It can be one of the most frustrating experiences in travel.\u00a0 It also will put the customer service skills of that company\u2019s employees to the most extreme test.\u00a0 The protests of \u201c…but I have a reservation\u201d with really no other response except to say there are no more rooms or no more seats to offer.\u00a0 The point-of-sale system experience is questioned: \u201cWhy did it let me book if there aren\u2019t any reservations?\u201d<\/span><\/p>\n I\u2019ve also been on that other end of the spectrum.\u00a0 Because I have traveled so frequently, status has allowed me to book a room or flight even when it was completely sold out.\u00a0 Surely I paid much more than most others and ended up with a room or seat location that didn\u2019t meet my preferences, but my ability to pivot last minute to meet a work obligation was certainly a relief.\u00a0\u00a0<\/span><\/p>\n As a customer experience example, it highlights the worst thing a customer of one of these companies can go through.\u00a0 As a business, it represents the ability to ensure you are maximizing every revenue opportunity.\u00a0 This is bad for the customer, and good for the employee, so it is one of those customer service experience examples that we always position that way.\u00a0 But is it really that bad for the <\/span>customer experience<\/span><\/a>?\u00a0 Can it be a positive aspect of your <\/span>customer experience strategy<\/span><\/a> and your business at the same time?<\/span><\/p>\n While this looks to be good for only the company, it is much deeper than that.\u00a0 Surely if you field a <\/span>customer experience survey<\/span><\/a> with a customer that was just bumped from their reservation, you would understand their poor response.\u00a0 In fact, across all the <\/span>voice of the customer<\/span><\/a> systems and in social media, you might hear about this single customer event multiple times including a CX ticket in your <\/span>customer feedback loop<\/span><\/a> process.\u00a0 At the heart of it all, it is a benefit for the companies\u2019 topline revenue, but with the right execution and communication, it really can be viewed by the customers for their benefit.\u00a0\u00a0<\/span><\/p>\n The company benefit is easy to see, it comes in greater revenue (and likely profits).\u00a0 In the airline industry, there will always be a certain amount of no-shows.\u00a0 By overselling those seats, they are able to keep the revenue per seat where it is needed to remain profitable.\u00a0 Additionally, a no-show that may have already checked in online or through the mobile app may cause an extended flight delay unless there is someone already in the gate area ready to take that seat.\u00a0 Those flight delays cost money.\u00a0 For a hotel, the scenario is the same.\u00a0 Even with a credit card guaranteed reservation, there will still be no-shows.\u00a0 Sometimes that revenue is lost because the prospective guest will fight the charge despite the policy.\u00a0 If it is a multiple-night stay, the hotel only recovers the first nights\u2019 stay.\u00a0 In addition, there are also what is called \u201cunderstays\u201d – for example when a guest book for seven nights, but stays only five nights.\u00a0 These impact the occupancy and therefore profitability. Overbooking ensures each room revenue is maximized.\u00a0\u00a0<\/span><\/p>\n In both scenarios, the person most likely to lose their reservation is either paying the lowest price, is not participating in the loyalty program (or is at the lowest level), or in some cases simply did not check in early or on time. There is no fixed formula, but you can see why those groups might be prioritized.<\/span><\/p>\n How could this possibly benefit the customer and make the experience better?\u00a0 First, consider that this impact is minimal.\u00a0 In a recent <\/span>Instant Answers<\/span><\/a> poll by QuestionPro, fewer than 4 in 10 have ever been impacted by a cancellation.<\/span><\/p>\n That may seem like a high number, but consider one estimate that stated that it was fewer than <\/span>1 in 10,000<\/span><\/a> airline travelers impacted (2019, pre-COVID).\u00a0 That is a mere 0.01%, your odds of being struck by lightning in your lifetime is 1 in 15,300 (which rounds to 0.01%) according to the <\/span>National Weather Service<\/span><\/a>.\u00a0 Despite being roughly similar statistics, I know which one I would prefer and even though both are unlikely, we really do not want either.\u00a0 It will happen to almost half of us, but certainly not something we would have to worry about on most trips.\u00a0\u00a0<\/span><\/p>\n Another impact would apply to operations.\u00a0 Whereas a lapse in operations will cost the airline money, it will cause other customers to lose time.\u00a0 If someone checks-in for their flight, but then doesn\u2019t show, there will be time given for that customer to show up and take their seat.\u00a0 That time could cause delays on the other end of a flight, turning a layover into a heavy sprint or missed connection.\u00a0 No one wants that, let alone a full plane of individuals.\u00a0 When someone is there to take that seat, the no-show gets bumped to the next flight based on a policy and everyone else leaves on time.\u00a0\u00a0<\/span><\/p>\n Neither of those is very tangible and the importance may vary per customer, one thing most customers can relate to is price.\u00a0 This can be a benefit to all customers.\u00a0 If an industry is losing out on 10% of its inventory on a regular basis, prices would likely increase by 10-15% immediately.\u00a0 The same statistical models that are run to determine how much overbooking should be done can also be used to compute how much each customer would have to pay \u201cextra\u201d to avoid overbooking.\u00a0\u00a0<\/span><\/p>\n There is one more group that generally benefits from overbooking and that is your most loyal customer. Especially in travel, it is the loyal customer that has the best opportunity to book flights or hotels that are oversold.\u00a0 It is often a perk including in attaining a loyalty status with that company.\u00a0 I have been on both ends of that equation.\u00a0 I\u2019ve had to book a hotel with less than a week\u2019s notice in a city that has a big event happening for business (in fact for one circumstance, I was made part of one such event last minute).\u00a0 I had to pay much more for that hotel than other rates that had been reserved, but due to the unpredictability of my schedule, the flexibility made me even more loyal to the brand.\u00a0 I have also shown up late at night after extensive flight delays and, despite my status with the chain, my reservation had been given away to someone else as I had not checked in using the digital tools and they gave my room to someone else so at three in the morning I was being \u201cwalked\u201d to another hotel.\u00a0\u00a0<\/span><\/p>\n When I was bumped from the hotel, I was still accommodated, given extra spending money for my trouble, and given three free nights with their brand so I could have a weekend getaway.\u00a0 The alternate accommodations were further from my work, but I was put in the most upscale brand and given transportation.\u00a0 I\u2019ve also been bumped from a flight when departing from my hometown, in taking an extra four hours to get on a flight to my destination, I ended up with $1000 in future travel credits, a meal voucher that I gave to a family that could use it more than me and I went home for three hours to spend a little more time with family.\u00a0\u00a0<\/span><\/p>\n For any customer experience strategy, finding a way to do more for your most valuable customers and trying to make others more loyal should be a strategy, and this can be a part of that strategy as well. Despite these circumstances, it still doesn\u2019t make for a good day when it does happen to a customer.\u00a0 That is where a properly communicated explanation and a well executed plan can be a big win for the customer even despite the bad customer experience<\/a>. Disruptions will occur in any business, it is how you handle them that will drive that business forward.<\/span><\/p>\n At QuestionPro, we work on what we believe in.\u00a0<\/b>Schedule a demo with Ken<\/span><\/a> and discover how to boost customer loyalty and collect valuable consumer insights through our CX survey and analytics management platform.<\/p>\nBut Wait\u2026 How Can This Be Good?<\/h2>\n
The Customer Experience Can Win<\/h2>\n
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