline (our incoming flight is late, our plane has a technical problem, we have canceled a flight). But they do not. They are so hung up on the process (this is the way we do things, the forms have to be filled out) or they have outsourced the service to a third party who could care less for the customer than for filling out forms. They treat you like cattle often.

There are exceptions where airlines have created value

I am going to give you two examples of crisis handling from my own experience. A few years ago I was flying in India from Vadodara to Delhi via Ahmedabad. The flight came late into Vadodara. Then there was a problem, the airport was about to close down for the night. A little negotiation allowed the flight to leave for Ahmedabad. Ay Ahmedabad, the new passengers from Ahmedabad boarded a little late, and then the Captain announced  the crew had already flown more than the maximum hours they are allowed to fly, and the flight was aborted around 1 a.m. in the morning! There was no other crew available at Ahmedabad, and here we were stuck in the middle of the night.

This was an Indian Airlines flight (a government company) known for stodgy service. There was one ground staff person, trying to calm down the milling customers. Somehow, he managed to get all of us into buses and into hotels. We were told that Indian Airlines had no crew on the ground in Ahmedabad, and a plane would arrive to pick us up from Delhi at 11a.m. Which is what happened. In spite of the delay the great handling under crisis, earned the airline our respect. They had created value in a crisis

Yet another example. Indian Airlines was considered poor in service versus  Jet and other competitors, who operated from a different terminal in Mumbai airport from the Indian Airlines terminal. One day I arrived in pouring rain at Mumbai airport, and boarded my plane that then sat two hours on the runaway and then was brought back to the terminal. It was 5pm, the airport was closed and there was chaos. More and more people arrived at the airport. Many from the private airlines terminal. The so called better service staff had all disappeared to find a way to get home. The only ground staff that did not leave was the Indian Airlines staff.

This crisis lasted two days because of incessant rains and runway flooding.

At the Indian Airlines terminal, the entire ground staff was there. They got supplies of biscuits and snacks and bottled water, which they handed out free to people in the terminal, whether their customers or Jet’s customers. Around 9:00 p.m. they arranged buses to take us to an airport hotel for dinner. There were no rooms and so we were transported back to the Indian Airline terminal. We were well taken care of. The ground staff remained in the airport for the two days doing the best they could. Many did not know what was happening at home. Some of their homes were flooded.

Talk about adding Value! I wrote an article that appeared in the Indian newspapers, which I sent along with a letter to the CEO congratulating his staff. I got no response! That is where the customer culture did not exist, at the top. It is a shame, because they lose chances to Create Value and also to be able to Create Value on a consistent basis

Your comments are welcome!                  

Republished with author's permission from original post.

Gautam Mahajan
Gautam Mahajan, President of Customer Value Foundation is the leading global leader in Customer Value Management. Mr Mahajan worked for a Fortune 50 company in the USA for 17 years and had hand-on experience in consulting, training of leaders, professionals, managers and CEOs from numerous MNCs and local conglomerates like Tata, Birla and Godrej groups. He is also the author of widely acclaimed books "Customer Value Investment: Formula for Sustained Business Success" and "Total Customer Value Management: Transforming Business Thinking." He is Founder Editor of the Journal of Creating Value ( and runs the global conference on Creating Value (


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