01/21/2014 07:02 pm ET Updated Dec 06, 2017

When Perks and Discounts Can Hurt Your Business

I speak with corporations and groups around the world, so I'm constantly flying on planes and staying in hotels. I see the good, the bad, and the ugly of airline and hotel customer experience.  My experience proves there is one area where so-called loyalty programs consistently fall short. A customer shouldn't have to jump through hoops to obtain their perk or discount from a provider.  Let me share examples, illustrate the problem why loyalty programs fall short, and then offer suggestions on how you can avoid these same mistakes with your customers.

Examples To Illustrate the Point
Here are two very frustrating customer experiences with airline perks and discounts.

I purchased an airline ticket from Washington, D.C., to London where I am speaking across various venues about my soon-to-be-released book, Same Side Selling. Because of my loyalty, the airline issued me complimentary upgrade certificates. It turns out, though that the upgrade certificates are only good on certain fares. Unless you have a doctorate in airline terminology (yep -- I made it up), you'd never know how to search for fares that are eligible for the upgrade. After trying a Ouija Board and a lucky rabbit's foot (unlucky for the rabbit) to determine which code to use, I finally called the airline for support. It took forty minutes to book my flight using the complimentary upgrade certificates!

The second airline ticket I purchased was for a family trip and I wanted to use a travel certificate. The airline sent me the travel certificate to apologize for a four-hour flight delay.  When I received the travel certificate, I was impressed that the certificate was waiting for me upon landing in Washington after the delayed flight. Receiving the unexpected travel certificate almost made me forget my frustrations about how late we arrived to our destination.  I found the gesture rather "friendly."

However, when I went to use the travel certificate, it would not work as the instructions suggested. I called the airline customer service line and a person from Manila asked me to do the same step I had already tried prior to the call. The customer service person asked me to do the same steps three times. I guess they somehow expected the system to give different results despite the same input. After a mere two hours, I was able to book my flight using the certificate, but all of my family members are not in the same record because "the system will not allow it."  It goes without saying my frustration with this airline after these two ticket purchases out weigh any intended benefits of loyalty upgrades and complimentary certificates.

Here Is the Problem
The upgrade certificate and the complimentary travel certificate are designed to either recognize loyalty or compensate for service mishaps. I booked a trip to San Antonio two weeks ago without using any of these so-called "perks." The entire booking process took about 4 minutes. But, if I want to use one of the incentives, I better be willing to invest hours of my time.  Despite their advertisements, the airline's systems are not very "friendly." Instead of feeling good about the certificates designed to a) reward my loyalty; or b) compensate me for a bad experience, I felt less loyal, and mentally relived the entire negative experience of the delayed flight.

The bottom line is that if using a loyalty program (e.g. award miles, upgrades, discounts, etc.) is too difficult for the customer, then you defeat the purpose of the offer to begin with. Using these incentives should be at least as easy as a transaction without them. Take the time to test your systems to ensure that the customer experience is exceptional especially when redeeming loyalty rewards or discounts to compensate for negative experiences.

How To Turn Client Rage Into Rave
When your customers get angry because of a mistake, they can be just steps away from the emotion of rage. Here are three keys to turn an angry customer from potential rage into enough delight to lead them to rave about you.

1)     Own it:  Even if the problem is not entirely your doing, take ownership. Even if it means saying "I'm sorry we did not anticipate that situation. Let us work on a plan to ensure that we swiftly resolve the issue.  Do you have any ideas we should not overlook?"  This allows you to take ownership, but includes your customer in the solution if they desire;

2)     It's never their fault:  I had an airline employee tell me "What you need to do is..." The customer never "needs to do" anything.  At best, you could say, "We are working on improving our systems. In the meantime to avoid this in the future, you can try..."  Suggesting that the customer caused the problem is never the answer (even if they did);

3)     Follow-up:  After you have made the effort or gesture to make it right, take the next step to follow up. It might be along the lines of "We are sorry you had that experience, and we are taking steps to fix our systems going forward. How have we done to resolve your situation? We value your business and hope we've made things right.

Take these steps to ensure your best customer speaks about you with raves not rage.

It's Your Turn
When has a company turned a potential disaster into an opportunity for you to become a raving fan?