When Spirit Airlines ceased operations in May, its customers received little advance warning and extremely limited support. The airline's contact center and digital channels went silent along with its fleet, leaving travelers to fend for themselves in rebooking with other carriers.

For experts, this situation came as no surprise—companies rarely prepare for customer experience during the end-of-life phase of a brand. However, how a company treats its customers can affect the valuation when selling assets, as well as customer retention during the transition.

Experts point out that the right approach depends almost entirely on the specific type of shutdown.

In a full shutdown scenario like Spirit Airlines, customer experience management is usually not a priority, because the customer relationship itself no longer holds commercial value.

Companies in financial distress are often consumed by legal and financial obligations, and customer claims—such as gift cards and loyalty rewards—rank near the bottom of the bankruptcy priority list, said Gianfranco Finizio, partner in the bankruptcy and restructuring group at the law firm Lowenstein Sandler.

"People are embarrassed to realize that in bankruptcy proceedings, customers overnight become creditors... and they are at the back of the line," Finizio said.

Pressure from attorneys general and goodwill considerations may keep gift cards and loyalty rewards usable for 30 to 60 days, but once that window closes, any unredeemed value becomes an unsecured claim with little hope of recovery. How a company communicates this window—including proactively notifying members and setting clear deadlines—is one of the last customer experience decisions a dying brand can control.

Moreover, even when there is no business left to save, customer experience leaders should still strive to deliver a quality experience, because it can affect their reputation and career prospects—a mishandled shutdown could follow them into their next job.

"Even if you no longer have a relationship with customers after the shutdown, there are still many reasons to do your absolute best," said Phil Sager, partner in customer strategy and marketing and M&A at the consulting firm Bain & Company.

Different logic in M&A and rebranding scenarios

In M&A or rebranding, the calculus is entirely different—when the customer base is an asset the acquirer paid for, a poor transition can destroy its value.

Karen Lellouche Tordjman, managing director, senior partner, and global customer experience leader at Boston Consulting Group, believes customer experience leaders should first ask: Is there a gap between the positioning of the old brand and the new one?

If the two brands promise customers a similar experience—such as price points or service levels—then the transition is mainly an execution challenge involving customer data migration, clear communication, and continuity assurance.

However, when positioning differs, companies face tougher choices: which customer segments can be carried over and which cannot.

"Don't handle it too bluntly, or you will face loyalty risk and experience a reset," Tordjman said. "Customers will churn, and they will feel, 'This is not the brand I knew.'"

Additionally, while acquirers are not legally obligated to honor outstanding gift cards or loyalty programs, choosing not to often means starting out with disgruntled customers from day one.

"There is a huge gap between what the law requires and what is necessary to preserve the integrity of the brand and its goodwill," Finizio said.

According to Sager, Hudson's Bay Company is a textbook case of a deliberate wind-down handled well. Last year, the 350-year-old Canadian retailer celebrated its own history, held brand-ending promotions, and accumulated enough goodwill to ultimately sell its brand assets and intellectual property to Canadian Tire for more than $21 million.

Common missteps and operational strain

The list of potential missteps in transitions and M&A is long—from assuming customers will remain loyal to underestimating operational strain.

During a brand transition, customers are "more fragile and more willing to consider alternatives," Tordjman said. Therefore, the acquiring brand needs to clearly articulate its value proposition.

Companies also often underestimate the operational strain that M&A or rebranding places on customer contact channels.

"There is usually a spike in calls and inquiries. Customers start calling because they know the brand is about to disappear, so they want to know what will happen to their accounts, loyalty cards, or bookings," Tordjman said. "You need to manage communication in a way that doesn't let costs spiral out of control, which is why proactive communication is necessary."

Data migration is another pitfall—losing customer history or mishandling consent authorizations during the transfer to the new entity can erode the value of the legacy brand, Tordjman added.

But the most common mistake is this: as pressure builds, teams become overly focused on internal matters, consumed by questions about their own futures. As a result, the customer base—that potentially valuable asset—gets neglected, Sager said.

The most important advice is simple: customer experience leaders facing brand termination need to anticipate how customers will react and plan accordingly.

Or, as Sager put it, brands should "deliver on their promise to customers"—even at the last moment.