CEO: Setting Customer Expectations

Makovsky

I have always believed that companies — maybe even more so than people — should communicate what they stand for.  One may be known for expensive products and another, as a discount operation.  If in retail, does the firm have a liberal or conservative return policy?  Is the company recognized as a great place for women to work and build careers?  Does it respond quickly to consumer complaints?  These are all examples of positions.

The reason that positioning is so critical is that it guides customers in the direction they need to go.  Do they need a B2B firm or a B2C organization?  Do they want an airline that features aisle seats with extra legroom or one that promotes lower cost fares at the expense of comfort?  Successful companies usually develop such narratives to move action. By setting expectations, you also build reputation.

Accordingly, I am always impressed with companies that can hone in on their customers’ needs, define themselves and then market the heck out of the offering.  One such company is Spirit Airlines, which clearly sets expectations and appears to be benefitting commensurately. 

Whether you find it cheeky or way over the line, you can always tell a Spirit ad.  The style of the communication is inevitably both clever and cool.

After a report named Spirit the “most-complained-about U.S. airline,” its CEO responded with an open letter and a $24 discount, in honor of the “99.99 percent” of its passengers “who did not file a complaint with the Department of Transportation in 2013.”

Quotes from the open letter appeared in USA Today and a number of other media outlets.  They beautifully illustrate the Spirit story, as narrated by its CEO Dan Baldanza:

“…the #1 thing that makes our customers happy is getting where they want to go for less.”  

That immediately tells customers the company’s position.

“Offering our low fares requires doing some things that some people complain about — more seats on our planes with a little less legroom, no Wi-Fi  or video screens and no refunds without insurance; however, these reduce costs, which gives our customers the lowest fares in the industry.”

“There is one thing we won’t do — add costs for things that most customers don’t value as much as our low fares just to reduce the complaints of a few customers.”

“We will continue to work in every way we can to help our customers get where they want to go, safely and reliably for less money.”

I admire Spirit because it so precisely states what it is and what it is not.  Spirit identifies complaints and quickly responds to them.  It even acknowledges complaints from people who would like Spirit to be something that it is not and defends its position. 

It’s worth noting that Spirit averaged 8 complaints per 100,000 customers and, according to Baldanza, “for the last few months, complaints about Spirit have declined by over 30% to 5 per 100,000 customers. And, we’re still not satisfied.”

All companies should do as well.