Arnie WeissmannWhen setting corporate goals, its hard to imagine that a CEO would sit down with a management team and say, Lets focus the companys time, resources and energy to ensure that we give bad customer service. But you sometimes have to wonder.

Delta Air Lines, a company facing overwhelming financial problems, also found itself facing evidence that a notable portion of its passengers felt they were receiving inadequate customer service when speaking to its cost-efficient call centers in India. The issue became a popular topic on Web sites visited by frequent flyers.

Deltas initial reaction was, in many respects, extreme. They sent an online survey to select frequent flyers asking if they were willing to pay a fee to have their calls routed to a reservations agent in the U.S. instead of India.

It was extreme in its tacit admission that it was considering the continuation of what was regarded as low-grade customer service if a passenger wasnt willing to pay an additional fee. It further implied that Delta might not be willing to shoulder customer service costs for even its best customers.

To get to that management philosophy, the airline must be convinced that desperate times call for desperate measures. In 2003, Delta claimed a savings of $25 million per year in moving its call centers to India. Though this represented a savings of a little under a fifth of 1% of its total operating expenses, that incremental savings cut its losses a significant 3% (it lost $773 million rather than a potential $798 million).

But I suspect Delta will pay a much dearer price than the cost savings represent. Its profitable, low-cost rivals are riding on a tidal wave of passenger love (JetBlues slogan is We like you, too.) Deltas management, it would seem, is playing into their hands.

The Wall Street Journal is reporting that Delta is considering service extras such as leather seats on long-haul routes, also at a premium price. Something comfortable to sit in as you mull over your resentment about bad customer service.

At the other extreme, I recently met Marcello Pigozzo, CEO of Caribbean Clubs International. This is the company that owns The Beach House in Barbuda, a 21-room property aimed at the upper-tier of luxury travelers. He is in the enviable position of putting customer service at the center of his business, rather than viewing it as a cost to be managed.

Every time a customer has to sign his name or fill out a form, he is working -- doing something to make our life easier, not his, Pigozzo told me. The guest is supposed to be on vacation -- we are supposed to do the work.

He has extended this philosophy into every aspect of the hotel that he can think of.

A guest doesnt stand in line at reception because there is no reception -- guests are simply shown their rooms by service ambassadors.

They leave clothes to be laundered in a pile on the floor -- the staff sorts and counts it. Guests ask for a drink, receive it, and drink it -- no need to sign for it.

And if theres a billing dispute? Pigozzo shrugs. We take it off the bill.

In Pigozzos case, market conditions allow him to act in an extreme manner -- he is in a position to command a price that makes it possible to put customer service first. Likewise, Deltas market conditions allow it to act in an extreme manner that would not otherwise be thought tolerable.

Neither, of course, has to take the path each has chosen. Pigozzo could run a profitable company with a little less attention to its customers. And perhaps Delta could run a profitable company with a little more.

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