July 17, 2006 – Improving the Customer Experience

Hi, it's Glenn, it's the 17th of July, and I'm calling from Chicago. Joining me on the call today is Dennis Cary, our senior vice president of Marketing, to talk to us about the work that his team is doing to improve the customer experience.

We have said consistently that we believe there is a value to our customers in delivering a differentiated product strategy and that we believe executing on that strategy will generate superior revenue for United.

Key to delivering on that strategy, however, is our ability to consistently deliver service and an experience that our customers expect. We know we have to improve our consistency in service delivery today, and Dennis and his team are working to ensure that we can create an experience that our customers value and are willing to pay for, together with one that we can deliver consistently from airport to airport.

So, Dennis, I'll now turn the call over to you.

DENNIS:

Thanks, Glenn.

A couple of months ago, when I joined you on the call, we talked about the need to improve the customer experience, and the benefit to the company in doing so.  We talked about the importance of delivering a consistent, reliable experience for all of our customers and delivering a memorable experience for our most frequent business travelers – those traveling in United First or United Business, and our Global Services and 1K customers.

Getting this work right and earning our fair share of these valuable business travelers can mean hundreds of millions of dollars in additional profit for United.

We are not where we need to be today, but we have begun the journey.  We've pulled together folks from many different divisions -- Maintenance, Customer Service, Marketing, Reservations and others -- into action teams to address some of the key customer touch points. The teams are working on check-in, boarding, problem resolution on the day of travel, customer recovery if something's gone wrong and customers tell us after the fact, and cabin condition.

The teams are beginning their work in San Francisco.  We chose San Francisco as the prototype for a couple of reasons.  First, SFO has already begun implementing Resource Optimization and Continuous Improvement.  Now, layering in the Customer Experience work allows us to integrate all of these performance improvements in one place. 

Another reason the team chose San Francisco is that it's the right place from a customer perspective.  San Fran has the highest concentration of Global Services and 1K customers among our hub cities. Focusing our efforts in one station initially ensures that we can develop a successful, integrated set of continuous improvement steps that ultimately can be rolled out systemwide.

We recognize that changing the customer experience is going to mean a lot of modest changes initially, while we are also working behind the scenes on several high-impact improvements.

Both explicitly and implicitly, we make promises to our customers when they fly United.  In talking to our customers, they tell us our promises are fine, but we need to deliver on them consistently.  It's the inconsistency that really drives them crazy.

So, let me give you a couple of examples:

1. 1) One area where we know we are not consistent is during our check-in process.  Interestingly, we learned that two-thirds of the time, our San Francisco-based GS and 1K customers check in using alternative means -- either online, or an EasyCheck-in unit, or curbside Check and Go.  Their goal is to move quickly through the airport, and they appreciate the tools that we've given them to do that.
   
   When they do need CSR support, one of the things that frustrates them is arriving at the premium check-in queue and finding a long line.  What we've found through the work that the team has done in San Francisco is that's often caused by a customer with a long transaction clogging up the queue, and very often that customer actually wasn't entitled to be in the premium queue to begin with.  The check-in team is fixing that.
2. Another example is that we do have premium security lines at San Francisco, but there are times when the lines get backed up and cause customers to have a long wait. Today, the average end-to-end customer check-in time for our premium customers is about 12 minutes (and that's the time it takes to come through the lobby doors till the time they've cleared security).  But it's highly variable.  It can vary from 4 to 90 minutes, and that high variability is a significant issue for our customers, and our check-in team will begin later this month testing some of the suggestions we had from both employees and premium customers on how to resolve that.
3. One final example... We spent a lot of time looking at the boarding process.  As you know, today we give our premium customers pre-boarding. But, unfortunately, we don't always deliver that pre-boarding announcement consistently.  Moreover, as we spoke to our premium customers, they told us clearly that they don't always want to board first.  They'd like to have the option to board at their leisure without the need to elbow through other customers, and still be assured that they're going to have overhead space to stow their carry-on bags. These are the kind of very practical issues we are trying to resolve on behalf of our premium customers.

So again, initially, you will see quite a number of fairly modest changes.  But together these changes will improve how our customers feel about their experience when they travel with United.  These initial changes were generated from talking with hundreds of customer-facing employees in San Francisco and several groups of Global Services and 1K customers.  Employee and customer involvement was critical as we designed these changes.

So, we have the opportunity to deliver an experience to our customers that truly sets United apart from the competition. And doing so can bring a significant benefit to United and our shareholders.

I look forward to the next opportunity to update you in a couple of months about the work that we're doing in San Francisco and how it will roll out to the system.

Glenn?

GLENN:

Thanks very much, Dennis.

Clearly, you and your team are laying the groundwork for the work to be done, fixing some of the basics of our business and improving what our customers experience every day.

When you look at the work that the Customer Experience team is doing, integrated with the other efforts underway in San Francisco, it truly underscores how we're going to run the airline... by institutionalizing a continuous improvement discipline and a mindset in our employees.

Our customers are telling us there are areas we need to do better and the market tells us that there are improvements to make relative to our competitors, and that's precisely what we are going to do.

Doing this work, and making sure that our employees have the tools to do their jobs, ensures we are delivering the service our customers expect, and ultimately will improve our value to shareholders.

That's all for now.  Stay united, focused on our customers and on one another... and I'll be talking to you again soon.