What Happens When You Forget Your Consumer?
Dave Garrison
Facilitating Teams to Game Changing Results through Buy-In? | Expert Strategic Planning Facilitation ? | Workshop Leader for Executives | Mindset Coach |
Have you ever noticed that even the best well-intentioned decisions can go off the rails??
That’s what Delta Airlines experienced recently.?
It can happen to the best run organizations. It can be an obstacle to set ego aside and practice open and honest assessments in a trusting environment. This is necessary to fully empower teams and remove the fear of punishment for calling out the truth.
Delta Airlines recently announced dramatic changes to their frequent flyer program that generated an uproar. Delta made an abrupt pivot from its previous policy: to maintain Diamond status, flying the airline doesn’t matter. What matters is how much money you spend with the airline and importantly on your Delta American Express card. As a three million miler on Delta and a Diamond member, I feel like I’m being punished!
What happened? Did they lose their mind? Are they intentionally alienating their largest customers? Turns out the answer to the last two questions is no.?
Delta’s largest customer is American Express. They are estimated to receive $7 billion dollars a year from American Express through the sale of frequent flyer miles, vacation packages and credit card commissions.?
领英推荐
Said more directly, the frequent flyers are a consumer of the product and not the customer. The revenue that Delta receives from AMEX is more than Delta gets from any other customer. To put this in perspective: it would take every single person in Reno, Nevada, spending $30,000 a year on Delta to equal the one payment AMEX makes every year!
The changes in the frequent flyer program are about meeting the needs of the American Express customer–more credit card charges yield more fees for American Express.?
However, it was done so drastically and communicated so poorly it created an uproar from consumers. To his credit, CEO Ed Bastian indicates they will backtrack on some of the changes in the next several weeks.
It humbly makes me reflect on decisions I stuck to as a leader that were wrong and I should have backtracked on. Kudos for the backtrack- the test will be how artfully Delta balances the needs of the consumer and the customer!
#leadership #management
Executive Assistant & Strategic Communications Specialist | Driving Engagement & Partnerships for High-Impact Creators
1 年Ed Bastian has modeled some good leadership lessons in admitting being wrong and acknowledging the customers’ experience. I’m concerned that he’s attributing the changes to having too many premium travelers in its program after the pandemic and not mentioning the Amex revenue. Ganesh Sitaraman wrote an interesting article in the Atlantic, “Airlines are just banks now,” that noted that all airlines are making more money from their mileage programs than actually flying planes. The author notes that the deregulation of the airline industry in 1978 has led to consolidation, cost-cutting, and a decline in service quality and suggests that a modernized set of regulations could help to make air travel less miserable for consumers. It’ll be interesting to see how airlines adjust their priorities in the near future. https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/?utm_source=danielmiessler.com&utm_medium=newsletter&utm_campaign=ul-no-400-what-hiring-managers-want-cve-farming-hunt-forward-operations-and-ai-vs-b2b-services
Happily Retired
1 年I’m all about the backtracking. Do it, admit you messed up, fix it, move on and learn from the blunder.
Dave, you're not just growing businesses, you're growing smiles on faces with your positive vibes! Keep cultivating success and laughter. did you know a webpage that takes more than 3 seconds to load loses 40% of its potential customers?