“As of substitute goods affect customer experience. Customers

“As goods
and services become commoditized, the customer experiences that companies
create will matter the most.” Pine and Gilmore claimed this two decades back
and they were absolutely correct in their view. Going by the recent trends that
we are seeing, for any product and for any company selling it, the overall
experience that the customer goes through while buying and using the product or
service matters more than the product itself. It is often seen that companies
offering flexible buying options like EMIs have greater sales figures than
their competitors who maybe selling better quality products. The buying and
selling trends are changing towards expecting and offering a solid customer
experience respectively.

“Today the
concept of selling experiences is spreading beyond theatres and theme parks.”
This statement by Pine and Gilmore is very accurate. In the current world,
buying a good or a service is an experience in itself. From the way you are
treated by the people selling the goods or providing services, to the after
sales services, and even the prices of substitute goods affect customer
experience. Customers have become very choose of everything and want
satisfaction which goes beyond the product. Customer experience is no longer
just what the customer sees or uses but it is the feeling that the customer has
during and after making a purchase.

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The
customer’s experience has become a very critical issue for companies now, with
the advent of social media and e-commerce. Almost seller has already, or wants
to enter the online buying and selling industry. There are few e-commerce
giants like EBay and Amazon, which are online marketplaces. These websites let
customers review their purchases. The reviews are influenced by many things-
the price, delivery options, product quality and so on. Now, these reviews play
a very important role as potential customers refer to them. Products having
better reviews have higher chances of getting sold.

The advent
of social media has made situations more delicate for companies. People are
quick to put up their experiences on Twitter and Facebook. Be it for a cab ride
they take or for food they eat. Some of these go viral and ‘trend on social
media.’ The rise in the number of bloggers and their followers also influence
customer views. Today, there are bloggers for almost everything- food, fashion,
and automobiles to name a few. It has been seen that the followers show a lot
of faith on the views and tastes of these bloggers. A few companies also use
this as a marketing strategy. They pay good sums of money to bloggers to write
good reviews about their products.

In this
scenario, it has become utmost important for companies to be very careful of
whatever they do. A small instance of bad customer experience may potentially
come in the way of goodwill, which for any company is very important.

 

 

To explain
the importance of customer experience and the repercussions of unhappy
customers, let’s cite the example of United Airlines.

United
Airlines is the fourth largest airline in the United States Of America with a
market share of 14.5 percentage in the domestic airline market. Its main
competitors in the US domestic airline market are Southwest Airlines, American
airlines and Delta Airlines. United Airlines, headquartered in Chicago,
Illinois is one of the largest airline companies in the world. Out of nine
airline hubs united airlines currently operates mainly in Chicago, Denver,
Newark, San Francisco and Houston and others being Guam, Los Angeles, Tokyo and
Washington D.C. United airlines has its largest maintenance facility at San
Francisco International airport. O’Hare international airport of Chicago is
United’s largest hub with some 9.7 million passengers constituting the total
amount of passenger traffic in 2016. In the same fiscal year of 2016 the number
of passengers boarded by the united airlines amounted to more than 143 million
revenue passengers. United airlines and its regional branch airline, united
express operates 4500 flights a day to 338 airports across five continents
approximately. United airlines is a founder member of the world’s largest
airline alliance, Star Alliance which provides service to more than 190
countries through its 28 member airlines. The revenue of united airlines in
2016 was 36.56 billion USD with a net profit of 2.9 billion USD. United
airlines operate with a fleet of 737 aircrafts and the company’s united express
operates with a fleet of 494 domestic airplanes. United airlines employ around
88000 employees around the world.

Being such
a big player in the market, it is very important for United Airlines to be very
alert the way they treat their customers. There, however, have been instances
of unruly behaviour on the part of United Airlines. United Airlines is infamous
for many instances of over-booking. They book more passengers onto their
flights than the number they can accommodate. They, thus have to refuse
services to their customers after they have boarded the flights. Not just this,
recent reports state that one passenger had been dragged out of an aircraft,
physically injuring him in the process.

The
incident occurred at the Chicago airport on April 9, 2017. In a case of
overbooking, Dr. Dao, who was 69 years old at that time, was asked to leave the
aircraft, with a mere compensation of 800 USD to accommodate four crew members.

When Dr. Dao refused to get off, despite the offered compensation, the crew
called the airline security and Dao was literally dragged out of the aircraft.

His face hit an armrest and he suffered a concussion, broken sinuses, a broken
nose and also lost two of his front teeth. Obviously, it did not take much time
for this incident to go viral on the social media. United Airlines had become
the subject of excessive and harsh criticism from people all around the world.

This proved to be a public relations disaster for the Airline. United Airlines’
CEO, Mr. Oscar Munoz was initially very non-apologetic and indifferent about
the instance but as the public opinions were growing stronger, he had to issue
a public apology to Dr. Dao.  In this
matter, the mass public opinion was that the apology and compensation by United
Airlines to Dao was because of the public outrage.

The matter
was settled after a lasting legal dispute and an undisclosed amount given to
Dr. Dao as a settlement. This incident however, lead to United Airlines
changing their policies. The compensation offered to passengers for leaving a
flight before departure was upraised to ten thousand USD from the original
eight hundred.

In another
case, a United Airlines’ passenger, Mr. Oza was threatened by an agent of the
airline that his reservation would be cancelled because he was recording a
dispute on his mobile phone. The dispute was regarding an oversized bag and Oza
was recording it on his phone. This incident also proved to be a disaster for
the goodwill of the airline.

Similar
incidents have been seen with other airlines as well. A recent video showed
that a passenger had been physically assaulted by the staff of Indigo Airlines
at the Indira Gandhi International Airport, New Delhi. So the incident with
United Airlines is not unique to the aviation industry but it also does not
mean that it is acceptable.

 

However,
one statement by Pine and Gilmore in the same paper “If airlines truly sold
experiences, more passengers would actually shop in the seat-pocket catalogues
for mementos of their flight,” according to me is not very accurate. Their
statement is justified when we look at it from a particular point of view but
if we adopt a broader marketing thought process, then airlines do truly sell
experiences. As discussed above, customer experience is affected by the entire
process of the purchase. Airlines sell experiences from the moment a flier
purchases a ticket. From providing mobile applications for easier web check-ins
to the way they are treated by airline staff during check-ins to boarding and
most importantly how they are treated by the in-flight crew. Airlines that take
an extra step towards helping the aged and disabled passengers earn more
respect.  Airlines that keep limited
counters open during the rush are less preferred by fliers because waiting
times are higher. Airlines that are infamous for not being on time or excessive
cancellations provide a worse customer experience.

Moreover, a
regularly good customer experience always provides a very strong marketing
opportunity to not just the companies in the aviation industry but any company
in any industry. Good marketing, combined with good customer experience is a
very strong success mantra for any company.