Yes. You read that title right.

I’m aware that airlines are not known for their customer responsiveness. Ask anyone whose been trapped on a plane on the tarmac for 14 hours. You know you’ve really dropped the ball when Congress (which agrees on almost nothing) passes a customer bill of rights explicitly for your industry.

Air Canada, however, increasingly seems to be the exception to this rule. Their recent response to online customer feedback is instructive of why this is the case. For governments interested in engaging citizens online and improving services, Air Canada is an interesting case study.

The Background

Earlier this year, with great fanfare, Air Canada announced it was changing how it managed its frequent flyer reward system. Traditional, it had given out upgrade certificates which allowed customers who’d flown a certain number of flights the ability to upgrade themselves into business class for free. Obviously the people who use these certificates are some of Air Canada’s more loyal customers (to get certificates you have to be flying a fair amount). The big change was that rather than simple giving customers certificates after flying a certain number of miles, customers would earn “points” which they could allocate towards flights.

This was supposed to be a good news story because a) it meant that users had greater flexibility around how they upgraded themselves and b) the whole system was digitized so that travelers wouldn’t have to carry certificates around with them (this was the most demanded feature by users).

The Challenge

In addition to the regular emails and website announcement an Air Canada representative also posted details about the new changes on a popular air traveler forum called Flyertalk.com. (Note: Here is the first great lesson – don’t expect customers or citizens to come to you… go to where they hang out, especially your most hard core stakeholders).

Very quickly these important stakeholders (customers) began running the numbers and started discovering various flaws and problems. Some noticed that the top tier customers were getting a lesser deal than ordinary customers. Others began to sniff out how the new program essentially meant their benefits were being cut. In short, the very incentives the rewards program was supposed to create were being undermined. Indeed the conversation thread extended to over 113 pages. With roughly 15 comments per page, that meant around 1500 comments about the service.

This, of course, is what happens with customers, stakeholder and citizens in a digital world. They can get together. They can analyze your service. And they will notice any flaws or changes that do not seem above board or are worse than what previously existed.

So here, on Flyertalk, Air Canada has some of its most sophisticated and important customers – the people that will talk to everyone about Air travel rewards programs, starting to revolt against its new service which was supposed to be a big improvement. This was (more than) a little bit of a crisis.

The Best Practice

First, Air Canada was smart because it didn’t argue with anyone. It didn’t have communication people trying to explain to people how they were wrong.

Instead it was patient. It appeared silent. But in reality it was doing something more important, it was listening.

Remember many of these users know the benefits program better than most Air Canada employees. And it has real impact on their decisions, so they are going to analyze it up and down.

Second, When it finally did respond, Air Canada did several things right.

It responded in Flyertalk.com – again going to where the conversation was. (It subsequently sent around an email to all its members).

It noted that it had been listening and learning from its customers.

More than just listen, Air Canada had taken its customers feedback and used it to revise its air travel rewards program.

And, most importantly, the tone it took was serious, but engaging. Look at the first few sentences:

Thanks to everyone for the comments that have been posted here the last few days, and especially those who took the time to post some very valuable, constructive feedback. While it’s not our intent to address every issue raised on this forum on the changes to the 2011 Top Tier program, some very valid points were raised which we agree should be addressed to the best of our ability. These modifications are our attempt to do just that.

Governments, this is a textbook case on how to listen to citizens. They use your services. They know how they work. The single biggest take away here is, when they complain and construct logical arguments about why a service doesn’t make sense use that feedback to revise the service and make it better. People don’t want to hear why you can’t make it better – they want you to make it better. More importantly, these types of users are the ones who know your service the best and who talk to everyone about it. They are your alpha users – leverage them!

Again, to recap. What I saw Air Canada do that was positive was:

• Engage their stakeholders where their stakeholders hang out (e.g. not on the Air Canada website)
• Listen to what their stakeholders had to say
• Use that feedback to improve the service
• Communicate with customers in a direct and frank manner

Air Canada is doing more than just getting this type of engagement right. Their twitter account posts actual useful information, not just marketing glop and spin. I’m not sure who is doing social media for them, but definitely worth watching.

There’s a lot here for organizations to learn from. Moreover, for a company that used to be a crown corp I think that should mean there is hope for your government too – even if they presently ban access to facebook, twitter or say, my blog.

Big thank you to Mike B. for pointing out this cool case study to me.