American Airlines Rebranding Failure

American Airlines rebranding is an example of all that is wrong with branding

American Airlines RebrandingThe American Airlines rebranding initiative earlier this year is an example of what pisses me off with branding companies and the drivel they sell to clients.

It was a total waste of money. Worse still, it was a squandering of an opportunity to lead and grow.

Here is a little background for any of you who don’t follow the airline industry as closely as I do (read a market study on the industry here if you are interested).

American Airlines Rebranding
The old American Airlines logo

The merger

American Airlines merged (or purchased depending on your point of view) with US Airways.

American Airlines rebranding was necessary because the old American Airlines company was having a difficult time staying afloat.

It had to go through reorganization just to continue in the business. US Airways was not in any better shape.

Regulators approved the merger because it was believed that, without the acquisition, American Airlines would not be a viable company anymore. It was believed that having American go belly-up would be a bad thing for consumers (the flying public).

But who cares about you and I? What it really meant was that, as consumers, we would have less competition and fares would increase as a result. Same thing happened when United and Continental merged and when Delta and Northwest did the same.

The flying public is not a consideration in this equation, the viability of a large corporation was.

Here is the real problem with the American Airlines Rebranding

American Airlines RebrandingThe industry needs to rethink its business model and the airlines need to redefine their brands. Public sentiment hates the airlines.

They have become unreasonably difficult to use, are costly and unreliable. The passenger is always on back burner.

If your flight is delayed, they appolgize but it turns out to be only your problem. “Please stay in the gate area” even if the flight is delayed an hour or more.

You are captive to the gate because, if the airline should find another plane to run the route, they might take off before the projected delayed estimate— and if you are late, well screw you.

American Airlines had an opportunity at the time of merger to redefine its brand, change its business model and flip the playing field upon which all the copycat competitors compete.

It SHOULD have rebranded. Instead they went to Futurebrand and got a new logo.

A new logo is NOT Rebranding

Who is to blame for this? American Airlines should bare much of the blame. It was lazy and complacent in looking to redefine the category and the brand.

It is the sort of thinking that got it into financial trouble in the first place. But Futurebrand is complicit too.

American airlines rebranding
The NEW American Airlines logo

Why did it not tell American Airlines the truth?

That American was losing the opportunity to grow its market share beyond the simple fact that it was merging into a larger airline.

It’s because Stealing Share competes in an industry (rebranding) that does not understand the business it is in.

Other brand companies still sell corporate identity changes and pass it off as rebranding. No wonder the art of branding has a bad reputation.

Here is the result of that effort by American Airlines and Futurebrand. A new logo, a new name—The New American Airlines (absolute genius don’t you agree?) and a theme that tells the flying public that they are now the largest airline in the world.

God knows that is why we choose them!

New Delta uniforms? How about updated planes?

I travel a lot for business and one thing never seems to change. I continue to hate the airlines.

Since I have a limited number of airlines to choose from where I live, the three I typically hate the most are United, American and Delta.

The things I hate about them seem fixable and would have a great impact on their brands and consumers’ preference for those brands. They are really easy things like a more comfortable seat, in-flight entertainment options, plane updates and on-time service. I would also like the gate agents to be a bit friendlier and helpful too, but I may be asking too much.

Delta uniforms
OK, so the new Delta uniforms are nice. Who cares?

So you can probably understand my confusion as to why American has made such a big deal about redesigning its frontline staff’s uniforms. There are new Delta uniforms too.

The new American and Delta uniforms don’t make flying any better.

There are a lot of things wrong with the airlines. If one were to list them, flight attendant uniforms would probably be about 400th on the list. It’s not like I ever really noticed anything wrong with the old uniforms.

To be fair, the new uniforms may provide a sense of pride to the front-line folks that might make them a bit happier. I’m sure that will last for about a month.

However, the airlines continue to do things that don’t actually improve things for the flying customer. The planes are old and look worn out. In commuter jets, seats are threadbare and have no cushion. Beverage service consists of a quarter can of soft drink poured into a plastic cup filled with ice. Seats don’t have power and, even on those very few flights that have internet or in-flight entertainment, the coverage is spotty at best.

I would have no problem with the new uniforms if they represented something larger, such as upgrading the planes the same way airlines have upgraded their uniforms. Honestly, that would have a significant effect on their brands.

Invest in that, American and Delta. I can certainly live with the older uniforms.

JetBlue paying for TSA PreCheck is not enough

For any of you who traveled through the air over the July 4th weekend, you know how cumbersome going through security has become. We live in a world in which security is among our most important issues and TSA have responded by having one of the least efficient ways to get passengers through.

TSA PreCheck
The best way to avoid these lines is through TSA PreCheck.

The best way to avoid the large crowds and clogged lines that can stretch for yards is to sign up for TSA PreCheck. As many of you have probably seen, it’s a special entrance that moves much faster because you don’t have to take off your shoes and other duties that slow down the line. By going through the pre-check process, you have already been noted as someone safe to enter.

That is why I wonder why more airlines aren’t doing what JetBlue announced it was doing today. Footing the $85 bill for TSA PreCheck for its most frequent fliers.

Now, this kind of thing does happen at other airlines. You can often negotiate with your airline to pick up the fee, especially if you are switching loyalty programs as I did when leaving United to join American.

But no one has promoted such a response as JetBlue, which said it will pick up the fee for anyone who has flown 30 one-way JetBlue flights and earned 12,000 base flight points within a year.

Picking up the tab for TSA PreCheck isn’t a game changer.

A note of caution, however. This isn’t going to change the industry landscape much. For one thing, JetBlue doesn’t have nearly the number of routes that the big three of United, American and Delta have. But as air travel picks up and the security lines increasingly frustrate passengers, it makes sense for the bigger airlines to institute such a loyalty reward.

Airlines are currently basking in increased travel but they still have the same problem they had when things weren’t so rosy for them: How to create preference. For the most part, when it comes to the most frequent fliers, preference comes through loyalty programs and location of hubs.

It is artificial preference that can change by new loyalty rules (that’s what happened to me) or new or less routes. The airlines might think they have you trapped, but you can switch anytime.

Even paying for TSA PreCheck, while a strong move for any airline, won’t guarantee preference. The airlines have still failed to find any kind of emotional reason for why you would prefer one airline over another. It’s the reason why you have seen so much consolation in the industry because it’s the only way they can grow.

TSA PreCheck is a great thing. But the main problems still exist.

Affinity programs and why they fail.

Affinity Programs Rarely Create Affinity

Almost all businesses from retailers to transportation companies have affinity programs designed to foster brand loyalty. Most work very poorly and often are simply a table stake in the category. Retailers, manufacturers and airlines will often find that their customers belong to a host of affinity programs that most certainly includes their competitors. (Affinity programs are an extension of CRM. Read an article on CRM here)

Affinity programs are similar to coupons

In many ways, discount coupons can be part of the affinity programs because they are all aimed at fostering trial and gaining repeat business.

As retailers know all to well, this sort of affinity program has severe limitations because consumers all begin to regard the couponed price as the real price.

Affinity programsAs a result, a business built on couponing lowers the standard price point significantly and reduces margins. P&G (Proctor & Gamble) are victims of this game. As margins reduce so do advertising dollars. What these packaged goods giants are left with is poorly supported brands that rely on a discount price for business success. Not a very good model to say the least.

I have written extensively about the airline industry in the past. Nowhere are affinity programs more a part of day-to-day business and many are utter failures. Often times the programs seem more like a criminal sentence rather than a benefit. Let me give you a personal case in point.

Airlines use affinity programs as a cornerstone of customer relationships

I have frequent flyer accounts on a multitude of US airlines. These affinity program accounts promise advantages on international carriers as well because of the alliances (like the STAR Alliance, SKYTEAM or ONEWORLD Alliance). I am a perfect example of a prospect who belongs to a host of competing programs. How then do the airlines try to compete for my business? In a word—Status.

United Airlines affinity programsWhen you fly as much as I do, gaining status on one or more airline is not that difficult. The key number to remember is 100,000 miles. Generally, at that threshold your status is considered premier. Don’t confuse this with PREMIER STATUS, which is an industry designation. I am speaking of having gained a premier position in status over other flyers. And this is where the trouble begins. The promise of status is very different from the reality.

I have flown over 2.5 million miles on United Airlines. As a result, I earned their top tier status. I am officially known as a Star Alliance, 1K Gold Member. This means I have flown over 100,000 miles in the previous calendar year. Sounds impressive on the surface but the system really falls apart after that.

Global Services. The Pinacle of Affinity Programs

On United Airlines they have a special status known as Global Services. If you have ever waited in your designated line at a United gate you have probably heard this group called to board the aircraft after people with disabilities that need extra time to board and in conjunction with military service people in uniform. United does not disclose how they formulate the invitation to Global Services but there are plenty of blogs around that speculate in a revealing if not an accurate way on just how they do it.

Global services is the ultimate affinity programTwo years ago, United awarded me with a Global Services member invitation. Benefits included first on the aircraft boarding, upgrades to first class 72 hours before your flight based upon availability. A separate phone line to call to speak with a Global Services representative. No fee charges to change a reservation. Hotel rooms paid when needed —regardless of the reason (including weather). And if possible, they will even pick you up at a connecting gate with a tight connection and whisk you off directly to the next gate in a company automobile. I have even had them bump a fellow traveler from a flight in order to guarantee me a seat in a last minute change.

Affinity programsSounds pretty good. And it can be. The problem is in how United manages the Global Services membership. It turns out that Global Services status is not based upon miles flown but rather the revenue you generate for the airline— in comparison to your peers.

This past year, for example, I flew my usual 100,000+ miles on United. I also have a United credit card upon.which all of my travel is booked. My Hilton Honors program is linked to the United account (Hilton touts it as double-dipping) and even my Hertz rentals get logged into my United Mileage Plus account.

This year, United took away my Global Services status. The reason? Because their revenue was down on my total spend. I’m now just a 1K flyer.

I know, who am I to complain. Well I’m going to complain and I’ll tell you why. I am a human being and we all feel about our privileges in the same way we feel about a coupon price being the REAL price. Once we have it we feel punished without it.

How should affinity programs measure affinity?

What United did not recognize was the value of my long term business with them. They have no metric for understanding it and as a result will be the ultimate loser in this game.

American Airlines affinity programsAs a 1K, I’m on upgrade lists but I rarely get them because they continue to discount the first class seats up until the time of departure and award the remaining seats to any and all Global Services members. I no longer have a designated customer service rep to help me sort through the myriad of travel issues that accompany this many flights per year. On top of this, no one cares if my connections are tight or that I miss flights because of delayed connections. Well, almost no one because my clients and I care. It’s just that United does not.

Affinity programs

What United does no know is that I also have a premier status on American Airlines. I am an Executive Platinum with American and United just said goodbye to  all of my business.

Here is a bit of history. My local airport is a small regional one in Greensboro NC. Aside from a few select destinations like New York, Chicago, DC, Atlanta, Philadelphia and Dallas all flights require a connection. Many years ago I started flying with US Airways because they had the most connections out of Greensboro. I could get almost anywhere in the nation via a short 20 minute connecting flight through Charlotte NC.

As my international business grew, I began to fly more and more on US Airway’s STAR Alliance partner United Airlines because they had great connections internationally through another partner airline Lufthansa. Over the years, I flew more and more connections through United as opposed to US Airways because the hubs of Dulles, O’Hare and Newark worked as well for me as connections from Charlotte.

This seems to happen to everyone. Affinity Programs lose relevance.

What happened to me, as often happens to frequent flyers, is that my status with United grew and I tried to consolidate more of my flights with the airline to gain greater status. In an odd twist, United began to cut service from Greensboro at about the same time they acquired Continental Airlines.

United eliminated direct flights to Houston (a Continental staple flight), took on the Newark connection route and eliminated all real United flights from my airport. In its place they flew only United Express flights from GSO (as Greensboro is known) which utilizes small regional jets and are owned by companies like GOJet and other regional carriers. These flights were smaller and more cramped but the longest leg of the connection was Newark and you can put up with anything for an hour and a half.

Affinity programsThe next shoe to drop occurred when US Air merged with American Airlines, thus eliminating the option of any connecting flights through Charlotte. American is part of the ONEWORLD Alliance and not the STAR Alliance. At the same time as this merger, United stopped flying jet aircraft between GSO and Dulles and replaced those flights with a turbo-jet WW2 throwback that added 20 additional minutes to the flight.

Then United cut back on the frequency of flights eliminating the possibility of caching an afternoon flight out of DC for any international flights. Reliability of the on-time arrival of the connections was so bad that I took to always taking the earliest flight. Regardless of the length a layover I flew early because I was consistently missing my connections on United Express from Greensboro. To be safe, the best bet was first flight out in the morning on flights that originated from GSO.

Affinity programsThrough all of this turmoil, I remained loyal to United because of my Global Services status. They bailed me out of many a tight squeeze by meeting me at the gate and shuttling me to my connection. They provided me with the flexibility of flights by booking me on competing airline flights when the connection failed to work as planned. They treated me as if I mattered. As a result, everyone in my company flew United because often my colleagues fly with me. United failed to measure this value.

Affinity programs and the nNFL Baltimore ColtsThis past January, when United dropped me back to 1K status I gave up my loyalty. The reduction in status did not make me want to try to book more flights with the airline in an attempt to regain status. It had the exact opposite effect. It made me angry with them. I felt like a Baltimore Colts fan who had an emotional connection to a team that left me stranded in the middle of the night.

Suddenly I realized that my belief that I mattered to them was a figment of my own imagination. The affinity program was completely one-sided. They had no affinity for me.

In measuring my value to the airline, they failed to take into account the sacrifices I made to remain loyal. They also failed to calculate the value my fellow employees brought to United by flying with me. They completely missed the point. Affinity must work both ways or it simply does not work.

The brand opportunity for affinity programs

Here then is the brand effect of affinity programs; the value of a member needs to be calculated as a lifetime benefit not a short term measure. Once a benefit is granted it should be considered long term because anything less than that is viewed as a punishment. So the threshold of premier benefits needs to be a bit higher and the forgiveness of not meeting that criteria once gained needs to be significantly lowered.

Cvs affinity cardIt is possible that all affinity programs are incomplete or failed attempts at fostering loyalty. Often they begin to feel more like handcuffs than they do a life-line. The very act of specialness always requires that many be left out.

Think about this for just a moment. How special would it feel to be a premier member only to find out that everyone had the same status and boarded at the same time? You see the conundrum. Signaling out specialness is a double edged sword. It must cut a bit but not so much that it hurts.

Affinity programsThe airlines are in deep trouble. Currently, their revenues are up but that is due only to the dropping cost of fuel. They have never understood the costs of doing business and they continue to miss the value of customer loyalty. For the airlines the battle is defensive not offensive. They struggle to maintain loyalty and have very little to offer in the battle to steal market share.

To make up for this they have created affinity programs that express no love for the customer or prospect and reward only short term investment. They have never developed a metric to understand real value and fail to measure and reflect the sacrifice the member has made to remain loyal.

We have many choices in today’s world and most of us chose based upon short term values. Businesses, or rather brands must have a longer horizon. If they do not they become prisons rather than coveted havens.

 

Airlines and thier markets

The retail category market study

The worst marketing. Airlines.

Southwest Transfarency too clever

The image of the national airlines is so bad that when travelers were enduring long lines and delayed flights because of a Southwest Airlines computer glitch yesterday, we barely batted an eye. We expect the worst from our airlines – even from one of the most likable of all the airlines.

We at Stealing Share have long lamented the inability of airlines to create preference beyond ticket prices, loyalty programs and gate availability. The only brand that has come close is Southwest because it has basically positioned itself against all other airlines. Its advertising, as I’ve said before, comes this-close to saying that the other airlines are crooks.

It is, for that reason, that I’m not into their new campaign called Transfarency, a name the airline has admitted it made up and is supposed to state that Southwest is transparent with “nothing to hide.”

The idea of Southwest Transfarency is right because, like a lot of Southwest’s messages, it suggests that other airlines are not transparent. Anyone who has flown on any kind of regular basis would certainly agree with that. How airlines come up with ticket prices is more bewildering than how costs are created at the gas pump.

For example, if I fly from Greensboro to Charlotte to Orlando, say, it is less expensive than simply taking the direct flight from Charlotte to Orlando. How does that happen?

Cleverness is the enemy of all marketing.

Therefore, the idea of Southwest Transfarency is spot on. But the name itself is far too clever, and cleverness is always your enemy in marketing and branding messages. Clever sounds like it was written by Madison Avenue and, therefore, not believable. When you become clever, it just sounds like marketing and not of this world.

The idea of Transfarency is right, but the word is too clever to be believable.
The idea of Transfarency is right, but the word is too clever to be believable.

The best themelines are ones that are in spoken language, like Apple’s “Think Different” and Nike’s “Just Do It.” Those are believable because they state exactly and clearly what the brand and those who use that brand stand for.

Transfarency sounds like something an ad agency sold to the airline without thinking whether it would resonate or not. (I can see the boardroom response now: “Wow. That’s clever!”) Even if Southwest says, “We’re all about being open and honest with customers and making sure pesky fees stay away from our low fares,” that’s not really being transparent.

Now there’s an idea. Why not show how those fares are created and simply use the spoken word “Transparent”? That would resonate in the market and would help Southwest Airlines say once again that the other airlines are thieves.