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Southwest airlines1/8/2023 ![]() That’s because travel credit questions are the “number one call driver” to Southwest’s customer-relations department, according to Andrew Watterson, the airline’s Chief Commercial Officer. But what’s interesting is that they’re also expecting significant cost savings. Southwest is no doubt expecting a revenue bump from its latest customer experience coup, as passengers gravitate to a carrier offering industry-leading ticketing flexibility. For example, a few years after baggage fees became commonplace, Southwest’s research indicated that the airline had actually gained $1 billion in revenue by allowing bags to continue to fly free (due to increased market share, fueled by the customer-friendly policy). That revenue impact is far from theoretical. After all, an improved customer experience means better customer retention, greater wallet share, and more referrals – all drivers of additional revenue. When business leaders think about the ROI of customer experience differentiation, they often fixate on the revenue line. In today’s environment, the flexibility to adjust one’s travel plans, and have complete latitude in rescheduling, is a product feature that has enormous relevance to travelers, and it’s something they’ll surely take into consideration when choosing an airline. As Southwest CEO Bob Jordan put it on an earnings call: “Our customers are telling us that peace of mind around the ability to change is really, really important.” Once the pandemic hit, Southwest (and other major airlines) did reexamine what was relevant to their customers – and it was the resulting insights that drove, among other things, the suspension of travel credit expirations.īut what Southwest has realized, perhaps sooner than its competitors, is that in a Covid-19 world, flexibility is king. And once you pinpoint that, then you can work backwards to engineer products and services that perfectly address your customers’ rational and emotional needs. Understanding that goal is key to fostering customer experience innovation, because it enables you to think broadly about what’s truly relevant to your customer. Your business’s offerings are but components contributing to some larger goal that your customer is trying to achieve. What do your customers really care about? News flash: It’s most likely not the product or service you sell. It’ll make your business a hero in the eyes of customers and prospects alike. Think about the industry-standard irritants that plague your marketplace, and go on a crusade to eliminate them. That’s precisely what Southwest has done over and over again – when it refused to charge baggage fees, when it committed to “ Transfarency” in ticket pricing, and now, when it took the frustration of travel credit expirations off the table.
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