Archive for April, 2008

The Case for the Negative Brand?

April 11, 2008

What a week in the airline industry! We all know the airlines are suffering. High fuel costs have decimated profits and now it appears many carriers as well. Just today Frontier went into bankruptcy in attempt to reorganize, and Aloha and a number of others out of business entirely.

Now add to it the FAA and the “inspection crisis” plaguing American Airlines in particular and their MD80 airplane which makes up more than half of their fleet. For the last couple of days, this fleet has been grounded for apparently long overdue wiring inspections in the wheel wells of each plan, causing thousands of flights to be cancelled and over a quarter million customers inconvenienced at best, often stranded in locations they didn’t intend for hours and even days.

Passengers by law can be compensated for hotels should they be stranded overnight, and of course American will rebook passengers on any carrier and will even issue vouchers for cancelled flights as long as you initiate your next flight by April 17.

And if you go to their web site at http://www.aa.com/index_us.jhtml, you can see crisis control marketing in action… notably an “ADVISORY: AIRCRAFT INSPECTIONS AFFECT SOME AA TRAVELon the home page and special jump page at dedicated just for this at http://www.aa.com/aa/pubcontent/en_US/urls/md80.jsp.

If you look carefully you will see that American is terribly sorry, its not our fault, safety is concern #1 and please e-mail us if you are stranded overnight. It appears to be written by a team of lawyers to mitigate liability, nothing else.

Are you kidding!!!

E-Mail us with your travel info and we will get back to you… it doesn’t appear that effected passengers are buying it either. Phone lines are jammed, and customers have been know to try to get through for hours on end with no luck. And ticket lines at airports are no better. Passengers are waiting for 4 and even more hours just to talk to an agent!

What a mess! I will argue, especially in light of the inspections, our trust is shaken, passengers are having vacations ruined, businesses are being disrupted, and all American can do is offer an apology and tell us to e-mail them. The only thing that’s even more surprising to me is the apparent lack of outrage by the public and government officials.

Now let’s go back to Valentine’s Day 2006. A snow storm hits the east coast of the US, shutting down JFK in NY, hub to another airline, in this case a brand that is beloved by its customers. This disrupts Jet Blue to its core. Thousands of passengers are stranded again, some for days. In other cases, they are actually stranded on planes on the tarmac, without electricity, running water and other amenities for hours, in one case up to 14 hours. Not good.

On top of that, their phone systems went down, planes and crews that could have been mobilized to take up some slack, were not utilized and sat idle. There was no apparent recourse and outraged customers went ballistic.

The media also took up the charge. Business Week, which was getting ready to announce their Top 25 Customer Service Champs, had just enough time to publically eliminate Jet Blue, who was ranked #4 overall, from their list entirely. And the talk shows went crazy, with Leno and Letterman all over it.

In this particular case, here was a darling brand in trouble, and Jet Blue rose to the challenge. CEO David Neeleman responded authentically and quickly to the challenge as you can see in this You Tube video produced in response that you can see at http://www.youtube.com/watch?v=-r_PIg7EAUw.

First you can see Mr. Neeleman is tieless and clearly upset. He is not rehearsed or smooth at all. It looks and feels authentic. He apologized, of course, immediately, and then takes responsibility… and potential liability as well. Then he announced 3 steps they were taking to attack the problem immediately and to top it all off, announced their new, groundbreaking Customer Bill of Rights to ensure better performance in the future.

Talk about getting ahead of a crisis!

Contrast that with American. JetBlue messes up and creates outrage, the far bigger American messes up on an even grander scale, they blame the government, seek to minimize liability and we just yawn and thank the powers above that it wasn’t us on one of those flights.

The difference from our Marketing 2.0 perspective… is brand. American’s brand along with the other once platinum carrier brands is tarnished, almost an anti-brand. When we think of major carriers today, we think delays, inconvenience, lousy service, and with all this FAA stuff going on, minimal trust at BEST.

So a problem like this comes up for American, and from a brand point of view, its business as usual. We expect it. Yikes! No brand conflict here, clearly.

Jet Blue on the other hand was another story. People love flying on it for a number of reasons and have a strong brand connection. That was why when they stumbled back in 2006, the brand was in conflict and we were outraged.

I will argue that in the long term, JetBlue understood that they had to act, and that action, pro-active action would have a cost and a short term negative financial impact on the business. I will argue that these kind of issues can be considered a marketing issue and fixing it marketing spend, which as we now see has strengthened customer loyalty and is likely keeping the business healthier in these times.

American has no brand, nothing to protect. Their quote unquote marketing is all about damage control at best and placing the blame on others. This is not a good indicator of American’s marketing prowess, and long term health of that and other similar airlines.

 

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Are Ad Words Dead?

April 8, 2008

We have seen the headlines over the past few months… “signs of click recession!” or “decelerating clicks!” Obviously these are referencing Google and are referring to ComScore’s recent monthly data reports showing decline in the number of times consumers clicked pay per click ads that accompany Google search results.

We can infer from the headlines that journalists and the powers that be may attribute this to environmental factors as a result of a slowing economy. Others say this is the result of a conscious effort by the company to trim clicks so that they can limit the supply and charge more.

We can go back and forth about the cause, but it clearly appears that advertisers, after years of consistent and meteoric growth, may be getting fewer sales per click, which is bad news indeed for all concerned.

Marketing 2.0 Win has its own theory, borne out of let me say up front non-scientific research in my work as an adjunct professor of marketing at Emerson College in Boston. I see it in the classroom all the time, the search-based PPC ad platform is becoming mature and students (vis a vis consumers) aren’t noticing or responding to them as they have before.

Remember Banner Ads? Or Flash-based web site intro’s? How cool they seemed… then, and how they don’t now?

Thus is it may be with search-based adwords. When we first encountered them, they raised the bar for relevant ads, based on what we were searching for at the current moment. Google not only delivered us better search results than the others, the search based ads as often as naught mirrored our interest at that instant and offered us the potential to find best price for products we may be seeking. We were interested, we noticed, we clicked through and we bought, finally making the long sought after promise of the web to deliver relevance to individuals a reality.

No, don’t me wrong, Google is not resting on any laurels. They are a great innovating company and their acquisitions of YouTube and DoubleClick prove this. However, YouTube even with huge numbers of visitors is still hard to monetize, and the DoubleClick approach to knowing where you have been, as well as where you are in order to make better inferences leading to more relevant ads, well this opens up a whole Pandora’s Box of issues from privacy to trust that will only get more intense and slow things down.

In our world view, if relevance is king then as the Law of Surrender = Victory dictates, control is key… customer control. To make it simple, ask the customer what they want. Offer them a way to choose from a menu of ads or create a profile that can be changed at any time, which can then help serve up ads on search, on You tube, Hulu or wherever, that will be more relevant. For example, when is a car ad most relevant? Probably when you are in the market. Give customers the ability to declare their interest.

By doing this two things happen. 1. With the customers help and control, ads will be more relevant and targeted, and 2. The more opportunities the customer has to raise their hands, the more likely a prospect they will be, which will translate into higher conversions and sales.

So, has search-based advertising had its day? You be the judge. However from where we sit there is no doubt that the novelty may be wearing off and that the quest for relevance is ongoing. In Marketing 2.0 Win, it is certain that if companies do more to bring customers into the mix, relevance will follow, which in the end creates even more opportunities for growth.