Is Southwest disconnected from their customers?
Are we really asking this question of the airline who’s brand and reputation was built around doing the right thing for your customers?
Unless you’ve been living under a rock, or maybe you’re just don’t pay attention to the travel industry like I do, Southwest Airlines has made some very shocking changes to their business model in the last several months. And while we can point the majority of our metaphorical fingers at the hostile shareholder private equity firm Elliott Investment Management, the response here from Southwest’s CEO is quite concerning.
First off, businesses spend a lot of time thinking about what makes them stand out amongst their competition. Their strengths. Those are the things you market, sell and communicate to your customers as much as you can, showing why they should pick you over your competition. Southwest had this in their bags fly free option along with a few other options.
In the article above, Southwest CEO Bob Jordan mentions:
“…and number two, there is low risk because we're putting in things that the industry has done forever. So there's low risk implementation, there's low risk in the financial benefit paying-off.”
In my opinion, Jordan is saying two things here…One, getting rid of our bags fly free benefit is not a big deal. Two, we’re hoping the financial shift of charging for bags will make up for the loss of loyal customers. Obviously, only time will tell how this plays out but let’s think about how this feels to your loyal customer base. Betrayed? Lied to? Undervalued? Ignored? Unimportant?
Southwest hopes people will stick with them, a low-cost airline that is hardly “low-cost” anymore, because of their history of customer service. People tend to like what they like and from my experience, Southwest loyalists specifically picked them because of what they offered like open seating, 2 free checked bags, low fares and catering to the casual traveler. How many of those are now gone? Literally all of them, except maybe the casual traveler, but I wonder who that is now.
Jordan also mentions:
“What I'm telling you is rather than be forever vulnerable, we're going to follow the consumer and what the consumer needs.”
This isn’t about following the consumer and improving upon what it is they’re looking for. It’s about money, period. Airlines have struggled, especially lately, but let’s not hide behind the age old argument that changes are being made because customers want it, they’re making the changes because their business NEEDS it. Period.
So is Southwest disconnected from their customers? I think so, because their focus has shifted from customer service, loyalty and building a well known brand. They need to generate more revenue, they need to turn better profits, and sadly…they need to make shareholders, especially Elliott, happy. And while your gate agents, call reps, or flight attendants may still provide excellent customer service, I don’t think anything done from a business standpoint from here on out will be because of the customer, it’ll be because of the things I mentioned above. The heart hath broken.