In the airline industry, the difference of a dollar can mean profit or loss. Frontier Airlines has become a leader in evolving to find new ways to save money. While other airlines are charging more for checked bags and in-flight food and beverages, Frontier focuses on their own operations to cut costs and, therefore, charge less for tickets.
Frontier recently eliminated their toll-free phone number, saving the company nearly $2M per year.
“We’re passing along the savings directly to our customers,”Jim Faulkner, Frontier Airlines’ Spokesman said. “Also, we find that most of our customers use their cellphones with free (long-distance) calling plans.”
This grain of truth realized about consumer behavior ultimately saved the airline and the customer a ton of money. In fact, when asked about toll-free numbers, a recent survey conducted by an internal research team at Teckst concluded that most consumers don’t even know how toll-free numbers work, or that companies pay for using them.
Mobile phone pricing plans in the US have continued to decrease over the years, and features such as free long distance and unlimited texting have become standard. Sprint and T-Mobile offer plans that include free upgrades to new iPhones, unlimited everything, and they’ll usually pay for you to get out of your other carrier’s plan. These plans are between $50 and $75/month, and save customers on average $65/month over traditional plans.
Texting has become so ubiquitous that it’s free on the vast majority of plans, including those on budget carriers like Straight Talk and MetroPCS.
As verticals such as airlines continue to cut costs, the next “frontier” to tackle is time. The elimination of $2M/year from the toll-free number made a huge dent in Frontier’s bottom line, and other airlines are sure to follow suit. But the next target will need to be efficiency. Text messaging, for example, is incredibly fast compared to a phone call. Many customers wait on average 15 minutes, and actual talk time between agents and customers industry-wide is around 3 minutes. That actually costs the business $3, plus all the negative impact on the brand due to long hold times.
Texting eliminates hold times altogether. This creates an instant uptick in brand preference, to the utter joy and elation of brand directors everywhere. It’s also incredibly fast. A text conversation can take seconds, and there’s no interruption to the customer’s current activity. Walking on the street, in a meeting, or watching TV at home, customers can text without being a nuisance. Phone calls, on the other hand, are incredibly invasive.
Teckst helps brands like Frontier decrease queues, increase satisfaction, and cut the $3 cost per ticket down to around $.50, a savings of 80% per customer. Teckst also speeds up ticket resolution from 3 minutes to around 20 seconds because texting is so matter-of-fact and to-the-point. It’s this speed of communication that’s made texting the most-used form of communication on Earth.
Be on the lookout for other industries to adopt the Frontier Airlines approach to cost-savings. New technologies will help speed up teams and save money, and the benefits will trickle down to consumers.