The much maligned airline industry as once again in the news every day; oil prices have put a hurt on the industry that will force major restructuring as a survival tactic - once again - for many of the major players. This begs the question, how are the airlines dealing with customer loyalty through this transition? What can we all learn?

The temptation is to assume "badly" and "not a lot" as respective answers. However, there are insights from their approach. First of all, it's clear the flying public are not enamored with the airlines as a group. The U. Michigan survey results have created some buzz around the topic. I'm not a fan of customer satisfaction metrics as they are too limp a measure of success, but that illustrates the point perfectly. If so few customers are even satisfied (a score of 62 is an historic low) then how many customers are actually promoters? Are their any promoters left for the major airlines?

The real story here is the tactic for dealing with a genuine problem. Nobody doubts that the airlines have cost problems outside their control (oil prices) but their choice of pricing tactics is interested. Afraid of reducing demand, the tactic of choice is to level fees at just about anything they can think of. Seat assignments, luggage, food and drinks of course along with the usual charges for changing tickets etc etc.  Some of these charges will be buried in the fine print.

Will this prove a good tactic? Ultimately, it has the same effect as a fare increase. It's just that the customer only realizes the increase as they progress along the experience corridor with the airline from purchase through check in and actual travel. The airlines hope that customers, like the proverbial frog in the  hot water, will be boiled to death slowly without jumping out of the water.

Except it's not the same as a fare increase, not from a loyalty perspective. In that regard, it's a major negative. Transparent charges are really price increases, so the airlines are focused on "out of sight" charges that the customer only becomes aware of as they travel. Bad profits are usually characterized by unreasonable fees being levied on captive customers - and airline passengers define captivity!

Watch this space. The likely winners of the next decade will be the airlines who play fair with their customers. That means transparency in costs and simplified pricing structures that make sense to the buyer. Develop a reputation as an airline that extracts bad profits rather than an honest deal and expect the backlash down the road. With the exception of Southwest, will we see leadership from others?

In an article in the WSJ this morning (subscription required) the journal points out the eye-popping costs associated with returns in the consumer electronics industry. $13.8bn is the round number they suggest manufacturers and retailers incur as a result of consumers bringing back product they don't want. So what?

Well, what's interesting is the response of the industry. In prior efforts, the classic response was to make it more difficult for people to return product, create barriers, charges etc.This time, the story is different. Only 5% of returns are due to product defects, the remainder being what is often referred to as "no fault found". The real culprit, according to the article, is that the product fails to meet expectations or is too complex to use.

And this time, firms are focusing on the root cause rather than penalizing the buyer. Better technology is clearly part of the answer, but better documentation and customer service/training is seen as a worthy investment. It doesn't seem a radical notion, fix the problem by creating a better experience, but it flies in the face of conventional thinking from the last 10 years where the answer was to view customers who bought products they didn't want, but could neither use them or return them, as just a profitable bonus. Bad profits if ever you saw them.

Oh, and guess what. Returns have a negative brand (NPS by implication) effect and manufacturers are understanding the implications to them. Fix the problem upstream, don't create detractors and don't penalize customers who can't use your products because they are too complex. Good to see firms moving in the right direction.