April 5, 2007 – Improving Our Competitiveness by Focusing on the Customer

Hi, it's Glenn, and it's Thursday, April 5.

Succeeding in a highly competitive environment, in any industry, depends on a company's ability to understand the changing dynamics of the marketplace, what their customers value and provide products or services that differentiate them from their competitors.

All of these success factors have one point in common:  they originate outside of the company. To be competitive and sustainable requires focus on external realities, and it starts and it ends with customers -- which companies or brands they choose and to which they are loyal. There is no hiding from competitive marketplace realities.

At United, we're turning our full attention to our customers and to what we must do to build loyalty. We are improving the experience our customers have when they travel or when they interact with us at airports or through reservations or customer service -- knowing that the quality of service during those interactions can determine whether our customers choose United or someone else the next time that they travel.

Perhaps even more important is how we treat our customers when their travel has been disrupted. As you know, we have work underway to improve our handling of delay and weather situations. And, last week we announced that we have moved the Customer Relations organization to Barbara Higgins, our new vice president for the Customer Experience.

I have asked Barbara to join me on the call today to talk about the work that is underway. So, Barbara, once again, welcome to United, and I'll turn the call over to you.

Barbara: Thank you, Glenn. One of the main reasons I came to United is the fact that our airline has such a strong brand, and a great collection of assets – our routes, our fleet, and above all, our employees.  The position was intriguing to me.  Customer Experience is all about providing terrific service for all of our customers and treating them like welcomed guests. 

The fact that our team includes Market Research allows us to apply more science to this approach, sizing the opportunities by looking at the different segments of guests who fly with us.  Now including Customer Relations, we have a direct connection to the voice of our guests.

While aspirationally we'd want to implement initiatives that impact all of our guests, we needed to start somewhere.

It was a natural conclusion to consider our premium guests and to find ways to improve the experience to attract more of these individuals, including our Global Services and 1K guests, as that population is smaller and these guests provide us terrific perspective as they regularly fly on other airlines.

To make a significant difference in both maintaining the loyalty of our current guests and increasing the number of people who would recommend United to someone else, we have to address every touch point in a guest's interactions with us.  It's that terrific service we can deliver, the way we treat every customer as a welcomed guest, which represents the single most important thing we can do to create a competitive advantage.

As you've heard and will learn more about, United Promoters is our new customer satisfaction metric, which we will measure monthly as we do our reliability and other operational goals.  We're setting the bar high for ourselves, measuring our success in meeting this goal by the number of people who say that they are so pleased with our service that they would recommend United to someone else.

With 40 million Mileage Plus members, we know many of our guests have a great sense of loyalty for the United brand.  But that loyalty is fragile, not unlike any consumer brand.  We're only as good as the last flight our guests experience or the last interaction the customers had with any United person from the time they booked their flight to the time they retrieved their luggage.  This is something we all have to remember.

There are always going to be issues to contend with, including difficult weather conditions or, as I am really learning now, Air Traffic Control delays due to increasing congestion.  These factors are outside of our control, and our guests understand that.  Glenn, just as you and Pete McDonald talked about in your message a couple weeks ago, the Customer Experience team and key operating groups are focused on building the technology, the information systems and the standard operating procedures that will enable our employees to help our guests during irregular operations. 

These initiatives will assist all of our guests, as the individuals who travel the least are generally the ones who need the most assistance when things don't go as planned. Premium guests will experience more protection in the event their travel is disrupted. 

As you mentioned at the outset, Glenn, we are excited that the Customer Relations team will now be part of the Customer Experience organization.  Much good work has already been focused on customer relations – when and how we reach out to our guests who have been disserviced – and we have a great opportunity to ensure our responses and outreach are even more timely, genuine and meaningful. 

This week, for example, we have had several successes supporting the Customer Service team at O'Hare with proactive, on-the-spot problem resolution in the case of multiple international delays.  Our challenge is to grow our ability to support flights of note throughout the system, so that the Operations team can focus on the operation while we acknowledge to our guests that we can do better.

I keep saying that while I was at Disney it was pretty complicated to run Space Mountain, but now I've learned, at least all the ride vehicles stay in one place and the attraction doesn't get up and move every few hours!

Seriously, since joining United less than three months ago, I have quickly realized that this airline is not so very different from my former employer, or from any other company whose success depends on treating guests in respectful and rewarding ways.  The key for United will be to think less in terms of transactions and more about personal interactions – being a world-class service provider that just happens to be an airline.

The leadership of Graham Atkinson, as well as the investment and focus United is placing on providing better tools, training and leadership to enable our employees in high guest contact areas through the Customer Service day training as an example, I have a lot of confidence that our path is the right one, and that we will be able to deliver on our promise to our guests.

Back to you, Glenn.

Glenn: Thanks very much, Barbara.

Our customers have a choice of airlines.  Delivering the kind of service that they expect is what will distinguish United and will ensure that our customers are loyal and want to recommend our company to others.

As I said earlier, success starts and ends with the customer and being as competitive and as effective as we can be in the marketplace... every day.

That's all for now on the call. I'll be talking to you again soon. Until then, stay focused on our customers, and of course, on one another... and stay United.