Mark Mitchell, managing director of American’s Customer Experience area, tells the story:
“In the middle 2000s, maybe 2003 to 2006, as American worked very diligently to take the right path financially and not go through the bankruptcy courts, we preserved cash and ceased investing in some of our core products. Our customers, our employees— maybe both—began to see that maybe we weren’t as customer-focused as some of our competitors.
“So we needed to make it very clear to our employees and our customers that from company leadership all the way down to our frontline customer contact employees, we were jointly committed to moving that dial.”
Extra Pay for 69,000 Employees
What arose is American’s Customer Experience (CE) award, just one of the airline’s variable pay components. In one recent quarter, approximately 69,000 airline employees received $10.4 million.
As in any effective incentive compensation program, American first determined the program’s goals. The ultimate goal, the airline decided, is pleasing their customers.
|
Health Care Reform’s 2011 challenges—Are you clear on what you need to do this year? And next? BLR’s new Focus Report, Health Care Reform—After 1 year and Beyond—spells it out, year by year. Get information or order |
“As we got started,” says Mitchell, “we had the belief that we needed to develop a system that would resonate with our employees. We wanted them to say, ‘If I do certain things, our customers will notice the impact in a positive way, and I will get some kind of recognition or reward payment.’
“And, of course, that becomes a kind of circle: ‘I do this, the customers like it and it drives more customer loyalty, and the customers then spend more with us.’ Our employees should be recognized and rewarded for that.”
The level of customer satisfaction is directly tied to employee performance in three major areas, Mitchell continues, and the CE program is designed to capitalize on that fact.
“We divided our customer contact employees into three fundamental groups. One delivers the airport experience, one delivers the onboard experience, and one we call our “likelihood to recommend” group—that would include our call centers, our Advantage folks, our online staff, product resolution for baggage, and things like that.
‘We get back 50,000 surveys a quarter’
“We created customer surveys focused on these same three metrics. We get about 50,000 customer surveys back each quarter. Each customer gets either the ground survey or the onboard survey. Each of them dives into a lot of pieces of our business, but there are overarching questions that we ask:
- Based on this flight today, how likely are you to recommend American Airlines to a friend?
- Based on today’s flight, how would you rate your overall airport experience?
- Based on this flight, how would you rate your overall onboard experience?”
|
Year-by-year To-Do list for health care reform—Are you clear on what you need to do this year? And next? BLR’s new Focus Report, Health Care Reform—After 1 year and Beyond—spells it out, year by year. Get information or order |
The CE award program is based on responses to those questions. Mitchell explains that any statistical improvement is celebrated. “The program is based upon our employees’ ability to deliver, and it’s based upon continuous improvement. If we just get one point better, or even a tenth of a point better than the previous year, the reward pays out.
“Of course, we would love to improve at light speed. But if we improve in incremental amounts each month versus the same month in the previous year, and we set that tone and philosophy in our company for the next several years, it will take us back to a very good place in the eyes of our customers.”
In tomorrow’s Advisor, how to put an American Air-like incentive program to work in your organization, and an introduction to a new health care reform guide.