United Airlines: Securing Customer Loyalty That Money Can’t Buy

It’s not about points or free gifts anymore; it’s about what money can’t buy.

United brand image
(Image via United Airlines)

It’s not about points or free gifts anymore; it’s about what money can’t buy.

This is what Praveen Sharma, VP of loyalty for United Airlines, tells me about what it takes to keep customers loyal to brands in an age where consumers have more power and options than ever before.

MileagePlus, one of the airline industry’s most successful loyalty programs, is built around creating customer experiences — not just free flights, like most frequent flyer programs. According to Sharma, these experiences can include a training day with your favorite pro sports team, or a session in a flight simulator, VIP luxury venues and other experiences that are not for “sale.”

By allowing MileagePlus members to use their points for aspirational experiences that deliver emotional fulfillment vs. just a free airline ticket or upgrade to First Class, United Airlines’ customers remain loyal to a brand, regardless of price. As a result of rewarding customers in unexpected ways, and by allowing members to choose their rewards, MileagePlus is the largest loyalty program in the industry, with more than 100 million members.

So what’s in your loyalty program? Chances are, you’re still offering one free product for every 10 purchased, or points redeemable for a free hotel night, for 10 percent off their next purchase of $200 (not a big deal by the way), and other way-too-common ways for rewarding customers.

Loyalty today is not about price. It’s not about “free” anything. As United Airlines has discovered and proven under Sharma’s leadership and dedication to providing emotional value over monetary value, it’s about the “feelings” you create among the customers you serve. Feelings come from how you are treated, unexpectedly and expectedly.

For example, a friend of mine flies United almost weekly, all over the world for his business. When he had a tight connection at a large airport with terminals far apart, there was a car waiting for him at his gate, ready to take him to the next gate. That kind of attention to individual customers’ issues and acting on imminent needs is what creates brands like United Airlines that last not only for a customers’ lifetime, but for generations of customers over decades of change.

No matter how large or small your brand may be, there are many lessons here for every business for creating loyalty programs that enable your sales, profits and marketing ROI to soar to new heights.

Here’s just a few tips from Sharma and myself:

  • Build an Ecosystem: Build a network of partner brands that reflect your brand’s standards and value, and complement or support your offerings. Align with brands that can provide experiences for your customers beyond your product line, that offer supplemental experiences, services and products, and are as eager as you are to reward each others’ customers with new offerings and ideas.
  • Build Your Data Capabilities for learning and communicating instantly across all channels your customers use: mobile, phone, email, social. Communicate on what matters to customers, not just what matters to you.
  • Use the Rule of Five to send tips, ideas, informational notices, updates on services, products or, in the case of United, changed gates or ETAs. Send five messages about the customer before you send one message about what you have to sell.
  • Create Points of Engagement that enable you to learn. Surveys still work, but so do other tools. Consider creating a loyalty board with a diverse mix of customers to learn firsthand what you need to do to keep loyalty up and growing via evangelism. And insert a one-question survey each week on your website to keep the dialogue and insights flowing.
  • Never Set the Loyalty Trap. Some companies and business models wittingly and unwittingly “trap” customer loyalty with sales models that make it really hard to switch brands. SaaS contracts are an example of how this can happen, because of the upfront time and energy required for most subscription-based services. Once you get clients set up to use your product, trained and “vested” with time and money, it is hard for them to cancel that contract, even though you’ve given them many outs, because they will lose too much time and money to start over. However, these traps, when set intentionally, rarely work. If your onboarding, product functionality, service, support and other aspects do not meet expectations and trigger satisfaction more often than not, customers will make the effort to change and will tell everyone they know to go with them.
  • Reward Loyalty With Experiences, not just product. Consumers define a brand’s value to them by the experience and emotional value delivered more than anything else. Price and customer service can be replicated quickly and easily by just about any competitor. But experiences and feelings of achievement, appreciation, joy and security, not so much. This is why MileagePlus offers experiences of a lifetime that money can’t buy; like the training day with a professional sports team or flight simulator sessions mentioned above.

Takeaway

No matter how big or small your business reach, or how large your customer database is, you can define and deploy strategies and experiences to create loyalty. Think big, think differently, and think about the “emotionally rewarding” value that your brand is uniquely set up to deliver — time and time again.

Note to Airlines: Don’t Follow the Cable Companies’ Lead

There’s no disputing that 2017 has gotten off to a tough start for the airlines. Consumers were already frustrated with seats that seemed inspired by medieval torture devices, proliferating fees, and yield management algorithms that manage to pack the planes to the gills, forcing tense games of seat-rest elbow chicken. Oh, yes, and there was that thing about dragging a doctor off a flight, bloody and unconscious.

Peter Horst is chair of the Fusion Financial Services event later this year. Click here for more details. The event is free to qualified attendees (including travel and lodging) but seats are limited, so apply today!

There’s no disputing that 2017 has gotten off to a tough start for the airlines. Consumers were already frustrated with seats that seemed inspired by medieval torture devices, proliferating fees, and yield management algorithms that manage to pack the planes to the gills, forcing tense games of seat-rest elbow chicken. Oh, yes, and there was that thing about dragging a doctor off a flight, bloody and unconscious.

If people are comparing your airline to he people on "The Walking Dead," a TV show about a zombie apocalypse where the people are even worse than the zombies, you've made some mistakes.
One example of the reaction United received on social media after the incident.

Helping keep temperatures at a boil, social media made it so seamlessly easy to publicize every instance of crabby crew behavior, ticketing injustice, and righteous passenger indignation. Little wonder that an actual riot broke out in the Spirit Air terminal at Ft. Lauderdale’s airport after pilots expressed their displeasure with management by not showing up for work.

A Tone-Deaf Airline Industry Response

In a recent article, I argued that the soul of a brand is really the best prevention against ending up in such a tough spot — building an explicit promise and strong cultural commitment to a set of customer values. But in response to this gloomy atmosphere in their industry, Airlines for America appears to be taking a different tack.

The trade association seems to have brought back a TV ad campaign from last year. It’s an upbeat, peppy piece that stars one of those iconic, yellow-vested guys with the red flashlights and the emphatic directional gestures. With magical red flares in hand, he guides a surprised office-worker from her drab, gray cubicle to a tropical paradise, complete with the requisite flower girl, mai tai boy, and galloping horse on a beach.

The tagline is, “We connect the world”, and it emphasizes all the flights to all the destinations that airlines provide in order to help people get where they want to be.

While it’s a nice enough spot, I think it misses the mark in a few important ways. The first miss is in tone. The cheery focus on the joy of getting away from it all seems a little tin-eared in the context of the meaningful angst surrounding the topic of airline customer experience. If indeed this re-airing of the spot is an attempt to restore some good feeling, the spot risks reinforcing a perception of clueless ignorance of the present feelings of their customers. We’re emotional creatures, and the airlines’ marketing challenge is a deeply emotional one, so hitting the wrong note at this high-pitched moment seems clumsy. Effective empathy requires that marketers show they appreciate their target’s feelings.

A second miss is in the underlying insight. I passionately believe that all great marketing sits on a rigorously true, powerful insight that reveals some aspect of tension within the target’s life. In this respect, I think Airlines for America picked the wrong perch.

I’d bet my house that a core sample of the average air traveler’s brain would not reveal the most relevant insight to be, “Gosh, I just can’t wait for someone to sweep me away from all this!” A less cheerful, but more relevantly true, insight would likely be, “I’ve really come to dread getting on a plane. They just don’t seem to care about me.”

United’s Mistake: It Put the Customer Last

There is a promise that is fundamental to marketing. And that promise is that, if a customer pays you for your product or service, you will deliver that product or service. Here, the airline broke that promise. It broke the promise for selfish reasons and then essentially called in hired goons to deal with the “troublemaker” customer who refused to go along quietly with getting wronged.

This week I’m at the MarketingSherpa Summit, listening to some very smart people talk about how important it is to be a customer-first marketer.

Introducing the keynote, Daniel Burstein, senior director of editorial content, delivered the research insight that gives MarketingSherpa Summit its purpose: The No. 1 complaint of unsatisfied customers is, “The company does not put my needs and wants ahead of its goal.” On the other hand, satisfied customers are three times more likely to say the company does put the customer’s needs and wants before its business goals.

To Burstein and company, this is the No. 1 issue facing marketers today. Customers need to believe you are putting their needs and wants first in order to want to do business with you. And they don’t. In fact, the research Burstein quoted said that 77 percent of American consumers reported they did not see customer-first marketing very often.

“Marketing has moved from being a service-oriented relationship to an adversarial relationship,” said MECLABS Institute Managing Director and Sherpa Summit keynoter Flint McGlaughlin (MarketingSherpa is a part of MECLABS). Consumers think you’re trying to trick them, trying to pull the wool over their eyes, trying to get out of delivering.

At the same time I was listening to that, United was getting roasted by pretty much all of America for doing absolutely everything wrong.

United went full Darth Vader. You never go full Darth Vader.
United went full Vader. You never go full Vader.

Now according to their more recent statement, which contradicts their earlier statement, the flight was not technically overbooked. United just had four crew members that had to be in Louisville for a flight the next day, and they selected four passengers to give up their seats and be “re-accommodated” so there crew could get where they needed to be.

Seldom does life line up so cleanly to illustrate the issues we’re facing.

United Put Its Customers Last

There is a promise that is fundamental to marketing. And that promise is that, if a customer pays you for your product or service, you will deliver that product or service.

Here, the airline broke that promise. It broke the promise for selfish reasons — to get its employees where they needed to be at the expense of their customers — and then essentially called in hired goons to deal with the “troublemaker” customer who refused to go along quietly with getting wronged.

Airlines have overbooked for ages, but they have a tried and true method of dealing with the conflicts that causes: They throw money at it. When overbooking causes an issue, the airline basically bribes customers to give up seats by offering things like vouchers for future flights as an incentive to be rebooked on a later flight.

If you offer enough incentive, that always works. Who isn’t going to give up their seat for, say, $10,000? There is always a price that will ensure you don’t have to forcibly drag your customer off the plane.

Here, something went wrong. Maybe they didn’t make that offer because the flight wasn’t technically overbooked? Maybe they didn’t offer enough? Whatever the reason, the result was that United resorted to bullying instead of buying.

That is not putting your customer first. That is putting your customer last.

And let’s not let the outcome obscure the root issue here. Even before United had security drag a paying, seated passenger off their plane, they were already at a point where they couldn’t get customers to willingly give up their seats and therefore had to pick four at random to give them up.

Can you imagine what that announcement must have sounded like? “Four of you have to give up your seats or else!”? That’s not customer service, that’s cartoon villainy.

If people are comparing your airline to he people on "The Walking Dead," a TV show about a zombie apocalypse where the people are even worse than the zombies, you've made some mistakes.
If people are comparing your airline to the people on “The Walking Dead,” a TV show about a zombie apocalypse where the people are even worse than the zombies, you’ve made some mistakes.

Now, the crux of United’s point of view is they have a policy. That policy is right there when you buy a ticket: They reserve the right to re-accommodate you on a different flight.

You know what? No one cares. A policy like that, no matter how clearly it’s spelled out, is just an excuse. If you’re willing to take people’s money and not give them what they paid for, you at least gotta try to make it right.

Instead of making it right, United made it bloody. And that’s a perception its customers are going to need a long time to forget.