Friday, May 22, 2015

Southwest Airlines: Monetizing Imaginary Money

Southwest Airlines is a great example of one of those love-hate relationships that just make you crazy. On the one hand, with their unique approach to service, Southwest Airlines revolutionized our expectations of low cost airfare. So often, when you see some of the financial results come out for the various airlines and Southwest is profitable while other airlines struggle, you can't help but cheer. In part it's like, "see, you can be a nice, fun environment with low cost airfares and still be profitable." But regardless of however many quarters Southwest outperforms them financially, they never seem to learn the good lessons and the airline industry as a whole seems to strive for the gold-standard in sucktastic customer experience, the cable company.

But yes, in the midst of all of that, there are aspects of Southwest Airline's service that you want to love. Price is one. Once upon a time, you could hop on a plane to LA and return for under $100. These days, that number looks closer to $200, but it increasingly comes with caveats.

Over the years I've spent many hours in airplanes on many carriers. There have been a few years where my percentage of travel was close to 50% -- not as great as some, but not insignificant. It used to be that there was a certain amount of credit given to seasoned travelers. For most of us that traveled on business, your main goal was a streamlined trip through the airport travel experience. That meant a carry-on because you didn't have time to waste with checked baggage. It also meant your were flexible with your routes; changing flights was no big deal. But when most of the airlines started charging for carry-on baggage, suddenly the overhead space became crowded with Aunt Susie and Uncle Pete's luggage. They didn't care about efficiency, they just wanted to save money -- or they were afraid of losing their luggage.

For business travelers and premier flyers, "perks" like boarding early weren't about anything but getting in front of the chaos that comes with boarding. Aunt Susie and Uncle Pete, meandering down the aisle, trying to find their seat. Putting their bag in sideways because the "carry-on" didn't seem like it would fit. Filling the overhead bin space with bags of snacks and souvenirs that they didn't have room for in their big checked luggage.

Southwest gets lots of these travelers who don't travel frequently. Families. People on vacation. People who may rarely fly. Their system is great if you're one of these travelers, but the chaos sucks for experienced business travelers that benefit from efficiency. No assigned seats means if you arrive for boarding at the last minute, you'll be lucky to find a middle seat in the back of the plane and your bag is probably getting checked -- no waiting around sending those last minute emails before you board. Probably the worst part of that is that you could have probably squeezed your bag in somewhere, but those people filled the bin with sideways bags have taken that space and often the Southwest flight attendants just let the chaos happen.

These are just a few of the reasons why, for business travel, Southwest kind of sucks. If you add in that, in the old days, their was no in-flight entertainment system (admittedly now an extinct feature), as a business traveler I never chose Southwest for long duration business flights. It's one thing to put up with the chaos for a 1 hour flight, it's another thing entirely to deal with that for four hours or more.

I think that this is part of the reason Southwest tried to create a "business class" boarding process and associated fare. Unfortunately, it doesn't really address the issues with late boarding and last minute, it just puts you at the front of the line when they open it up. For most Southwest flights that I've been on since they added it, it's not a time when people are actually getting seats, it's just one more thing that the gate attendant has to say before they begin letting everyone else on board.
Where Southwest Outperforms the Other Airlines
As noted, Southwest Airlines sucks for business travel on so many levels, but they actually do offer certain advantages when it comes to the number of flights. While the traditional carriers like United, American and Delta may offer only two or three flights per day to primary travel destinations, Southwest often runs six to eight flights. Don't want to catch the 6:00 am flight to LAX, take the 8:00am or the 10:00am. You can get Southwest flights throughout the day. When you're planning your departure from your home airport, it's usually easy to predict your schedule, so lots of flights may not seem like a big advantage. But where it is helpful is -- if you know you need to arrive in LA by 5:00pm, you select an early flight, say 12:00pm, and if something happens to delay that flight (incoming flight problems for example), you probably have two or three options for later flights that will still get you to LA in time.

Historically, this has also been true with return flights. If something happens and your on Southwest, there are probably several more flights that day that could get you there -- you probably won't be stuck overnight. As I mentioned in my Twitter posts related to this, in the past, I've also happened to show up at the airport early and been able to get on an earlier flight just because it wasn't crowded and they let me go as standby.

Unfortunately, twice in the last year, I've booked flights on Southwest specifically because of the multiple flight advantage, then managed to wrap up my business and get to the airport early, hoping that I might be able to get on an earlier flight. Both times, the Southwest customer service rep informed me that I couldn't change my flight without paying more than $100. When I wrote about this on Twitter, here's what Southwest Airlines customer service had to say:
and this was their comment on me noting the "no change fees" promotion in the jetway boarding my flight.

With nothing to do in the airport on Wednesday afternoon, I had lots of time for Twitter.

Technically speaking, Southwest is correct. If you're changing the ticket and there is a new corresponding fare and you're not charging something extra to make that change, it's not really a change fee. But while legally your statement may be accurate, as a customer, it feels a lot like a "fee" to change. Put a different way, if you have to argue the nuance of language with your customer as though you are a lawyer, you've already lost a marketing battle, particularly when the nuance involves just how much it's going to cost the customer.

Still, when you drill down into it, the tone underlying this debate is essentially something like this, "you're trying to get over on us." You selected one of our "loss leader" low cost fares, and now you expect to be entitled to all of the 'privileges' associated with our airline. By "switching" from one flight to another "not full" flight, you cost us. Parenthetically speaking, what does this change cost? It costs the potential to charge the increased far that you would have paid if you planned to make that change. In other words, it costs imaginary money.

On Wednesday, when Southwest didn't want to change my flight and put me on standby on one of two earlier flights, they saved themselves $200 of imaginary money. $200 that I didn't spend, $200 that they didn't make, and $200 that they didn't lose by just making the change for free.

But if that's not bad enough, here's why Southwest sucks for business travel. Here's an example snapshot from my corporate travel engine. I picked a Tuesday in June for an example "trip" to LAX. As you can see from the screenshot, I have a couple of options (I limited them to Southwest between 10:00am and 1:00pm for simplicity).
If you were booking through the Southwest Airlines web site, you'd see this fare as a Wanna Get Away fare -- the fare with no changes available. But, from the corporate travel engine, it's just another flight. You can dive into the terms, but there's another factor here -- the corporate travel engine just looks at the price, $148, and bases policy calculations on that number. Want flexibility? That fare isn't shown and, if it was, it would be out of policy because this fare has set the baseline.

Then again, we should be happy that Southwest fares are even displayed. For years, if you wanted to book Southwest, you had to go outside of this system and jump through corporate hoops just to select them.

So congratulations Southwest Airlines. You're watchful management of my airfare has saved you hundreds of imaginary dollars over the past year and all you really lost was the "happy" that used to be connected with the "customer" when you described me.

Tuesday, May 19, 2015

FedEx Flounder: A Tale/Fail of Two Shipments

So the latest company to seriously piss me off is FedEx. While to a certain extent, shippers are like airlines -- it's all good until the screw up, but they all screw up one time or another -- what distinguishes a shipper (or should) is how they handle their screw up. Fed Ex choked this one pretty hard, but UPS failed so bad the last time, that I still haven't intentionally shipped anything with them since. For me, this is probably the only thing driving any loyalty to Fed Ex.

On to the story...
On Friday, we ran by the Fed Ex office in Sunnyvale to drop off a couple of shipments. It was after lunch, but early enough to avoid the shipping cut-off rush. We had two shipments going out, one box of samples bound for Atlanta and being sent cheap shipping, and four boxes of items that needed to be delivered on Monday for a conference / tradeshow. This would be our booth, brochures, equipment, the usual stuff. Normally, for this type of thing, the event often starts on Tuesday, but this is one of those events with a reception on Monday night.

I arrived in the afternoon on Monday, planning to set things up before the 6:00pm start of the reception. My booth and such hadn't arrived. After checking with the hotel bell desk and trying to track things down, I eventually looked up the tracking info. It looked like it was scheduled to be delivered by 4:30. The status confirmed that it had already arrived at the airport. I went back to my room to deal with email and wait for 4:30.

As I got close to 4:30, I began checking the FedEx site to see if delivery had been confirmed, but nothing. I went to the bell desk to check again. Nothing. Finally, I called FedEx (it seems like it's become more difficult to find a phone number for them these days). When I finally got them on the phone, it became clear that it would be delivered by 4:30... on Wednesday. WTF?!?

I got through to a customer service person. I explained the problem. Her answer -- sorry, we can't do anything. It shipped on Express Saver and it's not scheduled to deliver until Wednesday. She said that they couldn't do anything to expedite it or deliver it sooner because it was already at the airport in a large container and that nobody knew where it was. I tried again to explain the urgency and request alternative solutions. No answers. I was hosed and she didn't want to offer me any alternatives.

It took me a couple of minutes to calm down. I won't share with you the words I used to describe FedEx at that time, but let's just say they had me channeling my driving in traffic with idiots vocabulary. Thinking quickly, I contacted my Fiance and my office. My fiance offered to help get stuff together and run it to FedEx if I thought it would help. I asked her to head over to my office, then contacted my office to let them know she was on the way. Then I spoke to one of my colleagues -- a sales guy for a different business unit than the one on display at the conference. Thanks to a Facetime video call, I was able to talk him through collecting up materials from old versions of the tradeshow booth so that I could build "Frankenbooth". He packed it up and then he and my Fiance raced it over to the local Santa Clara FedEx office to drop it off for First AM shipment before the cut-off.

Frankenbooth arrived early this morning. I still didn't have my brochures or product samples, but at least I was able to build a backdrop. I still had a problem though. FedEx wasn't planning to deliver my shipment until Wednesday by 4:30, but the show was over Wednesday morning and I was scheduled to leave before they ever delivered the booth. I decided to take one more shot at getting help from FedEx customer service.

With my second call, tracking informed me that my packages had been delivered to the local substation and were scheduled for deliver tomorrow by 4:30. I explained to the customer service agent that I wouldn't be here and needed them to send my packages elsewhere. He informed me that if they rejected the shipment, it would be sent to New Hampshire, the address listed on our account. Ultimately, we decided to reroute the shipment back to our offices in Santa Clara. He also mentioned that additional charges may apply.

Now here's the thing. I'm pretty sure that the reason why everything arrived late is that the clerk at the FedEx office entered the wrong class of service because she was confused by the first box she processed. And I understand that they are unwilling to do anything to "speed up" the shipment -- even though they clearly had enough info to move my packages closer today. But considering that I just paid a premium to ship a replacement here First Overnight, the idea that you want to charge me, the customer, for returning the original packages since you couldn't do anything about getting them to me when I told you that I needed them by.

At the end of the day, the reason why I use FedEx is because, when we had a similar situation with UPS, they had no idea where the package even was. It was somewhere between here and there, even though it went here and back to there while it's other buddy-packages were delivered. In this case, FedEx knew where the packages were and the packages were all together, but armed with that knowledge, they didn't want to do anything. Overall, I would rate this as their infrastructure working, but a customer service FAIL.

Sunday, May 10, 2015

Big Star Documentary:Journey to a Place You Probably Won't Understand

Netflix streaming service is a funny place. There are a ton of things to watch, but at the same time, it's kind of like watching last year's cable TV -- lots of channels really equates to a ton of things that you don't want to watch; but they are playing all of the episodes of that WB show that you never considered watching when it was on.

Having just finished binge-watching whatever show it was, I was browsing through the Netflix muck looking for something to watch when I happened upon this documentary about the band Big Star.

For me, it was one of those awesome trips down memory lane. It's loaded with interviews with key figures in the Memphis music scene -- not the Sam Phillips / Sun Records / Elvis scene, more the It Came From Memphis scene. Without specifically saying it, this movie connects to the difference between what rock and roll was and what it has become. You can learn a lot about music in between the lines in this movie.

Thursday, May 7, 2015

Weird Fail: Microsoft Excel Brings Entropy to Simple Data Manipulation

I came across this weird issue with Microsoft Excel. I was in the middle of a project where I was updating a lot of numbers in a database. I had a list of specifications stored in a MySQL table, My friendly neighborhood product engineer provided me with a associated specifications listed as a range of numbers like 126.025 - 126..050. A couple of days later, it became clear that my friendly neighborhood product engineer hadn't actually looked at the existing spec table and that the number already existed. So he decided that he just wanted to add tolerance information to the existing number.

Predictably, what I received from the engineer could be calculated by the base formula Number_of-Specs X Effort_Engineer_Willing_to_Spend_Producing_Equivalent_Number (Lots x 0). After thinking about the problem, I realized that I should be able to manipulate the data in Excel and extract the tolerance info -- inertia can be a powerful force in engineering problems.

First, I began by extracting the numbers one each end of the range cells using a combination of new columns and left and right formulas. After I had two columns of individual numbers, I subtracted one number from the other and I now had a column of tolerances. I copied these numbers, then replaced them with the resulting values using "Paste Special - Values". Then I began preparing to import my new tolerance numbers back into MySQL, when I noticed an issue:

While Excel displayed the result as 0.025, when I looked at the underlying data in the formula bar, I saw 0.0249999999999915. WTF?

It's true that 0.0249999999999915 looks a lot like 0.025, but it is not 0.025. For mathematics and calculation, it may be similar, but it is not .025. At first I thought I had done something wrong, accidentally deleted something unintended or otherwise messed it up. But then I did some more tests and produced the same result. Next I thought, "great, my Mac has one of those Pentium errors." I tested on different systems with different processors. Same issue. I tested different versions of Excel. Same issue. I even tested a Bootcamped Mac Mini running Excel in Windows XP. Same issue.

Binary Numbers and Floating Point Precision Errors
In doing a bit more research, I came across issues where it's noted that Excel has issues with accuracy because it stores numbers as binary. Typically though, this tends to impact numbers at 15 figures of precision. In this case, my numbers were -- at least on the surface -- pretty simple.

Here's my best guesses at root cause:
  1. This binary number issue impacts numbers more significantly than the 15-digit binary issue.
  2. Microsoft is taking in .0000000000000085 on each transaction. Similar to the Superman / Office Space strategy, this percentage will enable them to profit some way.
  3. Microsoft has successfully generated an Entropy simulator that operates in the background in Excel. Where did you're data go? Entropy.
Needless to say, it's left me skeptical about using Microsoft Excel for some of these data manipulation tasks.