Photo: Wikimedia Commons
Southwest Airlines is often used as a case study for a well-run business: it’s consistently more profitable than its competitors, it’s very disciplined about how it operates, it’s customers are happy. It also has a strong brand, built on the promise of low prices, convenience, and a no-frills-but-pleasant experience. But recent actions are starting to erode the brand and customer happiness, potentially creating a long-term risk.Southwest is my favourite airline: low prices, happy staff, lots of flights were I need to go for most trips, good website, convenient policies. What’s not to like? But even for me, some of its recent policy changes have left me scratching my head. Let’s look at what’s going off track.
A major part of Southwest’s brand is simplicity (a key piece of the larger convenience message): Pick your own seat so you don’t have to plan ahead. Check-in online on your smartphone. Everybody is in the same class of seating. Need to swap a ticket for another date or grab an earlier flight? No problem. From an operations standpoint, they use Boeing 737’s for every flight, simplifying training and maintenance.
There are different kinds of simplicity. Southwest is simple in two specific ways in terms of its user experience:
1. It is conceptually simple, meaning that the mental model that it operates by is very easy for passengers to understand. Historically there have been no complex procedures or rules to memorize.
2. It’s also highly predictable, meaning that once you’ve grasped its mental model, you can apply that to every flight, every time. Even for things that are not the ultimate in making your life simple, they are at least extremely consistent.
But lately Southwest has been eroding these principles.
First there was a new check-in process. Once upon a time, Southwest gave out large plastic cards with numbers on them that told people the order they were to board, since the airline doesn’t have assigned seating. This was conceptually extremely simple, but it became a burden after extra security measures were imposed after 9/11. Since then, Southwest has tried a couple of variations of dividing people up into three groups — A, B, or C, depending on how early they check in. Today passengers also get a number within their group and they have to line up at numbered pylons.
The lining up procedure is confusing the first time you do it because it’s so unfamiliar. While it’s an efficient system (assuming everybody gets in their right place) and gives you more predictability than the old method, it’s conceptually complex. The gate staff often have to explain it several times, and they don’t always do it clearly. To add more complexity, Southwest changed it so that family boarding doesn’t happen until after the A’s have boarded, while the norm has always been that families board first.
But people generally get it, it works well, and it’s more pleasant than the old “cattle call.” But the next change that Southwest made has continued to cause a lot of grief: it changed its frequent flyer program, Rapid Rewards.
Their old program was conceptually drop-dead simple. Fly eight round trips and get one free. That was it. The program was also very predictable. Every flight was valued the same, so you knew exactly how far along you were until your next free flight.
This program was of most benefit to Southwest’s customers who did short-haul flights with tickets bought far in advance. It was less beneficial to business travellers who went on longer flights and bought more expensive tickets on short notice, yet received the exact same credit as Joe Vacationer in the next seat who bought his ticket for a quarter the price weeks before.
So Southwest updated the program in March to skew it more favourably to the valuable business travellers it wanted to attract. Now, the more you pay for a ticket the more points you earn, and these accumulate toward free flights. It sounds simple, right? But check out the graphic that was included in an email I got from Southwest (since I’m a Rapid Rewards member) that tries to explain it:
This is not simple. It’s also not predictable because the amount of flights I have to take before I get a free one varies dramatically with how much money I spend. This also flies against Southwest’s radical egalitarianism. What’s next, business class?
The program’s only been in place for a few months, and so far it doesn’t seem to have had an impact on Southwest’s passenger numbers, which are up 6.4% compared to 2010. Maybe the controversy over the program (including getting an earful on the company blog) will die down, and people will decide that on balance Southwest still offers good value.
But Southwest is playing with fire. It is undermining its core values of simplicity, putting at risk the implicit compact it has built over the years with passengers. There are other hungry airlines offering next generation customer experiences (JetBlue, Virgin America) that would love to take passengers from Southwest in a highly commodified, competitive market.
Be careful, Southwest.
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