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5 missed opportunities to identify high value Customers – Virgin Atlantic case study

18th Dec 2012
Founder & CEO Beyond Philosophy
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I fly a lot. I have Diamond status on the Delta airlines loyalty scheme, the highest you can get. I really fly a lot! On my briefcase and all my bags I have the Delta Diamond tags. This is like wearing a beacon that says ‘this guy flies a lot’!

My question is, “When I fly with other airlines, do they ignore this display that says I am a high value Customer and could be one of your best customers?” It seems that my badge has the cloak of invisibility as everyone ignores it. Why?

Back in my past career, when I used to run call centers, I remember saying, “Wouldn’t it be great if we knew how much potential revenue the caller could spend with us”. The reality was if I knew someone could spend $1m dollars I would treat them differently to someone that could only spend $10. Airlines seem to ignore this in the choices they make when designing their Customer Experience. This is a lost opportunity.

Let me give you five examples from a recent experience with Virgin Atlantic on how they are missing these opportunities:

Missed opportunity 1:

I used to be the highest status (gold) with Virgin Atlantic. I am still a member of their loyalty scheme, so they have my history. I switched to Delta as our office is in Atlanta, but they don’t know that. All Virgin Atlantic may have seen is that I stopped flying with them. Did I get a call from Virgin Atlantic when they noticed my number of flights with them declined? No. It gets worse. They don’t even seem interested in Customer loyalty.

Missed opportunity 2:

My wife, Lorraine, and I were travelling back to England for the Christmas break. We were travelling via Virgin Atlantic for the first time in a while. I was quite looking forward to this and prior to the flight I was thinking that maybe I should switch back to them. The missed opportunity was that they could have seen that I used to be gold status, 5 years ago, and do something to encourage me back. For example; they could have offered me fast track check in. How much would that have cost? But nothing happened.

Missed opportunity 3:

On checking my bags in, I was surprised when they asked to weigh my hand luggage! I don’t know if you have got the message yet but I fly a lot! Every flight I go on I take my roller board and my business bag. “Not on Virgin Atlantic”, I was told. They now weigh hand luggage. My suitcases were at the right weight. They weighed my carry-on bags and they were overweight! I explained I hadn’t realised there was a weight restriction on hand luggage. We now had the problem of trying to put the weight from my hand luggage into our already full cases. We spent the next ten minutes shuffling our belongings around trying to balance the cases in the full view of all the other passengers which was somewhat embarrassing! In the end one bag was still overweight.

I explained my dilemma. I had expected for Virgin Atlantic to be the same as every other airline. In desperation I showed my ‘Delta Diamond badge’ that indicates I am a high value customer with another airline, firstly to show them it was a genuine mistake, also to show them that I knew what I was talking about and imply I was a potentially good customer. I had expected them to say “Ok, Mr Shaw, we’ll let you off this time”, as they could see the potential business. But no, I ended up having to pay $48 to put the overweight bag in the hold.

Most interesting of all is what happened next. In the confusion of shuffling our bags we managed to lose my wife’s expensive headphones.

Missed opportunity 4:

Regular readers will know I often use the phrase ‘Customers are irrational’. By saying this I am trying to encapsulate the fact that Customers are not logical machines but emotional animals. Lorraine and I were so annoyed with the way we were being treated; our feelings were that it was Virgin Atlantic’s fault that we had lost the headphones.

In the cold light of day it is clearly not their fault. Virgin didn’t lose the headphones, we did. But that is my head talking. As humans we also have hearts. My heart says ‘if we didn’t have to go through all that fuss we wouldn’t have lost the headphones’. My heart says ‘it’s their fault’. We reported the loss prior to boarding. They couldn’t care less. I had hoped for at least some sympathy.

Missed opportunity 5:

On the flight nothing happened. Despite my ‘high value Customer badge’ on my cases which would have been seen by the cabin crew no-one came up to my seat and said, ‘great to have you back Mr. Shaw’. Nothing.

How much would all of this cost to implement? Hardly anything. I am genuinely saddened by this experience. My heart says, “I used to really like you Virgin Atlantic, we had a relationship, I know I left you but I could have come back and was giving you a chance, but instead you slammed the door in my face”.

Let me be very clear, this is an emotive response but Customers are irrational. Customers are not logical, they are irrational.

It seems I am not the only one. This recent Economist article, shows Virgin Atlantic are ‘stuck in a rut’ and have lost $128m. Clearly they intend to get some of this back by weighing people’s hand luggage… (Sorry couldn’t resist the dig, those emotions again!).

So all in all does my head or my heart win when it comes to booking my next flight? My heart – its back to Delta for us, despite the fact Delta just brought 49% of Virgin Atlantic ….Virgin gained $48 and lost a potential high value Customer.

Sometimes you don’t realise what you are missing until it’s gone…

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By Adriana Santos
10th Jan 2013 10:53

-- My partner has a Gold status with KLM/Air France (Platinum is the highest) as he also travels a lot. But whenever he flies with other airline companies, this important detail seems irrelevant! I do agree with you that some companies are seriously missing out and in my opinion they should make some effort to find out what the other companies are doing differently in order to treat these customers at least equally well and gain their respect. After all, we are in a competitive world, and customers can easily make their voice heard as you just did about Virgin Atlantic.

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Colin Shaw
By Colin Shaw
15th Jan 2013 21:43

 Unfortunatley this seems to be common practice....I don't see any airline doing this well!

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