HRH Prince Philip, Duke of Edinburgh RIP - A family perspective

 

With the passing of Prince Philip, here is a little memorial and a bit of family history. 

In 1952 The Rothmans King Size (RKS) pack was being redesigned. The launch of the new size product in a soft pack had resulted in the product being bent as the new king size was indeed longer than conventional non filter tip brands. The team at Rothmans had managed to come up with a new way to package and preserve the product. The brand represented the introduction of several mass produced innovations. The first mass produced filter tipped cigarette, the world's first crush proof cigarette pack amongst others that needed a design that reflected the optimism and pride of nations recovering from the devastation of World War 2. Two men set about to bring such a vision to the world's then most consumed product. In doing so they created a global brand that reflected the time. The RKS pack was modeled on the dashing young consort in his navy uniform of Britain's new monarch. The alignment of the brand, the new product category and new technology culminated in what became for a while the most consumed product on the planet. Those two men were Bill Morkell and Paddy O'Neil-Dunne. Bill's artistic talents were supplemented by several others who worked on the brand and the advertising including Vova Tretchikoff a long time personal friend of the 2 men. While the product has fallen out of favour of just about everyone except the taxman (and rightly so) - it is good to reflect back on the "cool" world post war and the optimism that it engendered. Queen Elizabeth and Prince Philip represented the nexus of the times. To this day that pack design endures. 

Growing up in that pioneering world was an amazing experience. I am eternally grateful for being inside it.

Are Microsoft and Yahoo Still Relevant?

Yahoo has had its share of troubles lately and is still struggling from a degree of missteps combined with neglect and a smattering of hubris.

So let's consider things in context. Let's just look at email. With Facebook entering the fray - Yahoo still has more subscribers than the other two closes competitors (Gmail and Hotmail) combined.

But Yahoo is struggling to redefine itself in a world where search is dominated by Google and where the portal concept is slowly dying. People want more than just a gateway to content. They want to get there faster with less clicks. And Yahoo just doesn't hack it. The Social web is just so big that just by concentrating on it - as Facebook has - that the value can be mined. So Yahoo can be ignored by those who matter - the users and the advertisers.

Microsoft's value is harder to ignore. It owns several platforms not least of which is XBox. But the de-emphasis on the brand Microsoft has made the uber-brand less relevant. Of course it still carries its relevance in the corporate arena but even here it is under attack. The upsurge in Bing has clearly allowed them to stay in the game. But its a hard fought battle. But look at the brand cemetery from Redmond. MSN is probably about as relevant as Yahoo.

It is of course easy to go for the media darlings - Google and Facebook at the top end, with strong showings from Apple (iEverything) Groupon and Twitter. The long term winners must continue to make their brands and value proposition relevant. For this you have to be relentless at making your brand topical.

Good luck with that!

Brits Have No Loyalty - Why Should They...?

People get all agitated that there is no loyalty online. But before we get critical of the behaviour perhaps we should consider why and if there is indeed anything that can/could be done about it.

There was an old adage in the UK Travel Trade that the "punter would cross the street for a quid". Translation for those of you who didn’t know was that a retail shop windows were the primary advertising vehicle and if a customer saw a headline price of say 199 and across the street was essentially the same package for one pound less - he would walk into that shop and buy in that outlet.

Tealeaf is a company that studies customer behavior and they have recently released a study on the UK market. You can get it here from etid: . The study is entitled “The ebooker: understanding how travel customers use the web. A whitepaper by Tealeaf and carries results from a pretty big spectrum of customers who responded to it. The study was conducted by Harris Poll UK and published on November 19th.

Tealeaf because they focus on the Customer (read user) Experience – UX – naturally focuses on the areas where web site experience can be improved. And the number of examples of effective practice are legion. It still amazes me that with all the money that some companies spend bringing punters to the front door of their website only to scrimp on the User Experience. And yes you know who you are!
All the money spent driving customers to the website and then the guy looks in the shop window and sees a poor experience and crap. There is little incentive on his side to stay with you – ie to close the sale...

I have written many times that the performance of the site’s User Experience is not easily gleaned from asking the users what they think. It has to be gathered from their behavior. Shock Horror! People lie! But frequently the surveys themselves are badly worded and the consumer cannot express himself adequately. Focus Groups also don’t do the trick. (Remind me to tell you one day about professional focus group participants!). More sophisticated testing and A/B type studies are needed. This is only wise. Hire companies like my consulting firm or a specialist group like Tealeaf to assess your User Experience. This is wise not just a plug for my business.

I would also like to dive into the other reasons for this lack of loyalty by the customer. The Brits are no worse than other markets. However they have a very short tolerance for screw ups. Probably more so than their brethren in other markets. And another possible reason – the UK websites are actually pretty bad and have done little to do a good job in the User Experience. Most Website managers are either copying the US models (which don’t always translate) or just don’t have time to focus on it. In my view the UK is populated by people running websites of circa 2000 vintage web 1.0 varieties. Localization is not changing words – it is deeper and more fundamental. There is very little appetite of the user to put up with this lack of attention. He/she punishes you by clicking away. And don’t forget that he wants a complete experience. One of the worst things is to tell him (as I know more than one UK site tells its users) “our customer service agents use the same information and don’t do better offline than online.” And then proceed to prove themselves as liars on the same call!!!

There is an interesting factor in the study – something Tealeaf calls “Social Acceptance”. This is a factor that few have so far grasped. However don’t interpret that to mean that the Social Acceptance can be assuaged by something in Facebook. No – again it is the whole package. Thomson UK still suffers a certain degree of social stigma from being the cheap brand. No studies I have seen address this issue. Further the lack of brand delivery against a promise is one of the consistent mistakes a Website makes. IE Lies, Damned Lies, Statistics and Brand Lies…. They fall into the same category. Consider the opposite end of the spectrum with Ryanair that does not give a thought for its brand and does everything based on price. While Marketeers may scoff – Ryanair delivers against its premise time and time again.

The effort of so many companies and brands now to get people to “like” them creates a false sense of brand loyalty. So we are clear – “like” does not equal “brand value.” The only reason they are clicking the like button is so you will give them a banana.

Finally let me remind you of something that most people forget. A customer is far more likely to distrust than to trust. Start there and work on proving him wrong.
More likely to distrust than trust

Brand And Alliances - Game, Set - MISMATCH

I flew on Delta this week - the last leg of a long round the world trip which saw the Professor flight more than 23 different flights on a wide variety of airlines.

Onboard I was forced to watch a Delta commercial. With Donald Sutherland's soothing voice as the narrator the ad was very nice - part of the new campaign by NYC based Weiden + Kennedy. (Click on the link and then hit the PLAY button).

The ad extols Delta's people and how they make a difference. And almost uniformly I agree as a long time Delta flyer with getting on 1.7 million miles of actual Delta flown miles.

Small little problem - Delta's service is now often provided by so many different people. Specifically lets look at my flight.

A DL operated flight from LHR to MSP and then an Alaska Airlines codeshare from MSP-SEA.

At LHR I checked into the Skyteam desk - manned by Cobalt (KLM and AF owned ground handling company) personnel. Nary a DL person in sight. The local team at LHR T4 is but a handful of DL staff now. I used the Skyteam lounge - also manned by Cobalt personnel who could not help me with my flight information or fixing a seat problem. They referred me to a phone number.

At MSP I checked onto an Alaska Airlines flight - with DL personnel at the Gate. Who were the only DL people at any of the multiple touchpoints along the ground. At SEA - my bag complaint was handled by Alaska who outsourced the bag management to another company.

So you see the great idea of the product being backed by the good people of DL is not actually a truth. Because Delta's people dont actually service you. Someone else does. And don't get me started on certain of Delta's partner AF where shall we say Gallic humour and customer service are somewhat apart.

Years ago DL was involved in the Quality Alliance with SQ and SR. It was a super idea. They placed flight attendants on each other's aircraft. It really did do a lot for the customer and created a much better experience.



The alliance mania - merger in all but name - does little to support a brand value. And when the branding is focused on your direct employees - this is when it really comes apart. Delta is not the only one currently guilty of this sin. Cathay Pacific is also doing the same thing. And believe me the CX experience is nothing like that on some of the CX code share flights. Just because the chaps who experience it (Frequent travellers like myself) doesn't mean you can ignore the basic fact that your services are outsourced and the quality sucks.

Social Media Needs Organizational Relevance

Social Media has become part of the fabric of our over communicated world. My fellow TNoozer - Siew Hoon has an interesting piece on her blog.

When the web was young - I was very happy that we were finally getting contextual structure to the process of advertising. Being an old ad geek from the 1970s and 80s - the emergence of a truly metric'd media environment was like a dream come true. Too bad it got screwed up almost as badly as the old ad world. So now we have shades of truth that we can show can prove just about anything.

Just when we thought it was getting at least comprehensible - along comes Social Media. Most companies embraced SM with a passion but not from the same base as traditional media. Many companies today run their Social Media in a different silo from their advertising. For example I understand that Southwest puts Social Media in the hands of its PR team. relevance

We thus have silos that don't talk to each other. These silos can be understood as being separated because the medium/media are new and in many cases not manageable in the traditional formats and metrics. eMarketer has done a nice bit of research on the subject that I encourage you to read. It shows how diverse the silos are. particularly pointing to the likely result of disconnected and obtuse messages being delivered into the market - we know already that this is confusing the user community. At the PhocusWright session in Berlin earlier this month - the session moderated by Kevin May - PhoCusWright@ITB Bloggers Summit Workshop 2: Brand Management, Fighting Fires and Finding Fans Through Social Media - indicated how this can really get screwed up. The move to real time communications has changed the way companies and brands adjust. But the message of the squeaky wheel getting the attention most of the time did emerge. That is scary if Social Media is the customer feedback mechanism and is then disconnected with the rest of the brand.

If masters of the brand do not address this and bring Social Media into the overall brand management process then lord knows what we will get. A Corporate version of Chat Roulette perhaps?

Cheers

What Consumers Seek From Their Brands Online

As we move more and more away from the "access information superhighway" web to the semantic web - it is getting increasingly obvious that brands are not just about some Madison Avenue creation of brand value but what the consumer needs and expects from that brand.

No longer is it just important to create a vague image. The brand must have real value that in some cases can actually be measured. I like the work that Lightspeed is doing in this area and have commented on their stuff before.

Check out this presentation: at the European IAB last month.

Emarketer did a piece on their brand expectations study. What is interesting to see is that there is a growth of expectation on what they consumer will get from the brand. While discounts still trump all other attributes some of the others surprised me.

Read both reports - they should be required reading for anyone who is involved in any brand online.

Cheers

Airlines: Are You Conflicted?

According to the Sabre Airline Study - you just very well might be.

Sabre has released a study In the study highlights there are a number of key findings. I will pick out the ones I think are relevant and while cherry picking is the name of the game here - I think it is important to recognize that while airlines think they know what they are doing - there is an underlying trend that shows they are conflicted. So what do you want - Revenue or Brand Value?

According to the study it is "customer loyalty and retention efforts that are viewed by an overwhelming majority of survey respondents (86 percent) as having the most positive impact on their business."

The study goes on to note the conflict the airlines face: "The importance of developing customer loyalty is part of the unwieldy crisis airlines face today as charging additional fees is viewed by them as one of the top tactics to increase revenues."

Overall customer satisfaction with airlines was down this year, at at time when the fewer passengers on planes should have improved the service. The recent passenger imprisonment examples can't have done a lot for their overall image. But if you look at the recent annual Power's survey, Airline customer satisfaction has fallen to its lowest level in four years.

The decline in satisfaction in this year's survey largely was driven by unfavorable customer perceptions on in-flight services, flight crew and costs and fees, according to the survey of nearly 13,000 passengers who flew on a North American airline between April 2008 and May 2009. Both leisure and business traveler respondents reported overall declines in customer service.In its annual survey, JDP measures customer satisfaction in seven categories: cost and fees, flight crew, inflight services, aircraft, boarding/deplaning/baggage, and check-in and reservations. It awarded Alaska Airlines its highest US airline ranking.

"Unfortunately, any improvements in customer satisfaction are being offset by passenger displeasure with cutbacks on inflight services, increases in fees and issues with the helpfulness and courtesy of flight crews" said Dale Haines, senior director of JDP's travel practice.

Going back to the Sabre study, according to 58 percent of those (airlines) surveyed, merchandising and ancillary revenue will help airlines’ bottom line results. Baggage fees, travel insurance, and vacation packaging were rated among the highest in the survey to generate revenue.

And herein lies the conundrum. Revenue or Brand Value.

The Professor thinks that there is a clear case for the "Brandless" brand such as the LCCs leader Ryanair. Michael O'Leary and his crew don't give a toffee for brand. For them the issue of revenue and thence profit is paramount. For legacy airlines in survival mode - as the Head of IATA constantly reminds us - one would have thought that was also the case. But the legacy airlines tend to revert to type. For example one would have thought that it was a little weird that Qantas in the middle of a recession and in the middle of one of their heaviest periods of losses in recent memory - would be running a very expensive strategic branding campaign.

So let's count the ways the airlines are undermining their brand value:

- Confusing fees
- Unbundling the product IE charging for things that were previously included
- Debasing the currency by "selling" differentiators that the high value frequent flyers have paid for with their loyalty
- Moving ancillaries to the point of departure and not making them available at the point of sale
- Selling frequent flyer miles for cash

I could go on but you get the point. The numbers don't lie. Airlines are surviving because of ancillary revenue not because of the long term brand value.

Other interesting Sabre survey findings:

o Increasing revenue and reducing costs is among the most significant challenges in managing airline profits over the next 18 months, according to 67 percent of those surveyed

o Managing revenues (44 percent) and distribution mix (12 percent) are the top two tactics survey respondents plan to use to increase revenues. Ancillary revenues followed closely behind with 11 percent of those surveyed planning to employ this tactic.

It is the last one that I find most perplexing. Given the sponsorship by Sabre of the study - one would expect it to be brought out. However if the legacy airlines REALLY don't regard distribution as important - then they are missing both the opportunity in lowering costs and increasing revenue by doing the one thing they seem to be failing to do... IE leveraging the value of their relationship with the majority of their distribution namely agents. The obvious way to solve that conundrum is through the deployment of new technology and breaking the Gordian knot of the GDS cost model. But then I guess Sabre is none too keen to bring out that point.

Still there is food for thought here. Are the airlines mortgaging their future value for revenue today? Does that future value of the brand actually matter? Perhaps more to the point are the airlines going to have to finally admit that they really are not in control of their brand. Social Media seems to have done a number on several airline brands - both good and bad?

Ah this is good stuff

Enjoy

Cheers

Selling Your Airline's Future Capacity - Smart or ?

For many years airlines have run fare sales as a way to generate cash. In recent years this has become so normal that consumers don't even think about it. If you track this sort of thing as the Professor does - then you can see patterns emerging. For example I can almost predict certain airlines' cash flow position just by tracking the frequency and type of their fare sales. Its a bit of fun.... it provides a window into the minds of the revenue chaps.

In recent years airlines have started to sell their future capacity through the sale of Frequent Flyer miles.

Effectively the deal is as follows: Airline X will sell future frequent flyer miles as a currency (with an apparent significant discount rate) that in turn the purchaser can use as an incentive or currency of its own. Example: Delta sold $ 2 Billion worth of FF miles for 3 years when it needed to raise cash. American recently did the same with CitiCorp raising over $1 Billion in the process. This week even BA has started to do this with the offer of a bonus directly to its consumer base. Buy miles now and we will give you a bonus of 25%.

For airlines this has been a safe bet. Why? Well they still control the inventory and therefore they have their finger on the revenue switch. Also the historical perspective notes that the actual usage of FF miles in both the pipeline and miles that will never be used has grown to a Squillion Dollar amount.

Enter the tax man. This has the ability to de-stabilize the whole equation. There are several laws in several countries that effectively provide for a way to tax them. However Governments are going to be reluctant to do any sharp tax implementation. Why? There are two very well known cases of miscalculation. In the 1980s Pan Am attempted to force redemption of its outstanding FF miles. It pushed the airline to a huge loss as the overhang was snapped up by punters anxious to avoid losing their miles. The other famous case of a miscalculation was the sale of vouchers for Hoover and their vacuum products. The vouchers were more valuable than the products and had no restrictions. Bad move all round.

While airlines are on this persistent hunt for "found revenue" this may be one that will come back and bite them hard. I caution because if the customers try and use their miles and find them useless or too difficult - then they will rebel. There is nothing worse than a pissed off customer in today's viral world.

And perhaps this is a point to mention. Airlines always talk about how much they value their brands and what they do to build them up and maintain them. In today's transparent web based economy the ability to obfuscate and hide is vastly reduced. As one punter FF interviewed about the new United bundling program stated unequivocally - that Airline was selling in effect its former rewards for heavy users - its ultra frequent flyers - to anyone who wanted it. And guess what - he was walking - to another airline. With no easy way to measure the long term brand damage that the impact of these revenue "enhancing" tools such as the sale of FF miles you have to think that indeed the airline is selling itself short. Does this mean that Ryanair is right all along and that people only deal in price? I think that this is becoming more of the issue than airlines have come to appreciate.

Selling Britain by the pound? BA is probably doing just that, selling itself and its so previously high valued brand by the pound. The fees it charges for redemption of its FF miles are often GREATER than the total cost of a discount ticket on the same flight. I have documented this frequently. And don't get me started on the 200 pounds to buy a Silver tier membership... So does that make for a good and highly valued brand. It would be REALLY interesting to see how heavy FF flyers feel about their chosen airlines brand service. If you would like to enjoy some vitriol just head on over to Randy Petersen's Flyertalk.

Cheers

Comprehending Traveler Disloyalty

I am an avid reader and inhale "stuff" about our business. It is perhaps the old researcher in me.

Yesterday I received a piece from PhocusWright inviting me to participate in their new study: "The Disloyal Traveler: Influencing the Undecided".

This did get me thinking why the Traveller (Traveler) has become "disloyal". At the recent conferences I have attended this was somewhat of a whispered issue. No one wants to admit that indeed the era of branding has radically changed if not died.

The demand for instant metrics, performance and more important delivery (aka bookings) has undermined the traditional notion of a brand. It has also finally exposed the fact that (and humour me here - I am addressing airlines in the main) that the product is a commodity.



Of course this is not a binary factor. But in times of economic disability (I am tired of using GFC) price becomes ascendant over quality even if quality was universally measurable and assured - which we know is not the case.

So PhocusWright is correct in looking at this subject. However will the answers be really truthful? Will we get data that will tell us what the consumer really things and is this applicable to the real world?

One thing is for certain - the destruction of brand value is not just a function of the economic environment, nor is it a result of consumer behavior - nor even the web and the fabric of social media. Rather it is a combination of factors not least of which has been the behavior of the brand owners themselves. When cash is king - then their behavior tends towards survivalist.

Understanding the core value of the brand proposition over the recent years seems to have been lost. For example in the recent past legacy airlines focused on yield rather than on value. The value proposition high ground was grabbed by the Low Cost Carrier segment. To differentiate from the commoditization value offered by the LCCs, the Legacy Airlines actually went further up market. Coming back to compete with the LCCs, has these airlines now fighting in the trenches. Unfortunately to do so has meant undermining the "goodwill" of their brands further commoditizing their products.

Sure if there is an apple to apple comparison then the player with a differentiated brand value wins. However this strikes at a core principal of airline products namely opaque pricing. I am sure by now there will be some readers hunting for the comment or flame button. But hear me out. True airline pricing is all about obfuscating the price in relation to the cost. It is as close to a pure buy and sell model as you can get. But it is only now becoming easier to make that true comparison. The operational inflexibility of an airline means the assets are not actually that flexible. It is not that easy to reposition your 777 from transatlantic to the San Diego/LAX market.

At this point in the evolution of the Travel Market, airlines are forgoing brand value for cash value. When people talk about the life time value of a customer - now is the time to really focus on that and mine that loyalty. Sadly but realistically - the lure of instant gratification of cash now vs brand future value has destroyed that image and the resulting value. Thus the customer is not really being disloyal. It is just the manifestation that never was that loyal to you in the first place. Anyone who made that assumption is seeing that in cold hard cash (or lack thereof). Its like the recent movie title - "He's just not that into you." An All Star cast doesn't guarantee success.

I remember once chatting with a SVP of Marketing for a large airline at a small gathering. He had done his homework on his audience and actually gone to the bother of checking up on who was a "loyal" customer to his brand. He was quite taken aback when he thanked me for my loyalty, I explained that it was not loyalty but other attributes such as schedule that made me come back. Returning visits do not mean someone is loyal. This is a new lesson. I also made him even more comfortable when I explained that I was also at Elite status on 2 other airlines. (Back when that meant something).

So food for thought. I look forward to seeing the results of the study. I hope that there are real lessons and pointers for the future.

Oh and one more thing - Big is not necessarily a positive brand value!

Cheers

Legacy Airlines+Ancillary Revenue=Brand Disloyal Customer

This is a song I have been singing for a long time. Ancillary Revenues drives unhappy customers and Brand Disloyalty. So the dilemma for the US and all other airlines and travel suppliers is to try and do something about that.

However there are other drivers for Brand Disloyalty. Airlines are especially bad at this. When the good times are around they think they can ignore their customers and at high load factors (80%+). In the last boom (2007) they did just that. Behaving in a very cavalier way. But - you might say - what was new about that, haven't they always done that (BIABLT!) and the traffic always comes back because they have no choice? Well now the web is making this form of behavior much more apparent to the user communities. Whether it is the high value frequent traveller (through such forums as Randy Petersen's FlyerTalk or the regular John Q Public and social media sites that range from Trip Advisor to Facebook and all flavors in between) this behavior can no longer be spun by PR Hacks. It is transparent out there and people who make purchasing decisions can now see it clearly. And they notice and they are not happy about it.

Forrester has recently completed a study and it makes a strong point that their data reveals travel brand loyalty has decreased by 19% since 2006. Actually I personally think the number is much higher now. (For the link go here: http://www.forrester.com/Research/Document/Excerpt/0,7211,47560,00.html). Ouch.

Further, and I quote from Forrester:

"Leisure travelers in 2008 have every reason to be disloyal. Why? More travel products and options for travelers to choose from, virtually no incentives for travelers to remain loyal..."

So this bad behavior needs to be addressed and it better be soon. The airlines in particular believe they can control their customers. Dream on chaps. Those airlines during the downturn who behave well and pay attention to their customers at each and every touchpoint will be winners. Those who pursue business as usual will be slammed when the traffic returns.

You have been warned.

Cheers

Loyalty - Airlines have devalued their FFP currency

Steve Hay from ICLP in Hong Kong gave a short but very insightful presentation yesterday at WIT/2008/Singapore.

He demonstrated the difficult positions the legacy carriers are in with their FF programs and how they could address them.

Interestingly it is clear that the airlines have been slowly eroding the value of the currency. The impact has been yet more erosion of brand value amongst consumers. This has been a constant theme of the Professor - the big airlines have done a very bad job in maintaining their brand value.

Steve actually gave a couple of very good ideas about how the supplier community can continue to breathe life into their programs. These are no longer programs about incremental value and loyalty. FFPs are now a price of staying in business. Carriers who move to a la carte service models will be struggling to serve their "premium".

Unfortunately we didnt have time to delve into Steve's ideas but I believe that just ignoring what is going on elsewhere in the airline's marketing mix will come back to BITE them big time. Browsing through the FF sites - such as Flyertalk and Expert Flyer amongst others - it shows that things are definitely not good.

In the Asia-Pacific market - the profligate give-aways of the US carriers didnt happen. However some carriers because of their global alliances were forced to give away large amounts of miles. Qantas recently just destroyed the "Miles" accounts of almost all of its users. It now takes more than a million miles to have that "special" trip - say pair of long haul biz class tickets. Tim Hughes over at the BOOT has clearly vented his frustration at this bad behavior.

While I was writing this a PR release from Sabre crossed my mail. Have a quick peak:

http://phx.corporate-ir.net/phoenix.zhtml?c=73098&p=irol-newsArticle&ID=1215013&highlight=


Bottom line - WAKE UP AND SMELL THE COFFEE - you are further eroding the value of your brands.

Cheers