What’s the best way to alienate your customers? Take away the things you did for them that your competition did not. The things that set you apart. The things your customers appreciated. Because when you eliminate the differentiators that made you a preferred retailer in your market, guess what? You’re no longer different. What’s more, you create ill will. Just ask Southwest Airlines.
Southwest, long recognized for its customer-friendly approach, a few weeks ago announced a major overhaul, ending policies that had set them apart in the aviation industry for nearly 54 years. Policies that made Southwest almost beloved. The company went from beloved to unloved overnight.
Like every other airline, Southwest stated that these changes aim to “drive revenue growth and reward its most loyal customers,” but many longtime travelers feel betrayed and outraged. That’s because many of these travelers are budget travelers, which was Southwest’s target audience for half a century.
You see, it’s better to never offer perks than to give them and then take them away. For example, you can’t offer a superior in-store experience and then turn yourself into Home Depot. You can’t guarantee next-day delivery and take it away. You can’t guarantee the lowest prices and then get beat. You can’t offer the best selection in town and then cut your SKUs in half. You can’t offer superior service and then be like everyone else. Because if your customers become accustomed to something, it becomes an expectation. And when expectations are not met, disappointment follows. And you know what follows disappointment? The desire to find alternatives.
The changes at Southwest that are sparking traveler outrage include: checked baggage fees, a new basic economy fare, modifications to its loyalty program and shifting from open seating to assigned seating—all of which were separators for Southwest.
One comment on Reddit read, “The transformation and death of Southwest and all it stood for is now complete.” Another: “Southwest has become just another airline.” And then there’s this: “Literally the only reason I fly Southwest is because of their free bag policy. Now I have to pay for bags? Nope, see ya later SW.”
Why the outrage over the elimination of the “bags fly free” policy? Because for some, it was the only reason they chose Southwest. “Used to exclusively use them for snowboard trips where I would check two bags. Their routes were not ideal but it saved me money on bags. Now I have pretty much zero reason to consider them.” Southwest Airlines stood out from the competition for decades because it didn’t follow the other major airlines with baggage charges. But they could sit on the sidelines for only so long. The other airlines collectively generated over $54.1 billion from baggage fees in 2023.
Next, the basic economy fares have been a bone of contention for passengers since they were introduced a few years ago. Basic economy is the price you find on search engines, but they are the no-frills fares. You board last, you can’t book a seat, you can’t change your ticket or fly standby, sometimes you can’t even take a carry-on on the plane. It allows airlines to charge for every little thing you’ve come to expect to be included in your fare. It’s frustrating.
“So now Southwest is just like every other airline—nickel-and-diming us for every little thing? I used to count on them for flexibility, but this new basic fare locks me in with no changes and fewer rewards. It feels like they’re punishing budget travelers,” one disappointed customer wrote on Reddit.
Here’s the hook: These changes make the lowest fares less appealing, encouraging travelers to pay more for higher fare options that offer greater flexibility and better rewards. “So now, not only am I paying more for bags, but I’m also earning fewer points for my flights? Southwest used to be the best for budget-conscious frequent travelers, but it feels like they’re punishing us for not spending top dollar,” one frustrated customer wrote on Reddit.
Like the other carriers have done in the past few years, the airline is overhauling its loyalty program, shifting its focus to higher-spending travelers.
But the biggest change involves seating. Southwest was the only carrier to offer the open seating model, and it was the hallmark of the brand. You lined up like you did in elementary school to board the plane on a first-come first-serve basis. Then Southwest started charging $25 to have a better placement in the line. A tall or overweight person did not necessarily get stuck in a middle seat if he or she booked late. Now you are going to pay for preferred seats, like aisles and windows. Southwest says the move responds to customer demand for more predictability when selecting seats. Steve Feldman says the move responds to Southwest’s desire to extract every dollar they can out of every passenger.
Flooring manufacturers experienced something similar when they did away with terms a few years ago, so this is not a foreign concept. The moral of the story: Don’t offer something to customers that you may eventually take away. It breeds resentment and can cost business.
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