The New York MTA - who runs the City's mass transit systems is no stranger to poor customer experience. Its actually ingrained in almost every aspect of their business. And its a vicious cycle...
...which begins with the expectations of the customer. This reinforcing negative customer experience cycle, while different at the nodes, is one that ANY organization can fall into. The Subways offer a dramatic example though so we'll stick with them for now. All customer experiences begin with the expectations customers bring to those experiences. In the case of the NYC Subways, customers expect a clean, safe and on time delivery to their destination. That's it! I'm sure there are long tail expectations as well but for the most part that is it. But if just one customer expectation is missed, the value of the customer experience begins to fall apart. Continuing with the Subway example - the subways are overcrowded. Why? My experience is that there are too few subways running, therefore the cars are crowded, which if you've ever ridden a NYC subway means a delay. A delay as people try to jam into the cars so the conductor can't close the doors. The end result is that the MTA is forced to make continued adjustments to their schedules sometimes sitting in a station just waiting for the stars to align or taking a local train and having it run express. This is extremely destructive to the customer experience. Why? Lets go back to expectations again. Customers expect to a clean, safe and on time delivery to their destination. But when your train skips your stop or goes express forcing you to change trains, one is forced to make an adjustment to one's own commute and very often as a result are late getting to one's destination. So what can the MTA learn from all this?
When a customer's experience is not equal to their expectations, especially when there has been a monetary exchange then a Detractor is born. Not that I can find any real proponents for the NYC Subway system but the MTA is headed down a slippery slope. Eventually the customer population will reach a tipping point, when in fact the customer experience for the money is so poor and the frustration level is so high that customer will revolt. I don't know what form that revolt might take, whether it be a boycott or increased use of transportation alternatives but it will happen.
As in all markets, competition makes for better products and services. But lacking competitive pressure, a monopoly has few incentives to deliver a superior customer experience...and their customers are subject to poor decisions on a daily basis. Competitive pressure is a key lever in the quest for differentiation in crowded markets.