The news as of the first coffee this morning, and the music is Eric Dolphy's great Out To Lunch CD:

My family plans to travel from Istanbul to see family in America for Thanksgiving. So a couple weeks ago we searched out plane tickets online, using Expedia, Travelocity, the usual suspects. We settled on buying our tickets via Orbitz, a company we've never used before. But we hadn't heard any reason not to use them.

Not because of any problems with the other companies, we've used them and have been satisfied with their service. When I went to Munich a couple months ago I used Travelocity, when my wife and I went to Slovenia last month we used Expedia. Sure they had good prices, but customer service matters to us as well.

This time we found the best price through Orbitz, so we bought our tickets, a little over $3,000 for a family of five, which isn't bad for five round-trip tickets between Istanbul and Washington, D.C., but for us it's not chump change either. We weren't expecting any customer service issues to arise, but as I said, we'd never used the company before.

In other words, they had the opportunity to delight us with their service, show us they valued us as customers, win us for repeat business and establish a level of loyalty. Orbitz had their CRM Golden Opportunity #1 to delight us as new customers, but they skunked it. Badly. But they still have a chance:

We booked round-trip flights on Alitalia -- Istanbul to Milan, Milan to Boston, Boston to D.C. Returning it's Washington-Atlanta, Atlanta-Milan, Milan-Istanbul. We leave and arrive at reasonable times, no 4:00 a.m. flights. Orbitz charged our credit card, which meant, we assumed, that we had the seat confirmations Orbitz offered at that price.

We like it that Orbitz lets you go into the seating charts for the flights and pick your seats. Traveling with young children that's important, we picked seats together, of course. We haven't seen that feature on all online travel sites, it's a good added value offering.

Looking over our flight itinerary -- Orbitz also does a good job listing out flights and confirmation status clearly and easily -- we noticed the flights from Atlanta to Milan weren't confirmed, the seating was "pending." My wife figured she'd forgotten to pick the seats, carefully followed all the procedures for doing so and re-entered the information.

After a couple days there was still no confirmation. Puzzled, she sent an e-mail to the customer service address on the site, which said that they respond to inquiries in three hours. No response, days later. She tried reserving seats on the flight again, noting that there were fewer available now. Naturally this caused stress for us.

Still no confirmation from Orbitz, which had already taken our money for the tickets, but which had not provided the confirmed seats they had promised in exchange for the money. This was now a full-fledged customer service problem.

A couple days ago I wrote an e-mail to Orbitz's three-hour response address, clearly -- and nicely -- laying out the issue: You've taken full price out of our credit card, but you haven't provided the service you promised. We're still not confirmed on the crucial trans-Atlantic leg of our return trip, and as wonderful as the Atlanta airport is, we don't want to live there. Please provide the service you have already accepted our payment for.

No response. Not even an automated "we received your e-mail" kicked back. There are even fewer seats available now, we've noticed, and not five together anymore, which means some poor citizens are going to have to sit next to individual children. Now we're not only stressed over missing our flights we've paid for, but over whether Orbitz gives a damn or not, or is even going to do anything to solve the problem they've caused us.

So now Orbitz's terrible customer service has put them in a particularly tetchy place, that of satisfying a dissatisfied customer. It's also a prime place for cementing customer loyalty: Resolving customer complaints in a manner to win the customer is one of the most powerful aspects of good CRM; there are few areas of customer service so rich in possibility for building customer loyalty.

First Coffee remembers CRM veteran Dick Lee telling a story about when he was traveling he stayed at a well-known upscale chain's hotel, and had a problem at checkout, and the property's manager took personal care of the issue, resolved the problem, and pleased Dick to the point where Dick would stay at the chain again. I asked how the manager knew he had a problem.

"I was standing at the front desk screaming," he said.

In other words, a dissatisfied customer stood at its front desk, but a satisfied customer walked out -- and back in the hotel chain again. It's an axiom of CRM that one of the best times to win customer loyalty is in this situation -- when there's a problem. Resolve the problem in a manner that shows you value the customer, that you're willing to do what it takes to please aforesaid customer, and odds are good that you will impress and keep that customer. Blow it for the sake of a short-term savings and kiss the long-term customer profits goodbye.

CRM consultant Skip Liebman notes, "say the wrong thing to a dissatisfied customer and the encounter can turn from bad to worse in a few seconds. In today’s competitive environment, whether face-to-face or phone-to-phone, the key to increased sales is maintaining good relationships with all customers including the most challenging customers." As well-known wise man and customer service expert King Solomon wrote in Proverbs, a word fitly spoken is like an apple of gold.

True. And how much more so when the problem isn't the customer's but the vendor's. Who knows why Orbitz didn't give us the confirmed seats we paid for? Lots of things could have gone wrong, I understand that. But now, having pointed out the problem to them, I expect it to be corrected. If they do a good job correcting it I'll certainly book travel with them again. If they don't, I -- or you -- would be an idiot to use them again.

Customers understand everyone makes mistakes, we don't expect perfect service. We do expect mistakes to be corrected, especially mistakes which are the company's fault which cost us money. Like about $3,000 and a trip to America to see family over Thanksgiving. There's a lot hanging in the balance for both us and Orbitz. See, in CRM, the problem isn't the problem. How you handle the problem is the problem.

A few years ago Ritz-Carlton got it and authorized any employee to make any decision costing up to $2,000 to solve any customer issue on the spot, no "Gee, let me pass this on to the manager and we'll get back to you" garbage. That new policy pleased a lot of customers and won Ritz-Carlton a lot of customer loyalty. The policy itself was cited in the Ritz-Carlton's 1999 Malcolm Baldridge National Quality Award.

Because in CRM price isn't all that matters, even when you're in a business like online travel, where price is frequently a prime consideration. Dick Lee has also told me about his "Anybody But Northwest" flight policy, and other people have told me they would pay higher fares to fly favored carriers -- Continental and Southwest, among others. 

That's the category my family falls in. Sure price is a factor, even though we're getting silly rich working for TMCnet, of course, like everyone else here is -- you should see Tracey Schelmetic's new heliport at her place in Greenwich -- we still like to save a nickel here and there. But only up to a certain point.

Because customer service matters. My wife is from New Zealand so we fly there on occasion, and if Emirates Air costs a few bucks more than a lesser airline, we'll pay the extra and fly Emirates. The bigger the price tag the less small differences in price matter and the more good customer service matters, and we like Emirates' customer service.

So now Orbitz has CRM Golden Opportunity #2: Solving a customer service problem in a way that turns a disgruntled customer into a loyal customer. Not receiving the confirmations we paid for is turning us into stressed, screwed over, dissatisfied customers of Orbitz -- and the one thing they'd better not do is say "Contact the carrier" or some crap like that. The carrier didn't ding our credit card.

So we'll let you know how things progress, and if Orbitz has successfully practiced good CRM and, practicing proactive customer service, taken advantage of a crucial opportunity to transform a dissatisfied customer into a loyal customer. Stay tuned.

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