Sunday, September 09, 2007

A Tale of Two Responses: Apple and Southwest Airlines

This has been a fascinating week for those of us who communicate for a living. Two companies, Apple and Southwest Airlines, both of whom are famous for nurturing their customer loyalty, were called upon to issue public responses to actions they each took. Apple handled it very well; Southwest failed.

This is ironic (though I imagine not particularly unique) because, of the two companies, Apple has had a long history of being less flexible and closed in its strategy; alternatively, Southwest makes a business of being flexible in the way they deal with customers.

Here’s a version of the situations as I understand them:

  • Apple announced a price reduction of the iPhone to $200; loyal Apple customers who had bought the iPhone at the original much-higher price balked at such a deep price cut so soon after the product’s launch; Steve Jobs initially brushed this customer response off; and later -- within the same day -- Apple issued a fairly comprehensive apology to its loyal customers and offered them a rebate. (Here’s one news story.)
  • Southwest Airlines pulled aside a woman who, it claimed, was too provocatively dressed to travel. The woman took her embarrassment public, including showing the outfit, which few people found offensive (though many note that the top is tight and the skirt short – like lots of other travelers these days).(Here’s one news story.). Southwest Airlines' repeated response to press inquiries has been one version or another of “we were right.” Here’s Southwest’s own Blog response.

It seems that though both companies are superb at building and maintaining customer loyalty, Apple has shown superb communications skills (as they have often for a long time) and Southwest failed to use some pretty basic communications skills effectively.

One of the first tenets of “crisis” communications is acknowledge the problem/mistake quickly and take action to repair things. But, while Apple did just that and turned a potentially customer-loyalty-damaging situation into a win (both perceptually and financially), Southwest took a situation that could have been minor and turned a molehill into a mountain.

Yes, I know that you might argue that Southwest is taking a “family friendly” position and broadcasting it; and hence, seizing a big opportunity. Maybe that’s the correct way to view their actions, though I am a frequent Southwest traveler and I don’t get the impression that their customer loyalty approach is as much about family values as it is about flexibility.

It will be quite interesting to see how these two sets of actions play out over time.

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