The Perils of Reducing Service to Save the Business

Two items on today’s paper got my attention. One was an article about the airline industry. It seems that if you did not have enough of airline delays, lost luggage, oversold flights and plain bad customer service; well, you are in luck. The airline industry intends to fix all this problems by…..giving us more, much more, of the same, and the plan is to charge more for the lousy service! The article by Jeff Bailey of the New York Times News Service states that while the 2007 flying woes might indicate that there is a need for more planes to ease the overcrowding, in fact some airlines are planning to cut flights in the hope of raising prices.

Another example of cutting service, in this case features, in order to improve your business is the newspaper itself, as the San Diego Union-Tribune has been steadily cutting sections and features for some time now.

Usually the first thing that I read in the morning is the editorial section, which in most days consists of three pages. Well, to my surprise today it only had two pages of editorials and letters to the editor. This in the middle of a dramatic election! Of course, this is not new for the San Diego Union-Tribune. For months, actually maybe a couple of years, it has been tinkering with its content in order to make the newspaper more profitable. But the way they have been going about it is by insulting the readers’ intelligence. One trick that they have used several times is to combine, let say, the Food section and the Living section by telling us how much larger the Food section is now going to be. But you find that this particular section is now half of what it used to be, while the Living section is now also half of what it used to be. Some improvement!

Businesses have to find creative ways in order to survive. Newspapers, in particular, are going through a rough time. So many of us rely on the Internet for news, and this makes it very hard for the print media. By the time the newspaper arrives at your door 90% of its content is “old news”. What is a newspaper to do? It certainly makes sense to find the right mix of stories that will interest the reading public, and experimenting seems a logical way to do it. As to the airline industry, I do not claim to understand their thinking process. Abusing your customers doesn’t seem to be a great way attracting more; but heck, what do I know?

The problem here is that with experimentation comes the risk of losing more and more customers, until the business finally becomes irrelevant. Therefore, it is very important that the customer is treated with respect while the company finds a solution.

The newspapers have a right to fear irrelevance, as there are now so many other ways that a person can acquire information. As to the airline industry, clearly they do not fear irrelevance, so they mistreat the flying public with abandon

The lesson here is to not lose sight of the fact that the customer is an intelligent and rational actor, If we want our business to survive, we need to treat him as such, otherwise he will find a solution to bad service by going elsewhere.