Customer Loyalty as a Stabilizer During COVID-19

Lessons on customer loyalty from airline stocks & NPS during the H1N1 pandemic

As the world sits in apprehension for what may result from COVID-19, LeagueSide thought it’d be valuable to take a lens to pandemics past to not only understand how businesses were impacted, but also why certain businesses fared better than others. We were particularly interested in understanding how customer loyalty played a role in stabilizing business volatility, and consequently, we examined how airline stock prices varied over the course of the H1N1 pandemic of 2009.

Given that every industry is being impacted in some way by COVID-19, we find it important to communicate that even in times of uncertainty, there are still things in your control that you can do to help mitigate the long-standing consequences that your business may face as a result of this current pandemic. As such, we encourage companies to take a deep look at how they can proactively provide new value to their customers, as those that make short-term economic sacrifices to build long-term loyalty may find themselves a few steps ahead of their competitors when the world returns to its normal operating state.

TL; DR: the airlines with higher Net Promoter Scores (NPS) experienced less severe fluctuations in their stock prices than those with lower NPS.

We chose airlines for three reasons: (1) their businesses are sensitive to pandemics such as COVID-19 and H1N1, (2) we were able to find a reasonable NPS benchmark from a 2014 US Consumer Airlines study that surveyed over 2,300 US consumers, and (3) we could access the stock prices for five of the airlines included in that US Consumer Airlines study.

We chose NPS because it is arguably the closest standardized measure of customer loyalty. Medallia, a leader in customer experience management, defines NPS as, “a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.” In short, a higher NPS reflects a deeper sense of customer loyalty to a given brand.


In an ideal world, we would have obtained the NPS of these airlines from 2009-10, but we had to make do with the scores from 2014. Although the scores have likely changed from year-to-year, we’re making the assumption that these scores relative to one another were the same (Southwest & JetBlue had the highest, American & United had the lowest). Of the airlines included in the US Consumer Airlines study, five were also publicly traded on the stock exchange at the time of the H1N1 outbreak.

These airlines and their corresponding NPS from the study include Southwest (62), JetBlue (56), Delta (21), United (10), and American (3).


The CDC compiled a timeline of the H1N1 2009 pandemic on their website here. Their timeline for the virus spans from April 2009 to August 2010, and they categorized the pandemic into three phases:


The chart below shows the percent increase/decrease from month to month for the adjusted close stock prices of JetBlue, Delta, American, United, and Southwest. The data was taken from Yahoo Finance.

Airlines such as United and American experienced — on average — greater percent changes (higher/lower peaks) than JetBlue and Southwest. Delta typically found itself situated in the middle of the pack in terms of stock price changes, although it did have some spikes of greater volatility.


Stocks 101 states that a stock price changes as a result of changes in investors’ confidence levels for that stock. If investors, as a whole, feel less confident about a stock, then it’s likely that we’ll see a decrease in that stock’s price; the same is true for when the opposite happens.

The greatest negative percent change in Phase One occurred when estimated cases of H1N1 reached 1M cases. It isn’t telling from the CDC data as to why we saw significant percent increases after the first major decrease in the summer months, but a couple of theories are:

  • Airline travel peaks during the summer months when kids are out of school and families have vacations planned. It’s possible that the concern of the H1N1 virus wasn’t significant enough for families to change their already-established travel plans.
  • Airlines may have taken corrective actions during the summer months to promote cheap flight specials to incent buyers to “get away quickly at a low cost.”

The greatest negative percent change in Phase Two occurred in October, when H1N1 activity peaked in the U.S. Although the stock prices fluctuated from November through March, the majority of the stock price changes were all positive (above the 0% benchmark). These positive changes in stock prices may be attributed to the H1N1 pandemic becoming less severe, as evidenced by schools not closing in November, clinical trials showing excellent immune response of vaccines, and vaccines becoming publicly available to all in December.

The interesting thing about this data is that the airlines with higher Net Promoter Scores experienced less stock price volatility. For example, JetBlue scored an NPS of 56 in the 2014 Consumer Airlines survey and had a standard deviation of 0.567 for its changes in stock price. United, on the other hand, scored an NPS of 10 and had a standard deviation of 7.338 for its changes in stock price over this same time period.


The fact that the airlines with higher NPS experienced lower stock price volatility may be attributed to the commoditization of loyalty that we’ve seen across the airline industry: one can receive airline miles for purchases on credit cards, one can board the plane first if a preferred member, one can check a bag if a bronze member or higher, etc. In other words, those who are loyal to an airline are likely going to do business exclusively with that airline. Conversely, those who have no loyal ties to an airline will choose their airlines based on other factors such as convenience, price, trip duration, etc.

Going back to Medallia’s definition of NPS being reflective of a customer’s loyalty to a brand, JetBlue and Southwest’s higher NPS likely resulted in lesser fluctuations in their stock prices because their customers were more loyal than those of American and United.

Therefore, in times of crisis, brands whose customers are more loyal may be able to breathe more easily than brands whose customers are less loyal. This is because brands with higher NPS can be assured that they’ll see their customers again once a crisis has ended. Conversely, brands with less-loyal customers will go back to the battleground of once-again fighting for new customers’ business.


There is so much that is out of our control regarding COVID-19, but one thing that is in our control is how we strengthen the relationships with our current customers. Most businesses will look at this process as one that’s conditional. For example, refunding hotels, flights, or tickets because an event has been canceled.

LeagueSide believes that the businesses who look to strengthen their relationships with customers unconditionally are the ones that are binge-worthy. For example, look at CVS Health and how they are waiving home delivery prescription fees amid precautions around the Coronavirus. With this move, they may lose short-term revenue but win long-term customers and newfound customer loyalty.

It’s important in times of uncertainty to think through ways in which you can build stronger relationships with your customers by unconditionally supporting the causes, beliefs, and things that matter most to them.

At the end of the day, people support businesses that support them. And in order to support the people that you’re looking to win over, you must put the decision of doing good before doing well. This decision isn’t one that will be clearly defined by a few formulas in an Excel spreadsheet, but rather one that encompasses many factors, the most important of which is that “gut feeling” of knowing that this is the right thing to do.

To understand how to evaluate the ROI of making these decisions, as well as learn more about how LeagueSide can help your business build newfound loyalty among your customers, please contact [email protected]