How to Save $500 million

What happens when you combine the best parts of Continuous Improvement (CI), technology implementation, expense management and understanding of the Customer Experience (CX)? You dramatically increase customer satisfaction and save almost $500 million in the process. At least that is what Alaska Airlines did.

Alaska Airlines was outgrowing their terminal in Seattle and looking at having to build a new terminal at a cost of $500 million dollars. Lines were long, the area was crowded and passengers weren’t happy. They first tried technology by adding kiosks. This was done without looking at the problem or factoring in the customer or employee use of the kiosks. The kiosks took up space, weren’t used and actually made the situation worse.

Out of necessity they took a step back and used a number of CI and CX design techniques. This article has the details though ultimately they literally took an empty warehouse with cardboard boxes and prototyped out a great customer, employee and business experience. What I would call Shakespeareing. More than just prototyping, they acted it out to see how changes would or would not work in real customer and employee interactions. They play acted through scenarios and uses and did so real time at a very low cost. Just some boxes and time.

With what they learned from their Shakespeare prototyping they were able to utilize the technology in conjunction with their opportunities to improve their process and customer experience. In the end it cost $28 million to make the improvements rather than $500 million and adoption of the kiosks was 70% for Alaska versus the industry average of 50%. Employees were happier as well because the layout of the area was more ergonomically sound and they dealt with happier customers.

When we bring together continuous improvement culture, technology and a focus on the customer experience we create a winning formula for increased customer satisfaction, employee engagement and a strengthened bottom line.

This story is from a few years back and there is no doubt savings and improvement efforts like this enabled Alaska to maintain a healthy bottom line, enough so that they recently were able to purchase another great airline, Virgin America.

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