Going Outside-In at American makes for a better customer experience.

Managing Expectations, achieving Successful Outcomes and optimising a Moment of Truth.

American Airlines is going all plastic onboard, following the example set by Southwest in 2008.

John Tiliacos, American's managing director of onboard products explains

"From our perspective and from our customers' perspective, it makes transactions smoother for both our customers and flight attendants," he said. "Flight attendants in particular don't have to have correct change when the customer doesn't have the exact amount."

Tiliacos said American believes the change will potentially bring in more revenue, and flight attendants may be able to earn more commissions by selling food on board.

"Flight attendants will print out receipts when requested, a boon for business travelers who need to put in for reimbursement of their expenses. "

This is a fairly important Moment of Truth, so let's examine it.
The 'old' process created lots of work for American, the reconciliation of cash, the processing of the inventory, the interaction with customers and obtaining the correct amount and providing the necessary change, the security of the cash collected, the training of the staff, the hand over of the cash in the airport and so on.

All these sub processes carry a cost, slow things down and create a messy customer interaction. From a customer point of view there are issues related to carrying 'change' (notes or coins, what about security, is it in the bag above, or one of the pockets in my jacket?) and potential inconvenience with other passengers.

This Moment of Truth (MOT) is the Cause of Work, and also a Point of Failure (within the CEMMethod we explicitly identify those) however we can not easily remove this MOT. We can however significantly improve it. Moving to 'plastic only' massively simplifies the interaction, reduces costs and improves service.

The Successful Customer Outcome is an easier target to hit everytime, as we reduce the number of internal handoffs and simplify the associated business rules.

A minority of customers may argue that this reduces customer choice, and they would be correct, however the cost of providing that choice for less than 20% of cash paying passengers is a cost everyone else has to bear in the ticket price. By creating a cleaner 'expectation' the service can be optimised further by offering, say, big ticket items, tracking buyer behaviour (much easier now) and further improving the technology to provide at the MOT related operational information (to encourage more purchases, build affinity, add value to the experience etc.).

This is a fine example of how existing processes can be transformed to 'outside-in' to win that triple crown (simultaneously reducing costs, enhancing service and ultimately improving revenue).

From a customer perspective you are making my life easier, simpler and more successful.
Well done American!

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Contact the author - Steve Towers
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email - steve.towers @ bpgroup.org


  1. I may have missed something here, but how is reducing customer choice making things easier? Well, obviously it makes things easier for the airline who don't now have to worry about handling cash on board. But for the customer this means that potentially their costs increase (If I am flying American from the UK my card will be charged in USD and the credit card company will charge me to make the exchange rate calculation).

    You also imply that this will result in a ticket price decrease - something I sincerely doubt - when you say that "the cost of providing that choice for less than 20% of cash paying passengers is a cost everyone else has to bear in the ticket price".

    Actually when I think about it the only benefit I see to this is that it could potentially increase revenue when people realise they may have to make a minimum size purchase with their credit cards. But enhancing service? Reducing costs? Reducing the number of internal hand-offs? Simplifying the business rules? Not sure I would have signed that business case off had it been presented to me as such.

    You'll have to do better than that to convince me of the benefit of this, Steve. Sorry

  2. Gary, I appreciate that the customer has less of a choice but lets consider how prevalent credit cards are these days. It is significantly easier to hand over your credit card than carry cash in your pocket. Not to mention the constant x-ray screenings where you need to remove everything from your pockets.

    Now lets think about the cost of having cash on board an aircraft:
    1. It needs to be stored somewhere in the airport.
    2. Someone needs to keep it secure
    3. Somebody needs to count it out and in
    4. Somebody needs to securely transport it to the plane
    5. It needs to be secured on the plane, checked out and then checked back in
    6. What happens if it doesn't reconcile when checked back in on the plane or on the ground, what process would the airline need to follow then?
    These are the types of costs we could eliminate using credit cards. By eliminating all this work, the airline is able to reduce the cost of its services which could be passed on to a saving on the ticket price if so desired.