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Avoiding High Flying Business Mistakes

24 Apr 2011 |

At the time Ansett Airlines collapsed I wrote an article about what small-business owners could learn, on how not to do business, from the big airlines. From recent experiences airlines still provide many examples of how not to run a business.

Not wanting to appear totally negative there are some lessons airlines can teach us on how a business. There is a very good book called “Moments of truth” written by Jan Carlzon the former CEO of Scandinavian Airlines System.

At the time of taking over control in 1981 SAS was losing $17 million a year. Carlzon, through a single minded focus on delivering excellent customer service, turned the ailing airline around to where it was not only making a profit but in 1983 it was named Airline of the year. The examples of how not to run a business from these other airlines are also about customer service.

A bit over 12 months ago a family member flew with Tiger Airlines to Sydney. Being the designated driver, and aware of Tiger’s strict check-in deadline of at least 45 minutes before the scheduled departure time, I made sure we arrived in plenty of time. I had heard horror stories of people arriving to check-in 5 to 10 minutes late and not being allowed to board and forced to pay for another flight.

By the time we had navigated our way through the long queue and checked in it was 50 minutes before the scheduled take off time. It was then that an announcement came over the PA system that the flight was delayed for an hour.

Not long after the announcement a couple tried to check in for the flight after the 45 minute deadline had expired. Despite the fact that the flight would not now be leaving for more than an hour and a half the couple were told that, as they had missed the deadline, they could not board this flight and would have to book another ticket.

This slavish following of regulations is one of the best examples I have come across of how not to treat a customer. This showed that Tiger was not focused on the quality of the customer service, but was more focused on treating their customers with contempt.

The other example comes from Qantas and it’s so called customer loyalty rewards program. These programs are meant to strengthen the bond between a business and their customers by showing they are appreciated. Since Qantas started Jetstar the message delivered to its frequent flyer customers is often the opposite.

As most people know Jetstar is a budget airline where you just about have to pay for everything. Qantas over the years has stopped flying some routes and now has Jetstar flying them. This means when a Qantas frequent flyer books a flight on a route only serviced by Jetstar it costs them the same number of hard earned frequent flyer points, but they receive a lesser standard of service than if they had flown on Qantas.

Small-business owners cannot afford to treat their customers in the same way. One of the main reasons people change suppliers is because of perceived indifference. In other words the customer gets the feeling that the supplier does not appreciate their business.

If you want to succeed in business you must focus on delivering excellent customer service, don’t tie your employees up in rules and regulations that send the wrong message to your customers, and if you have a customer loyalty program make sure it actually delivers a consistent benefit rather than sending the wrong message.

Questions on small business tax or other issues can be emailed to business@taxbiz.com.au

Tax for small business, a survival guide, by Max Newnham is available in bookstores.

 

 

 


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