Your customer experience is about to change, in this new frontier.
Frontier Airlines will no longer answer customer service phone calls, according to CNBC. So passengers and customers who need to make changes or gain flight information will not be able to call the airline and speak to an agent. Now that Frontier has eliminated its call center (the previous customer service number dialed a Salt Lake City number - it wasn’t even toll-free), customers that need to speak to an agent will deal instead with an online chatbot, available 24x7. Frontier offers service via an app, as well as social media channels and even WhatsApp. What will happen to customer service, without the opportunity to speak to an agent? Carriers and other companies, take note: online customer service is only going to increase. Here’s why.
Earlier this month, the US Department of Transportation ordered Frontier to pay out over $200 million in refunds to travelers whose flights were cancelled or delayed, according to CNBC. Those fees are in addition to a $2.2 million fine for delays in paying refunds to customers. In 2020, complaints about airline refunds made up over 85% of the customer complaints lodged with the Department of Transportation (DOT). Commenting on the fees and fines, US Transportation Pete Buttigieg said, “It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay.”
Inside the Customer Experience: Changing the Airline Industry
Ask anyone whose been on the receiving end of “customer service” with any airline, and you better fasten your seat belt. It’s going to be a bumpy ride. In June, consumer complaints were up 300% for the airline industry. Leading the way in customer complaints on the list of the top 15 airlines? Ultra-low cost carrier, Spirit Airlines. (Frontier was fourth on the list).
Against a backdrop of massive flight cancellations (a 43% increase in Q1 2022) and a whopping 32% increase in carrier delays, consumers aren’t necessarily interested in waiting on hold to speak with an agent. A recent study suggests that 25% of Americans would rather shave their heads than call customer service. The results of that One Poll survey shows that the current state of customer service on CX (the customer experience) is driving people to extremes: 62% of respondents have stopped using a company specifically because of bad customer support, and 65% said that it just doesn’t feel worth it to resolve an issue - due to the time and effort involved. Maybe Frontier isn’t breaking new ground here - they’re actually giving customers what they want. No wonder 30% of respondents would rather do their taxes than sit on the phone with a customer service agent.
Go Mobile, Or You Might Not Be Able to Go Home
"Think about the type of obscure question a customer might ask that would take a call center agent many, many minutes to research and find an answer to. The chatbot can answer that very quickly," according to Jack Filene, Frontier’s Senior Vice President of Customers. In a call with investors, as reported in the International Business Times, Filene says that the change would help reduce labor costs and accelerate transactions with potential customers.
Airline industry monitor View from the Wing explains that the choice to go online is just another step towards the value equation for customers - and one that discount flyers readily accept. “If you want to fly Frontier it’s not nuts for them to expect the burden to be on the customer to use the least-costly means of interacting with them. They already set up their fees in a way to encourage online check-in, prepayment of bags before getting to the airport, etc.”, writes airline industry analyst Gary Leff.
What about the customers that just can’t - or won’t - interact that way? Looks like their flight just left, and they missed it. Better find another carrier while you still can. “We have found that most customers prefer communicating via digital channels,” Frontier spokesperson Jennifer F. de la Cruz tells CNN, as she points out that their new solution isn’t reductive, it’s expansive. Frontier can now receive information as “expeditiously and efficiently as possible.” Notably, no comment was provided on how quickly customers can do the same.
Doing More with Less, in Customer Service
The past quarter marks Frontier’s first profitable quarter in over two years, according to Barry Biffle, Frontier president and CEO. Frontier earned a $31 million profit last quarter on $906 million in revenue. Very impressive considering that, during the same time frame, the carrier’s labor costs were up 70% versus 2019. Shareholders will be looking for last quarter’s profits to become a trend. The new moves in customer service are part of shareholder (and customer) demand.
The story of our time is doing more with less. As apps become more prevalent, more responsive and more user friendly, companies are turning to always-on chatbots as an effective and efficient means to service customers. And for those who choose ultra-low cost carriers, they now know what to expect. If Frontier’e model works, it won’t be long till traditional carriers embrace an all-online customer service model.
What About the Kinked Demand Curve - for Customer Service?
In the airline industry, there’s something called the “kinked demand curve.” This isn’t something kinky, but rather an economic construct that explains ticket pricing across a unique marketplace. In the airline industry, traditional laws of supply and demand don’t always fit. Air carriers experience a “kink” when prices are lowered for a particular route. When one carrier drops prices, other carriers have to follow suit - or risk being priced out of the market, as consumers can easily switch to another (less expensive) carrier. So while there are still lots of variables and permutations on route pricing today, notice that airlines play with everything (bag charges, meals, seat selection and more) in order to bend that kinked curve to their liking. To be clear, major carriers like Delta, United, American and Southwest aren’t competing at an ultra -low price point. But what about their costs? Doesn’t it follow that a similar demand curve would apply for profitability, and cost reduction - for all carriers?
Frontier Airlines may be sacrificing in customer service - or blazing a new frontier on the promise of greater responsiveness, speed and flexibility. The company’s leadership and publicity teams suggest that they are expanding the customer experience. For airline customers, perhaps they are grateful for the change - because things can’t get any worse, right? Still, it remains to be seen just how responsive that chatbot really is.
How long will it be before other airlines - and other industries - follow suit, and shift away from call centers and live agents, on the phone, answering consumer concerns? In between the complaining customers and the kinked demand curve, profitability always beckons. Chatbots and AI are ready to respond. Are you?
