Lessons from the sky: Build your client base with experience differentiation
By Joe Anzalone
Asset Marketing Systems
As independent business owners, it's often enlightening to consider case studies and success stories from the business world, especially those from challenging industries that operate under volatile conditions. Is anything more difficult than building and maintaining a successful and profitable airline? Consider this:
Airline A is an established American icon, boasts a 75-year track record, as it was founded in 1931, during the golden days of American aviation. It offers such amenities as first-class seating with free cocktails, upgraded economy seating for a reasonable price and routes that bring customers to virtually every major city in the world. It has one of the industry's best safety records. Its reservation system is very convenient because Airline A can be found on virtually all Internet travel sites. Finally, it has formed strategic partnerships with 15 other airlines around the world; as a result, its frequent-flyer program has been consistently ranked in the top three for customer satisfaction.
Airline B was founded in 1971, and for the first several years after its inception, it only offered routes in the state of Texas. Since its expansion, it now offers routes to most major American metropolitan areas, but some are highly inconvenient. Fly to Boston? Sorry, you'll have to go to Providence, RI instead, and then drive 65 miles to Boston. Fly to San Francisco? Well, yes and no -- you'll have to go through Oakland first. When you hold a ticket at Airline B's gate, you don't know where you're going to sit, because there is no reserved seating. If you're lucky enough to hold a ticket in the first seating group, it's best to arrive at the gate early to avoid waiting in a long line -- most passengers are forced to stand in line an hour before takeoff to ensure a decent seat. There is no first-class seating, and Airline B's reservation system does not interface with any Internet travel sites. You need to take the extra step of visiting their Web site to book your vacation.
So, which airline would you rather fly? Before you answer, consider one more fact about both companies: from 2002 to 2006, Airline A experienced the largest and longest bankruptcy restructuring in the industry's history.1 Airline B is one of the world's most successful and profitable airlines, posting a profit for the 35th consecutive year in January 2008.2
By now, you may have realized that Airline A is United, and Airline B is Southwest. The reasons for their respective business struggles and successes are complex, but Southwest's story will stand as a case study on how to acquire and maintain a client base by offering that which is different.
It's those differences that the consumer is buying. Yes, Southwest's fares are low, but discount branding alone is not enough to keep an airline in the sky (as the 2006 demise of Independence Air demonstrated.) Rather, it is Southwest's fare service that is truly different. It purposefully features one-way flight options and several fare selections for the same flight, encouraging the consumer to mix and match choices. Their flight crews often perform their own comedy routines during their FAA-required security briefing as each plane taxis toward the runway. And Southwest made a conscious decision to focus its efforts on addressing those typical airline mishaps that most frustrate travelers -- flight delays and lost baggage. Southwest's ground crew can turn a flight around in 20 minutes -- a vast improvement over the industry average -- and it offers special incentives to its ramp staff. Conventional luxuries have been jettisoned: "To have opted for a first class, business class or any form of luxury class seat would have been excess baggage; most people would prefer to do without it if it meant cheaper ticket prices."3
Clearly, the client has spoken, and it sounds something like this: "Just get me there on time, have my bag waiting and make the flight go by a little faster. I don't need a reserved seat or an extra bag of chips."
The case of Southwest demonstrates important facts that can be translated into our industry:
1. We are in the service industry. The client is paying for an experience, not the product we deliver, so we must do everything in our power to enhance that experience.
2. The client's idea of what that experience should be may be different than ours -- probably more different than we think, and perhaps easier to deliver.
Turn to your own company -- particularly your own client base -- and ask yourself the following questions:
1. Who is my client?
2. What service do I deliver them?
3. Am I sure the results are what my client wants?
4. Is there a way I can deliver that service in a different way?
1. Don't assume anything. What your client wanted or needed in the past may be outdated.
2. Understand your client. Use probing questions constantly.
3. Everyone is intrigued by the unique. If you have something your competitor doesn't, focus on that. In that conversation, the competition becomes irrelevant.
4. Don't be afraid of new ideas. If you have a service concept that seems unusual, consider it anyway.
5. Study every point of contact -- marketing, phone, in-person visit, follow-up, referral -- and make each experience powerful and unique.
1. "United's Bankruptcy Tab- $335 Million Plus in Fees," USA Today, March 10, 2006. Webpage: http://www.usatoday.com/travel/news/2006-03-10-ual-bankruptcy-fees_x.htm
2. "Southwest Airlines Reports Fourth Quarter Earnings and 35th Consecutive Year of Profitability," Smart Brief, January 23, 2008. Web page: http://www.smartbrief.com/news/aia/industryPR-detail.jsp?id=B276A381-7625-4A27-B63E-A6064AC065CE
3. Web page: http://www.echeat.com/essay.php?t=27535
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