Much ado about strawberry jam: End Users please Air New Zealand

I’ve written at LWCM about focussing on the end users, not the customers. While customers may be good for short term cash, lasting value comes from making end users happy through delivering to them valuable services and products.

In turn, companies that create a culture of over-delivering to end user needs, who execute well, and who are good at finding and retaining great customers will create long term value for shareholders.

Air New Zealand has in recent years been a shining light for placing the end user at the center of their operation. To me the transformation over the last few years was superb, and the airline was justified in winning the awards it did. I do still enjoy the flying experience, but tonight I was reminded that the airline is eternally at risk of forgetting about their long term value at the feet of over-emphasis on selling. This needs constant vigilance.

The first sign was the realisation that I paid for travel insurance on a trip a few weeks ago. I only realised when I saw the invoice:

Air New Zealand managed to extract $18 from me for a service I did not want and value at less than zero. Less than zero because the pain of unclicking the travel insurance box is a waste of my time and interrupts the flow of each flight purchase transaction. The interruption to flow means I am marginally less likely to buy. Meanwhile the amount is too small for me to bother to waste my time to call to explain the problem and ask for a refund.

The second reminder was an NZHerald profile of new CEO Christopher Luxon starts “Air NZ boss Christopher Luxon has sold everything from soap to icecream. Now he wants to sell tickets – lots more tickets.” Luxon arrived at Air New Zealand from Unilever, a sales-led company that sells products which surprisingly we have none of in our house.

Luxon talks about growing the market pie for travel rather than just winning market share, and that’s absolutely right.

But then there was this:

A change in strawberry jam supplier saved the airline $200,000 a year … The new jam was “good enough” ‘

Now we know. The food on Air NZ is “good enough” and not “Air New Zealand quality.”

I know that most flyers are going to accept the lousy jam, but for me reducing the quality of jam is a symptom of erosion of the Air NZ experience. It sounds trite, but I have for years examined the backs of jars of jam (and other products) to make sure that the ingredients are acceptable, and I do so on planes as well. For everyone the taste left from each trip will diminish ever so slightly.

Let’s not blame the new CEO – the procurement process a year or two ago for tea and coffee on domestic flights no doubt saved a bundle of cash for Air NZ, but the price for flyers is now wretched undrinkability.

These little things sum to the customer experience, and Air New Zealand’s focus on the customer experience is what won those awards, bought record numbers of tourists to our shores and helped move our domestic economy.

For me the key champion of the customer experience (over the shareholder) has to be the CEO, supported by the board. If not, then who will it be? And how would anyone else  ever have the power to keep the tasty jam over the short term voice of the shareholder?

In this instance we the people of NZ are the majority shareholders, but we also derive benefit far beyond the profits of the airline. Every passenger Air NZ brings to or from New Zealand contributes to our economy and society. Every pleasant trip makes us happier and less frustrated. This is something worth preserving, as any flight in the USA will remind us.

What should Air NZ leadership do?

1: Keep it up

Please continue to place the end user, that’s us flyers, first. You’ve done so for several years now and the staff and service are fantastic.

2: Door to Door, end to end

There seems to be increasing acceptance that the trip is door to door not gate to gate, and that trend needs to continue, whatever the mode of land transport.

The mPass iPhone application and the revamped check in process are superb, and both have obvious room to improve and hopefully development paths. But the website is grossly dated, and the opt-out steps conflict with the goal of simplicity.

3: The next big thing

But that’s the status quo – continuous improvement is only standing still. We need Air NZ to keep surprising us with a series of “one more things.”

Consider putting yourselves back into our shoes, but lifting your standards of minimum acceptableness. Train yourselves to get frustrated easily, like I do, and to observe the point of pain that earned the grimace.

To start, book your own end to end travel, and do so using your own retail website and other services. Drink the tea in flight, eat the cheese with inadequate crackers, and sit at the back of the plane.

I’d like to see the next generation of products emerge from a Hanger 9. I’d like to see things that nudge passengers to get on and off planes faster, that make booking and flight management a joy and help travellers of different types self-identify and get what they need.

When it’s more fun and easier to fly, we fly more. And that’s good for Air NZ, the economy and the country.

About Lance Wiggs

@lancewiggs
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3 Responses to Much ado about strawberry jam: End Users please Air New Zealand

  1. steveardagh says:

    Lance,

    Unfortunately, this seems to be only the tip of the iceberg…

    While the staff are generally great the pressures put on them to extract every dollar is starting to tell. From the prison warden stalking up and down the queue as you board the flight hoping to catch someone with an overweight carry on bag, to the ludicrous extra $$ they charge even “their most important customers,” to reserve a preferential seat. The seats that flying around the world a few times a year meant you used to get for nothing!

    I know they will say it is a competitive business and they have to take very opportunity, but wouldn’t it be great if they decided to take the slightly higher path and not follow the rest of the industry down mediocrity road?

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  2. I’ve always thought that for domestic travel, Air New Zealand’s smartest strategy against Jetstar is to be demonstrably less awful. This manages to tick the less awful box – just – without quite reaching the ‘demonstrably’ standard.

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