Airlines Are Off-Track A basic tenet when stealing market share is not to follow the leader. Rather, it is of paramount importance to be different and better then the competition. Nowhere is that tenant more abused than in todays airline industry. One embattled airline after another clambers to become the next low cost airline believing that "price" is the only means by which customers today can choose. Soutwest No one can, or should, knock the success of SOUTHWEST (SW) Airlines, however, their success in this competitive environment has as much to do with efficiency and process as it does to lower fares. Lets face it; if SW Airlines moves into a new route, they take share away from the other players even as the other airlines match the price of SWs fares. n all of our brand work, no category that we have ever monitored is so desperately in need of a fresh look from both the brand and operations perspective. The dissatisfaction amongst customers is universally (US Domestic Carriers) felt. Yet, each and every airline has decided that the only value upon which customers today will choose is that of lowest price. How is that different and better? United creates TED and US Airways touts itself as giving you more for less. Everyone understands the less but the more seems to be invisible. Changes What has changed in the industry? Quite simply knowledge. 10 years ago airlines were not very competitive one with another. They did not have to be. Fares and schedules belonged to the airlines and travel agents and the information needed to make decisions was easily hidden. Today, through the Internet, all fare information is as close at hand as your computer monitor. It is even possible to choose one over another based on pricein an instant. The airlines acknowledge this and believe that they need to compete in a tug-of- war for the travelers business on the sole equity of lowest fare. After all, from what else is there to choose? This IS the rub - Airlines, with the possible exception of SW, Virgin Atlantic (VA) and British Airways (BA) are all viewed as only commodities, not much different than a city bus but with less leg room! A Lesson Learned Some years ago, BA did a little mathematics and discovered the premium price vs. seating space needed for business class was more than a zero sum game. They converted a good deal of their coach class space into business class space and as a result, revenues soared. In addition, they dramatically improved their brand image of being an airline preferred by business. Today, a similar opportunity exists in the US domestic market. The value equation between legroom, seat size, and cost can be used to steal share yet no airline has taken a look at this. Instead they have chosen to limit service, cut down legroom and seating space and cut costs. Opportunity exists for the brand that recognizes that they can cast a wider net and offer upper class amenities for a fair market price (hats off to Virgin Atlantic). Rather than improving what matters most to customers - comfort, airlines have resorted to frequent flyer programs, which disguise themselves as loyalty programs to maintain a customer base. All one needs to do is listen to the disgruntled travelers in line at the cattle calls that portend to be Gates to understand that most travelers see the frequent flyer program as a quickly tarnishing chain that holds them prisoner to their past travel decisions instead of as a benefit. To many frequent travelers, frequent flyer programs are not seen as a sign of loyalty, but as a forced and unpleasant choice. Similarity Spells Opportunity Where then is the opportunity? It is in open and honest disclosure, better service, higher degrees of comfort and reasonable (not cheapest) pricing. If the value of a brand is to be found in the clarity of the customers ability to see themselves as better for having chosen, then there is ample fodder to differentiate the airline beyond simply cheapest. Airlines, treat your customers as human beings and not as cattle. Offer more (as opposed to claiming more) legroom, service and preferential treatment. Fix the pricing arbitrage. At our Greensboro offices, for example, we can choose to fly from three airports, one 15 minutes away and two others about an hour a way (Charlotte and Raleigh). The Greensboro airport has few direct flights and flies to the Charlotte hub adding a layover to most travel. Because of the security issues today, sometimes it makes time sense to drive to Charlotte instead of taking an inconvenient connecting flight. For that privilege, of driving and hour, taking the same flight that would have been the connecting flight may very well cost twice the fare. Such pricing capabilities erode brand equity and place the airlines in a position of looking like a form of usury. What brand can build equity on that foundation? |
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