Quote of the Day

“If I had six hours to chop down a tree, I’d spend the first hour sharpening the ax.” — Abraham Lincoln

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Win Win Loyalty

Seth Godin’s post on how to treat your best customers made me think of two industries.

One industry has it so wrong that one member is advertising that it is treating them better by not treating them worse:

Frequent-flyer programs are a great example of how treating your best customers right is good business.

  • It is a differentiator for the full-service airlines when competing against the low-cost companies. Listen to frequent travellers speaking and you will hear them say that they will not travel on a low-cost airline yet without the advantages of frequent-flyer status the difference in service is minimal.
  • Frequent travellers get free upgrades when the economy section is overbooked and there are seats available in business class. This allows the airlines to maximize their revenue and avoid the costs of bumping a passenger. Additionally, the upgraded passenger will typically tell everyone they know about the upgrade and the service they got in business class.
  • Customers will spend more and make other efforts to get and keep the perks that go along with frequent traveller status.
  • Selling frequent-flyer miles to partners generates revenue.

The airlines have made the benefits of being a good customer something that people will spend extra for and most importantly have turned these customers into evangelists.