Here’s how Qantas can win back customers
How would you feel if you were the Qantas CEO and people were telling you loudly that they loved Virgin Australia as you were walking through the airport? For some, Alan Joyce is a hero for taking on the unions, but for others he is a person who should hear firsthand the distress suffered by those Qantas passengers stranded during the shutdown he ordered.
Sadly, the debate for many has become centred on a particular individual. The CEO of a company should command wide ranging respect from all the company’s stakeholders. It’s certainly not enough to be loved by your management peers at other companies. They’re only good for giving you a new job if you leave the old one because you have lost the moral authority to succeed in your current position.
History will judge Alan Joyce as a CEO, but in the meantime Qantas management must stand collectively in being fully accountable for their recent decisions and for presenting a vision to get Qantas back on track as the great iconic company that it has been.
Many have been loyal to Qantas for years. Many have paid a heavy price to join the Qantas Club and to pay the higher airfares Qantas charged as compared to its competitors. These people wanted to fly Qantas because Qantas offered safety, reassurance and an Aussie pilot and crew. Having been in foreign lands these loyal passengers wanted to see the flying kangaroo on the tail of a Qantas plane.
If they had wanted a foreign pilot and crew they had ample other airlines to fly on and they could have saved money doing so. But no, these loyal Qantas passengers stayed loyal to a `feel good’ factor that lies at the heart of customer `goodwill.’ This is `goodwill’ in the business sense of the customer returning to Qantas.
Strip away that `feel good’ factor and you slowly strip away `goodwill’ in the sense of passengers drifting away. Dangerously for Qantas this feel good factor has been slipping away for years.
The harsh reality is that problems at Qantas are deep seated and go beyond the power of the unions. The unions have always been there but different CEOs have taken different approaches.
The problem at Qantas is quite simply that passengers have been leaving Qantas for years. Qantas has been taking customers for granted for far too long. In a highly concentrated domestic airline industry Qantas has been able to fudge it a bit given its dominant domestic position. Qantas was largely shielded from overseas competition on domestic routes and so could get away with cutting service levels domestically.
We shouldn’t forget that a fundamental economic reality is that a lack of real competition generally makes the dominant players complacent or perhaps even arrogant. Telstra, major shopping centre landlords, the oil companies, the major supermarket chains, and the four big banks are just some examples.
For Qantas trying to fudge it domestically was only ever going to be a temporary measure. While its domestic dominance shielded Qantas to some degree from the onslaught of the cut throat international airline industry, it was only a matter of time before those other airlines made headway against Qantas.
Those other airlines started to offer `feel good’ things that Qantas used to offer. Airlines like Singapore Airlines, Etihad, and Emirates starting getting good at offering first-rate service at a cheaper price.
For some the service on these airlines may have even been better than that offered by Qantas. Those airlines also become very good at establishing a strong brand in Australia. We now have the Emirates Melbourne Cup and Etihad Stadium.
If you are frequent flyer with those other airlines you might be surprised to get a free and spontaneous upgrade to business class while at the airport. If you pay for a business class airfare on those airlines you are likely to get a limousine pick up from your home.
These are just small gestures and may only cost a token amount, but they build `goodwill.’ People will come back to those airlines because they are made to `feel good’ by the particular airline. Virgin has long prospered on the ‘feel good’ factor on its airlines around the world.
You have to wonder how many times Qantas has given free business class upgrades at the airport with a smile. There would be many Qantas frequent flyers that have never been given a free business class upgrade on an international flight. Unless, of course, you’re a politician. Politicians seem to have much better luck at getting those `free’ business and first class upgrades.
The message for Qantas management is simple. There’s an urgent need to put the customer back into customer service. Be customer focused and make customers feel good about flying Qantas. Give customers a surprise from time to time. If you have empty business class seating on an international flight, then give some frequent flyers a treat and upgrade them. They will no doubt tell their friends about the upgrade.
By all means manage your costs, but don’t take your eye off customer service levels. Have your tussles with the unions, but don’t lower your customer service levels. The customer is the person who ultimately pays the management’s salary and if customers continue to drift away no one will be getting a salary at Qantas.
Reconnect with your customers by making them feel good. It certainly didn’t help when you left them stranded during the management imposed shut down and told them that you had no choice but to keep them away from their home, family and jobs.
Go down and mingle with your customers at the airport check-in. Go listen to their stories. Let customers feel they are being listened to by Qantas, otherwise you will find that other airlines start doing the listening for you.
Tell your customers that you won’t collect your recently approved management pay rises at this stage. You can say that you’re flattered that the Board wanted to give you a pay rise, but you must decline it at this time because you want to share in the belt tightening you want the workers to undertake.
Finally, have regular open days at each major domestic airport where 500 lucky Qantas frequent flyers (non-politicians, of course) get free access to the Chairman’s Lounge for a particular timeslot on a weekend and are given a guided tour of a new A380 airplane. People are still in awe of the A380.
Above all, never stop trying to make customers feel good about Qantas!
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