One of the big headlines today is Southwest Airlines’ purchase of budget competitor AirTran Airways. As this article from Businessweek indicates, the prevailing thought is that Southwest had little choice but to buy AirTran. Sources have indicated that AirTran offers Southwest the opportunity to put its planes into previously unavailable airports in Mexico and Latin America. In light of the fact that Southwest will soon face the massive United/Delta merger, the company needs every advantage to still maintain its position as a moderately priced domestic carrier.
One aspect of its business that has always separated Southwest Airlines is its commitment to customer service. This is probably best highlighted by the company’s recent (and emphatic) campaign to promote its lack of fees for a customer’s first checked bag. I personally love the latest ad in which a Southwest employee, posing as a law enforcement officer, states that a competitor’s full plane means that Southwest’s rival makes “$20,000 profit” from its baggage fees. While viewers who read the commercial’s disclosure will see the scenario which creates the $20,000 figure, Southwest is relying on the fact that the average person will listen rather than look. When put in those terms, a “greedy” competitor scams passengers for $20,000 worth of baggage fees while Southwest graciously lets their bags fly for free.
This ties into Soundview’s new summary of the revised edition of author Rick Barrera’s book Overpromise and Overdeliver: How to Design and Deliver Extraordinary Customer Experiences. Barrera points out that business frequently underpromise customers in the hopes of overwhelming them by overdelivering during the transaction. Southwest is recognized as a company that follows Barrera’s strategy to overpromise as well as overdeliver. The no-fee policy for the first checked bag is rapidly becoming the hallmark of overdelivering in the airline industry.