Does Customer Service Matter?

If you own or work for a company, you should feel pretty good when there is a business paradigm named for your company. It seems that folks who fly in and out of La Guardia airport in New York are anxiously or nervously depending on their viewpoint awaiting the "Southwest Effect". The "Southwest Effect" is what happens to airfares and air travel patterns when Southwest Airlines starts service at an airport in your area.


Southwest Airlines started in business in 1971, flying from Dallas to Houston and back. In its early days Southwest was mostly seen as an insignificant small business in a sea of much larger and better known competitors. A niche player if you will. One of those big competitors was another Dallas based airline Braniff International Airways. In Dallas, Braniff installed change machines near its gates. When you fed a dollar bill into the change machine, you received $0.95 back. (I mean they had to pay for the change machines somehow.) Southwest immediately installed change machines near its gates. When you put $1.00 into Southwest’s machine, you got $1.05 back! Southwest sent out press releases to announce its new change machines and gained a ton of free publicity and endeared itself to a lot of customers, both Southwest’s and Braniff’s customers.

You probably know that today Southwest is one of the best known domestic carriers in the US. Braniff on the other hand, after two failed attempts to come out of bankruptcy has not been in operations for over 15 years.

Southwest flies over 83 million passengers a year to 63 different cities across the US making approximately 3,300 flights each day and yet has the lowest number of customer complaints of any airline according to the Air Travel Consumer Report. In May of 1988, Southwest was the first airline ever to have the Best On-time Record, Best Baggage Handling, and Fewest Customer Complaints of any airline for that month. The so called “Triple Crown” of the airline industry. In fact, they have accomplished that same feat over 30 times since and in 1992 they did it for the entire year! Customer service has always been a key part of every employee’s job at Southwest. Southwest baggage handlers will gladly tell you stories about former company chairman, Herb Kelleher stepping in to help load bags onto planes, so they get off on time and with all the correct baggage. It is part of the customer focus at Southwest to give the customer more than what they paid for or maybe more than they should expect. 105% return.

Of course giving such a high level of customer service, returning $1.05 worth of value back to the customer is an expensive way to do business, right? After all Southwest is know as a “low cost carrier” meaning that they typically have lower fares and thus lower potential revenue per flight. So where has all that customer focus got Southwest? Well they are not the largest, nor the oldest and some would argue not even the best at what they do, but they are the most profitable airline company in the world.

You may have also read articles in 2007 about how Southwest was having to re-evaluate some of its long held strategies. They have had a successful model for a number of years, but no market ever stands still. Also, Southwest seems to have lost some of its sense of fun and focus on customer service. They asked a college coed, Kyla Ebbert, to change her clothes or be kicked off a flight, because her outfit was too revealing.

Now personally if I had to sit next to Ms. Ebbert on a flight, I would not have been offended by how she was dressed. I would have preferred that we were on an American Airlines flight however; that would increase the odds that we would be stuck together for hours sitting on the runway.

Sometimes it is important that a company change to respond to its changing environment, but at the same time you need to hold onto the important parts of a company’s culture that made it successful in the first place. Like a strong focus on customer service. Southwest may have forgotten how to focus on customer service and have fun doing it for a little bit. And at the same time competition has watched what Southwest did right and found ways to do it even better. Someone “moved Southwest’s cheese”, but you could write a book on that topic!!

Still the folks up in New York are looking for the "Southwest Effect". My guess is it will work out pretty good for some of them and the others will learn how to deal with it and Southwest Airlines will be one of the ones it works out pretty good for.

Read how Southwest does emailing.

“Well done is better than well said.”

BENJAMIN FRANKLIN