United Gets Beaten Down Over PhoCusWright Presentation on Customer Experience

It’s been a long but interesting few days here at PhoCusWright. Mostly, I’m here to meet with people and learn more about their companies, so I haven’t been attending too many of the sessions. That being said, there was one presentation I absolutely had to attend: “Customer Experience and Flying: Not an Oxymoron.” Oh yeah, and this was presented by United. I figured it would get ugly, and I was right.

Tim Simonds, Managing Director, Customer Strategy and Metrics, first gave a presentation that was United Gets Roughed Up at PhoCusWrightentirely focused on the premium experience that United is trying to create. He used many of the buzzwords out there – they want to be “best in class” and they have a “bias for action,” and yes, he even pulled out the “purchase funnel.” Let me try to translate.

United is trying to provide an excellent premium product on its international fleet. The airline wants to really excel at delivering when the customer experiences the product, and this includes everything from the right seat/bed to little things as well . . . for the premium customer. The airline has a first class lobby at O’Hare to create a great experience on the ground, and they’ve even taken the agents that work there to the Disney Institute to give them training on customer service.

We were also shown a video with, as I jotted in my notes, “dramatic piano music and backdrops of Chicago.” This was all about the premium seat, and it made me wonder why they even bothered putting it together.

And that was that. Sounds good, right? Yeah, well if you’re flying international premium class then it is pretty good but there are a couple problems that came to mind immediately.

  1. Not once was the back of the plane mentioned in the presentation
  2. On time performance didn’t come up in the prepared remarks

I thought it was rather odd that these wouldn’t be discussed, but fear not, it came up immediately after the presentation was done. See, PhoCusWright has a Talkback feature where two people from the industry come in after the presentation to gang up and ask questions. This time, we had Josh Weiss, Delta’s Managing Director of delta.com and Self-Service alongside Jim Young, Frontier’s Vice President of Marketing, Sales, and Distribution (though he has a much longer history in the industry with other companies).

Apparently, Josh and I were on the same page, because he immediately addressed my first point above. He said something to the effect of, “I see a lot about the premium product but what about everyone else?”

Tim then clarified that United’s strategy is to provide a good experience for everyone and a great experience for premium passengers, but we didn’t get any details of what that might mean other than saying that good service was important.

Jim then jumped in and said that everything United appears to be doing is playing catch up. What are they doing to differentiate themselves?

Tim said that service would be the differentiator.

Josh wanted to know what else they were doing besides sending 200 people to Disney for training. What are they doing to help everyone else at the airline?

Tim said they’re having meetings with people every day and they’re really trying to make sure that management is setting them up to succeed. I’d guess few employees would say management is doing a good job of that right now, so there’s a lot of work to be done here.

On time performance did finally come up in discussion and Tim said they were making progress on that. I certainly hope so, because while the details didn’t come up on stage, I looked it up and found that they were 17th out of 19 airlines in September and they’re in 18th place for the full year. They’re also in the bottom half of the pack for lost bags (12 out of 19 in September) and they have well above the average level of complaints. So again, there’s a ton of work to do.

Josh had a good question that seemed to be almost an afterthought, but it was important that it was asked. He wanted to know what “class” the airline was trying to be in when it said it wanted to be “best in class.” Were airlines like Singapore and Lufthansa included?

Tim responded that no, they weren’t. They’re only looking at North American carriers. And then he said, “For us to say we want to be as good as foreign flag carriers is overstretching.” Ouch. So they want to be the best of the worst, apparently.

At this point, everyone started piling on. An SMS showed up on the screen that said, “All this focus on the customer but where were they in that video? I only saw a bunch of suits in downtown Chicago.” Good point.

Then an audience member noted that the magic of Disney is that they treat everyone well while United is “abandoning the back.” Tim tried to respond that you get a very different experience at the Grand Floridian then you do at Port Orleans (at DisneyWorld), but in my eyes that isn’t comparing apples to apples here. I thought about this as the session ended and we all left the room.

United (along with most legacy airlines) doesn’t understand which of its travelers are premium, so it’s pretty ridiculous for them to focus so intently on that area. It rewards its frequent fliers, but those people could have bought the cheapie fares for all their flights. Meanwhile, someone who has never flown United but buys a full fare walkup ticket won’t even get to sit in Economy Plus.

Putting it in DisneyWorld terms, you could have one traveler who goes to DisneyWorld 25 times a year, pays $80, and gets to stay in the Grand Floridian since he comes in so often. Meanwhile, you could have another customer who pays $500 for his only visit of the year and gets put in Port Orleans. That’s not how Disney treats its customers and it’s not how airlines should either. I won’t even get into the fact that even the lowest paying Disney guests are treated very well whereas United has a lot of work to do all around.

In the end, Tim took all the shots pretty well considering that his employer deserved them all, but I ended up almost feeling sorry for the guy. United has a lot of work to do, and they probably shouldn’t be giving a presentation with this title until they get all the basics in order.


34 Responses to United Gets Beaten Down Over PhoCusWright Presentation on Customer Experience

  1. DRG says:

    Wow. I wish I could have been there.

    The initial presentation sounds a lot of this presentation I heard at a public relations conference by this guy from a tobacco company on what I would call its “feel good” advocacy efforts. He just kept repeating “There is no safe tobacco product” over and over as if the admission was going to make everybody feel better about the fact that they were going to absolutely continue making them.

    Quote of the Day:

    “For us to say we want to be as good as foreign flag carriers is overstretching.”

    Wow. That says it all.

  2. AN says:

    It’s sad and infuriating. I flew out of SFO for 12 years so usually on United. Eventually got to 1K, and stayed that way for 5 years. It was always amazing to me how well they treated 1K and how the same airline could do so badly against the “usual” customer. Then the 1K service started to fall off – hold times on the phone, everyone and their mother using elite security, etc. Luckily I moved to NY, and can now be tortured by Delta and Continental.

  3. A says:

    United (along with most legacy airlines) doesn’t understand which of its travelers are premium

    My biggest #1 complaint about airlines and their absurd rewards programs.

    My biggest question is, can I build up a giant pile of United miles flying cheap domestic runs and then book a flight to Asia and get a free upgrade to their premium service? We all know being up front on domestic flights just means a wider seat, but internationally it is like a different world, of which I’ve never been able to afford. I figure it’s time I start to play the system since several years worth of very expensive walk-up fares have got me little more than an exit row seat. Thanks.

  4. CF says:

    A – Yes, you can do a bunch of cheap domestic runs and build up miles. Then you can buy the cheapest economy ticket international and use a combo of miles and dollars to upgrade (that’s a new feature). But the best deal is to just build up enough miles for a free ticket in the premium cabin, even though they recently devalued their miles a lot (higher award levels).

  5. Damion says:

    You could build up miles to use for a United upgrade on an international flight…or, you could use those miles for an upgrade on one of their Star Alliance partners (such as Lufthansa, Singapore, ANA, etc.) that is known for service throughout the entire aircraft.

  6. Maybe United thought since they were allied with Continental now they were qualified?

    This buzzword fest makes me seriously think that airlines need really awesome management all the way through, but they can’t pay enough for good management, so they don’t get it, which means they don’t have money for really good management.

  7. Daren S says:

    I haven’t flown United for many years, most of my recent experiences with US carriers has been with American. Whilst consuming their dismal product my overriding thought is always, I wonder whether the senior management at these airlines ever fly anonymously as a normal member of the traveling public? They should then fly one of the top tier international carriers and compare. I fear that they sit in their ivory towers listening to what they want to hear insulated from the truth that the experience their company inflicts on their customers is mostly truly miserable. This presentation just illustrates how out of touch United is with the needs of the majority of its customers.

  8. Zach says:

    Damion–I believe that most Star Alliance partners (Lufthansa, SAS, etc.) do not honor upgrades for United miles (and vice versa). At least, they don’t do it for people without status but with enough miles to theoretically redeem for upgrades.

    As for the idea that it is “overstretching” to become as good as foreign flag carriers…give me a #@*% break! I understand that we’re in a precarious economic climate right now, but I really do wonder what would happen if a U.S. carrier actually invested in overhauling the product–including the back of the plane–to match that of their international counterparts. I would suspect that a combination of smart marketing and word of mouth would lead to passengers singing the airline’s praises with their wallets.

    I do think that United’s international product is at least palatable compared to, say, US Airways, but when you compare it to something like Swiss or KAL, it’s a joke.

  9. The Traveling Optimist says:

    For United to admit they no longer meet the same service standard as some of their Star Alliance co-founders (Thai, Lufthansa) is flat out astounding. They’ve as much as said “Go fly Singapore cuz we’ll still give you the miles!”

    One airline exec many moons ago said something to the effect that “Our objective is to have the customer feel satisfied.”

    I thought about that at the time and what it meant. Not “pleased” or “thrilled” or even “excited” about their experience. Satisfied. They got what they paid for.

    I’m “satisfied” if I arrive at my destination safely and my flight operates reasonably close to schedule. I want to feel far more than that, however, by way of a genuine, solicitous service staff working in well-appointed, thoughtfully created environs. Even in coach.

    If they ever throw a bone to the back of the bus, at least send one back that isn’t half-eaten.

  10. Frank says:

    I wonder when some of the airlines will realize that there is a segment of the flying public (million actual miles plus) who wil now drive for two days rather than put up with the unconstitutional abuse rendered on a routine basis by the folks at TSA?

    I, for one, have all but stopped flying. So United, Delta, etc. can run all the programs they want, but so long as TSA is controlling the airport experience, my increasingly-large rear end will not see an airline seat any time soon.

  11. “For us to say we want to be as good as foreign flag carriers is overstretching.” — at least they’re being honest.

  12. rob says:

    “For us to say we want to be as good as foreign flag carriers is overstretching.”

    Wow, you don’t even WANT to be as good as them? Like, somehow being on par with lufthansa is NOT a goal?

    Couldn’t he at least have said something like, “We are focusing short term on being the best domestic carrier, and while there are certain hurdles that currently make it difficult for us to compete with some of the international brands, we do have an ambitious plan that we will be able to catch up, and surpsass them in the next (five, ten, fifteen, whatever) years.”

    When that time comes and they haven’t done it, no one will remember the one quote. But saying it now at least would give the whole presentation a point. Instead, we have a presentation that is about service, being given by a company that sucks at it, saying that they only want to get incrementally better. WOW. Out of all the employees United has, shouldn’t they at least have picked someone who knows how to bullshit an audience to give this presentation?

    Furthermore, talking down about any part of Disney, considering they’re helping you train your employees since you don’t know how to, seems a bit in poor taste. Especially since I stayed at Port Orleans (French Quarter–the resort is split in two), and when I left, I thought, “well, that was quite nice, and yes, a value.” I’ve never felt that when I’ve flown United.

  13. Mark Francesa says:

    As Joe Brancatelli at JoeSentMe.com said this week, United is a year behind in installing its lie-flat beds in business class. Just 16 planes (of 91) has been retrofitted and the 2009 timeline has slipped to 2010. In other words, they aren’t aiming for a premium experience up front, either.

  14. The Traveling Optimist says:

    Maybe the guy simply fell short in his response to the question. Maybe he intended to elaborate by saying…

    “….overstretching beyond what is feasibly achievable at this time.”

    That’s about as much as I can give for what still remains an unsatisfactory and rather stupefying response.

    And as far as their C-Class product, I still have no desire to be facing backwards during take-off with only my seatbelt preventing me from somersaulting off bodies and seatbacks and thru bulkheads on the way to the rear of airplane!

  15. eponymous coward says:

    Here’s a question: why don’t airlines structure their FF programs like Virgin America does, and reward points based on spend, not mileage?

    Heck, if you awarded STATUS based on spend (what a concept!), you’d pretty much know who your most valued customers were.

    (In all fairness, United SORT OF does this with Global Services, I think. But yeah, it’s wacky that you could get considerably more elite status on an airline based on cheap coach tickets vs. a couple of full-fare coach/business ones.)

    A lot of folks on Flytertalk would hate your guts, but really- do you WANT to be rewarding people who try to work your FF program for maximum benefit for minimum spend?

  16. Anon Coward says:

    Excellent reporting, Cranky. Keep it up.

    To some extent I feel that this lack of parity between US and foreign carriers is attributable to the protectionism in the US market. Hate to lose a domestic carrier by opening it up to overseas competition but if that’s what it takes to get to quality, then at this point, why not? What is the national security benefit to having carriers majority domestically owned if the carriers left by this are a disaster?

    Also wanted to ditto the prior posters comments regarding giving up flying and the TSA. The airlines would be able to charge more for any given product, if that product weren’t attached to the dirty package tied on by the TSA. I used to be a lot more open to discretionary flying. Not anymore.

  17. Alex says:

    I have to agree about knowing who your premium customers are. Having been a long term BA customer I have never understood american carriers approach to FF programs. For a long time BAs FF program has been heavily weighted to reward customers travelling on expensive fully flex tickets. In fact if you only ever fly discount economy theres no way of ever getting any status even if you flew a million plus miles. In fact cheap economy tickets only earn 25% of the miles whereas a full flex earns 100% and business 200%. I think all this translates to a better service because BA know they are only giving “freebies” away to customers who have spent a lot of $$$’s with them.

  18. jonathan reed says:

    If you are flying transatlantic coach and you have elite status with UA and both LH and UA offer convenient flights, do you opt for the extra leg room on UA in E+ or regular economy in LH. I’d go with UA.

  19. Anon Coward: “What is the national security benefit to having carriers majority domestically owned if the carriers left by this are a disaster?”

    The national security benefit is those planes are all considered to be on standby to ferry troops and essential personnel. Your 767s become medical evac planes, the passenger and cargo plans can be repurposed. The fear is if foreign ownership was allowed they could order the fleets overseas then attack.

    Far fetched, but perhaps the intent would be better carried out through operational restrictions. X% of your planes must be in the US or a specified list of allied countries at any given time.

    CF – With all this discussion of FF benefits, is there a ball park figure of what percentage of FF miles actually come from flying, and what percent comes from credit card purchases, flowers, mortgages and the like?

  20. CF says:

    eponymous – I know we’ve all talked about this here before, but sadly I think the answer is simple. The airlines are afraid to lose out on the loyalty they already have. It’s a like a drug for them, though some of this loyalty actually hurts them. They really should be devising a program that rewards profitable customers instead of just frequent ones. Global Services gets close to that but it’s a small piece. They don’t need small steps in the right direction, they need a complete overhaul. But the risk is great, so they’re afraid.

    jonathan – That’s a good question. Sure, the extra legroom is nice, but price will also matter. If I’m elite, I’m going to get Economy Plus for free, but otherwise I’d have to pay a decent amount. For me, that’s not worth it. Lufthansa’s coach product isn’t the best anyway, so I’d be looking at other carriers across the Pond. Give me BA or Virgin or even Delta for a better experience in the back. For me, being short means Economy Plus doesn’t matter as much as it does for others.

    Nicholas – Good question, and I don’t know the answer. I’d imagine that it’s an increasingly large percentage of non-flying miles since that’s a revenue stream for the airlines.

  21. The Traveling Optimist says:

    Jonathan – I enjoy E+ on UA when I can get it but the easy way to get better legroom is to find those few seats right in front of the passenger door. Room for days until you start playing footsie with the flight attendant sitting across from you. Of course, for the wider passenger, those hard seat dividers that hold the meal tray are a true pain in the tush.

    Best coach experience I’ve had on an international flight was Air New Zealand LAX – AKL. Generous legroom on a 747 with the middle seat empty on that flight. The seat bottom scooted forward on the recline, too, increasing the comfort as well.

    US carriers have a different domestic model than just about any European carrier simply because of the SIZE of the US market. In countries where you can drive the length of the nation in less than a day airlines there have to compete with the car, the train and new low-cost operations. Moreover there are few instances or requirements for connecting flights in those countries.

    Maybe the United States doesn’t need, say, 20 nonstops a day between JFK and LAX but there still remain probably five times the connecting opportunities just between those two. That means cheap fares, lots of traffic to pay the freight and any possible opportunity to drive loyalty to keep those planes full. That includes $99 fares over the years in order to earn C-class to Sydney.

    Look at the numbers. BA carries in a year what American Airlines handles in a few months. BA carries more international traffic, by far, than American, perhaps which is precisely why it can measure its loyalty in long-haul ticket revenue while American must still serve and satisfy the coast-to-coast trade AND fight for the oilman shuttling between Oklahoma and Houston on Southwest-level fares.

    I live in Dallas. American is my carrier. However much I spend, when the time comes, I want to be recognized for my choices over the years with a once every three years (before they expire) coach ticket to Europe or upgrade to Business Class.

  22. Bobber says:

    Best Coach for me was in Emirates, many many years ago. I’ve flown UA solidly since 2000, with 3 forced excursions on BA, VS and AA. None of those 3 offered anything better than UA (even VS with a 3 month old 747-400 – other issues there, I’m afraid), and I am treated well EVERY time I fly with UA. I should add I fly 95% of my trips in E+ on discounted fares (still paying no less than $1k per trip, though).

    The FF discussion, I feel, is not as clear cut as many comments suggest – and I think I’m agreeing with some of what TTO has said (above). I understand there might be unfair advantages favouring people spending huge amounts on corporate credit cards, but moaning about individuals who happen to fly a lot, but in discounted seats, is a little unfair. After all, there are plenty of airlines to choose from, all charging pretty similar fares. I reckon there should be some recognition for people showing loyalty doing cheap x multiple trips per year, as well as those who happen to either pay through the nose for full fare economy (why don’t you plan better) or the occasional premium seat in C or F.

  23. The Traveling Optimist says:

    Alex – another reason perhaps that makes US carriers different from their European siblings is Anti-Trust.

    US airlines cannot collude or collaborate on any market. Where they might WISH to reduce the amount of flying each generates, they cannot sit at a table and carve up the country or decide who will operate which flight at what time. So they are free or forced to try and do it all or face losing traffic for not operating at the time of the customer’s choosing.

    European carriers have virtually entire countries to themselves. When you’re the only thing going it’s either choose one of a handful of flights at astronomical fares or take the train. If you live in the low countries or Switzerland, hell, just drive!

    Air Inter, anybody?
    BCal, perhaps?
    Interflug, even!
    At least there’s BMI and Braathens SAFE.

    Ryanair has matured in to a solid outfit but which of the other low-cost operations in Europe have earned the Southwest reputation for reliable, punctual and safe service?

  24. CF says:

    Optimist – The European carriers haven’t had that kind of power for years. Beyond Ryanair, there’s easyJet, Air Berlin, Vueling/Clickair, and plenty of others. The domestic markets aren’t much anyway compared to the US. The European carriers have a much higher percentage of traffic from international runs, and that’s been their saving grace over the years.

  25. The Traveling Optimist says:

    CF – Agreed. It’s been some years since the European carriers could essentially dictate to their customer base yet they seem to have evolved their “magnetism” through global alliances and frequent flyer programs.

    The new generation of airlines range from unknown venture capitalist experiments in Russia to Ryanair who has weathered the storm across the Irish Sea from both Aer Lingus and BA.

    Referring to the “unknown” part, I’m planning a trip to Prague next year and literally only stumbled across SkyEurope in trying to find attractive fare options.

    If you’re only in Europe a lot of these carriers are household names perhaps but I’d like to see them, perhaps, market themselves here in the US as well.

  26. CF says:

    Ryanair and easyJet both fly to Prague as do some smaller guys.

  27. Wayno says:

    United a good kick up the arse or better yet stop flying out of the country. I was forced about a year ago to fly on UA from Atlanta to Sydney via O’hare and LAX and I actually got more on a flight from OHR to LAX than to Australia! On my last trip to the U.S I went out of my way to fly on Korean Air through Seoul to avoid UA

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  30. 250Kflier says:

    I am a UA Global Servcie 1k flier, with more than one million lifetime miles accrued on the airline.

    I just shelled out $1,964 out of my own pocket for a round-trip business class ticket between SFO and JFK. My SFO-JFK aircraft was changed from the “p.s.” (premium service) 757 to a three-cabin 767-300. We were told the 767 would have the new confurguation, but it didn’t – so the expectations we had were dashed.

    Worse, the inflight product was abysmal. Even though the equipment change had been made more than 12 hours before departure, the flight was miscatered, resulting in a choice of only two breakfast main courses rather than three in business class. No Champagne or sparking wine are boarded anymore in business class. No pre-arrival snack is served – they don’t even serve nuts or pretzels. Ironically, in Economy they were selling stuff. So I’m paying nearly $2,000 for what, exactly???

    This flight was had nothing to do with either “premium” or service. The last straw was broken by one of its horrid JFK-based flight attendants. A passenger’s infant kept pressing the call button, and the parent immediately cancelled the call. Over the PA, one of the flight attendants yells: “Flight attendant call buttons are to be used for emergency purposes only!”

    I have several other business trips coming up before the year is out. I plan to avoid United where possible.

  31. Sam Daams says:

    Sorry I didn’t get to meet you at Phocuswright last week! I was one of the people in the audience wondering why United was doing the presenting. Especially since I’d just come off an Air New Zealand flight which probably is my most enjoyed flight ever (well, other than the times I’ve been upgraded :)). I’ve decided to blog about it since I really feel Air NZ deserves some recognition for what they’ve done here. Won’t post the link in this comment, but click on my name above to find it.

  32. Marty says:

    I use to fly United pretty much exclusively up till early 90’s but customer service was getting so bad that I got rid of my United MileagePlus credit cards, and United became my last choice for travel. Recently I had to book a flight to London and United was the only available carrier that met the time constraints. I would say nothing has improved and the lounge in Heathrow is a joke – shabby furniture and carpets, nothing to eat and a pool of water in the bathroom because of a plumbing problem. What made it all the worse was a month earlier I did the same trip with Virgin. Massage on flight, a lounge with free haircut and short-order cook etc. I can understand why they feel they can’t compare to overseas carriers. Anyway – I think they need to focus on the basics – good customer service in all classes and a realization that their passengers are customers and not just chattel. When they say they are going to focus on the ‘premium’ customer experience, that tells me right there that they don’t really understand their problem.

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