Is Frontier Airlines Our Canary in a Coal Mine?

Despite what I am about to write here I have a lot of sympathy for Frontier Airlines. I can't imagine trying to survive COVID as an airline with huge costs and massive cuts to revenue. I get the pressures that they are under.

Budget airlines have made many decisions that hurt the customer experience, but they are constantly rewarded when people go to buy a flight online. If I can save $300 per ticket I'm in! 6 a.m. takeoff? Yeah, I'll deal with it for $300. $25 to even carry on my bag? OK, I'm still ahead. Middle seat for a six-hour flight? OK, OK, I'll be so sleepy at 6 a.m. that I'll likely nap much of the flight anyway.

There are limits: I doubt that TAP airlines of Portugal cares that I have vowed never to fly them again. It was my vow when they forced me to pay $70 Euros to check a bag that I had carried on for two previous flights with no issue. I'm not planning to move to Portugal, so its not a big loss for them, but how many customers do the carriers lose to these sorts of issues? Not enough, I guess.

Frontier has raised the bar on bad customer experiences with its updated approach to customer service. As a test, I called the support line; it's gone. No interactive voice response system, no way to get to a human. They really do hang up on you after telling you where you can go for online service.

Customer service is now provided online or through a chatbot. If you need help with a lost bag for which you already have a claim you can get a human.If you want to change your flight and you want an agent to help you there will be a charge. Even at the airport, the signs to the check-in counter now include the phrase, "Charges may apply."

Overall, I don't mind pushing people to digital. In the case of Frontier Airlines, I do have one significant concern: For Grandma heading to Salt Lake City from Kearny, Neb., this is going to be a problem, needing to rebook a flight connection after a flight delay is not the time to force Grandma to learn how to use a mobile device. It would keep me up at night to know that I had put my customers in that position.

Honestly, beyond that, I have no issue with digital-only customer service. And a lot of people have been lauding Frontier's push for digital-only service. But I would argue that it is the wrong company for this approach, but here we are.

Where this becomes unconscionable is when it charges to speak with a human. Customer relationships are made in the moments that matter, and charging for support when it's most important means your competitor will be the one providing customer service going forward.

Is Frontier a canary in a coal mine? Are we going to see more cost-cutting for customer service? Happily, most companies don't treat their customers like budget airlines do. But yeah, I promise you this will not be the last of these stories we hear as we enter a recession. When times get tough, many companies go to that great big contact center budget to save costs.& When companies cut customer service costs by 30 percent, customer service is impacted, and in a recession, companies cut customer service costs by 30 percent.

This is when customer service can become a differentiator. There are many ways you can reduce costs at the same time that you improve customer service. Get smarter about who is reaching out to you and why they want to talk to you. Automate what you can but provide quick and smart escalation to an agent when you know it's needed. Containment in self-service is not the only way to save. A smart handoff from self-service to an agent reduces talk time which reduces costs. The companies that find ways to cut costs without hurting the customer experience will see a significant competitive advantage in 2023 and beyond.

Max Ball is a principal analyst at Forrester Research.