Avoiding the pitfalls in leveraging customer data.

I was in a meeting in Dallas when I looked out the window to see dark clouds on the horizon. Armed with my laptop, I monitored the storms around Dallas on weather.com, checked delays at Dallas/Fort Worth International Airport at dfwairport.com, and clicked over to flightstats.com to look up the progress of the aircraft that would carry me to my next meeting in Austin. I was co-hosting a dinner that evening at Dell Inc. and couldn’t risk standing up my partner. Knowing that it was a short three-hour drive to Austin, I drove rather than take the chance of standing up 150 colleagues. Crisis averted! That evening, I shared my story of using information and carrier visibility to avoid travel delays — similar to how Dell uses inbound shipment information to keep its lean factories running.

However, the next day my decision was called into question. I slipped my American Airlines card into the ticket kiosk at the Austin airport, and the kiosk pushed me to a counter attendant. I learned that because I had skipped a segment of my six-hop week of business travel, my entire remaining itinerary was canceled, and I would have to repurchase the remaining flights. It would now cost thousands of dollars to fly from Austin to Seattle for my next meeting. After listening to me plead my case, the attendant looked relieved when I finally asked to speak with her supervisor.

As I waited for the supervisor to arrive, I rehearsed my Seattle speech on building trust in collaborative relationships. Research has shown that service failures like this one can actually build trust if the firm resolves the dispute quickly and fairly. I imagined that the supervisor would see the absurdity of the situation and reissue my itinerary. But after nearly an hour of arguing, begging and pleading, I got little satisfaction. The supervisor informed me that the best he could do was to levy a $100 fine to reinstate my original flight schedule. With minutes to go before my flight, I took the deal and ran.

The ability to harness customer data is proving to be a significant source of competitive advantage for service industries. Initiatives like Amazon.com Inc.’s suggestions of relevant titles based on buying behavior have delighted more than a few customers. And customers will readily share all kinds of information when they see firms using data to enhance their experiences.

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