A Lesson in How to Mistreat Your Best Customers
By Steve Rivkin
A merger is a chance to wrap your arms around your best customers. Or not. Which is why this is a warning tale from the customer service aisle.
If you fly as much as I do, you’ve probably been watching the integration of Continental into United Airlines. How will they handle their high-mileage frequent travelers? Will the elite service lines still have elite service?
Now, US Airways and American Airlines are in a courtship dance.
Which takes me back to 2001, when that same American Airlines was taking over Trans World Airlines (TWA).
TWA was once among the largest domestic airlines, with a significant European and Middle Eastern operation as well.
I got quite cozy with TWA back then, because I was flying TWA twice a month from LaGuardia to St. Louis, one of their major hubs, and using them for other routes as well. I joined TWA’s airport lounges, known as the Ambassadors Club. In fact, I became a lifetime member – a one-time purchase that few such clubs offer today.
Then came the takeover. Naively, I imagined that “lifetime” referred to my lifetime – not the airline’s.
Now imagine you’re in charge of integrating operations at the two airlines. How would you have handled the “lifetime members” of TWA’s airport club – all frequent flyers with large mileage accounts?
Here’s what American decided. I got a letter (this was pre-email days) thanking me for my loyal support and accumulated miles with TWA, and telling me that post-acquisition, in consideration of my lifetime status with TWA’s club, American was pleased to offer me …. ta-da! … one-year of free membership in their Admirals Club and thereafter an annual renewal at the lowest rate then available.
One year. (Would that have been your choice, dear marketer?) How much would it have cost American to match my TWA status, or at least grant a multi-year pass?
I wrote back, observing that their stingy policy might be considered a poor way to treat good customers. No response. I wrote again, up to their EVP-Marketing. Still no response, not even a form letter. (This was becoming a textbook chapter in poor customer relations.)
So I did what any red-blooded, empowered consumer might do. I decided right then never to fly American again, unless there was no other choice in booking travel. It was surprisingly easy, since there are almost always choices for almost every domestic route (Continental, United, Delta, etc.).
Twelve years have gone by. My self-imposed boycott remains in place. My American frequent flyer account remains dormant. But my lifetime mileage with the now-combined United/Continental is approaching 1.5 million miles.
A quick calculation shows that over the years, I have directed at least $150,000 in ticketing away from American. Probably a lot more.
Was that a good tradeoff for them?
Here’s the takeaway.
Always consider your best customers, especially in a time of merger or any major new business strategy. You don’t have to kill us with service. You don’t have to turn us into raving fans. But you do have to think with something other than an accountant’s pencil.