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Airlines get a big lift from great customer experiences

by | Aug 10, 2017 | Public Relations

Airlines that deliver a great customer experience are rewarded over the long-term, by consumers and investors, according to new research from customer experience advisory firm Watermark Consulting, based on its analysis of stock market returns for airlines that have a customer-centric approach vs. those that lag.

The analysis focuses on model portfolios of the Top 3 (“Leaders”) and Bottom 3 (“Laggards”) publicly traded airlines in J.D. Power and Associates’ annual North America Airline Satisfaction Studies.

“While many airline executives publicly tout the importance of the customer experience, not many airlines back that up with tangible improvements,” said Jon Picoult, founder and principal of Watermark Consulting, in a news release.

Airlines get a big lift from great customer experiences

“Instead,” he added, “these companies subject consumers to a variety of aggravations and indignities, from cramped seating to hidden fees to unfriendly staff.”

The issue, noted Picoult, is that many in the industry view it as a highly commoditized business, where cheap fares carry the day.

“Price is no doubt important to air travelers,” said Picoult. “But we suspected there were still ample opportunities for consumers to exercise choice, or at least influence others’ choices via word-of-mouth.”

The results of this study give credence to that hypothesis, with the fortunes of Airline Customer Experience Leaders and Laggards diverging in a dramatic and revealing way.

The Leaders outperformed the industry’s market index, while Laggards trailed it. The performance gap wasn’t small—over the six-year period examined, Leaders delivered a total return that was more than double that of the Laggards.

Summing up the findings, Picoult said, “Even in the seemingly commoditized airline industry, the customer experience matters. The sooner airlines, like any business, recognize this and act accordingly, the more valuable their brand will become.”

Read the report here.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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