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Comprehending Traveler Disloyalty.
By Timothy O Neil-Dunne ~ T2Impact.com
Monday, 13th April 2009
 
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
Thanks for reading - private comments please to administrator@t2impact.com
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