The Discount Airlines Get It

Image via Wikipedia

I've consistently said, "Lower prices aren't always what customers want."

Many companies blindly take the lower prices path, believing that customers will flock to them and remain loyal as long as they have the lowest price point in the market. They mistakenly believe that they can get away with providing poor service, or no service, because customers understand that they get what they pay for. What customers tend to want, however, is lower prices and service that is more than they expected.

An article this week in USA Today provides a great case study. The three airlines that rank highest in service were discount airlines: Jetblue, Southwest and Frontier. Customers have found that the lower priced airlines are also providing better service than their big competitors. In this case, travelers might expect less frills and a worse service experience on the cut-rate airlines, but the discount airlines are providing a cheaper ticket and service above what customers expect. For the larger airlines, the challenge is now even greater. How are they going to provide service for which customers are willing to pay a little extra when the low-cost competitor is already providing a higher level of service for less money?

Customers are often willing to pay a little more for a better service experience, but not if the competitor is already providing a better service experience for less!