Branding is relational, not transactional. It's about retention, not acquisition. I work with companies and governments to identify and develop the strategies required to build the relationships that ensure ongoing branding success.
I call it data driven branding & it should not be confused with creative driven branding.
I'm also a rugby nut & devoted family man, probably in that order, but don't tell my wife!
In April 2016, Apple announced its first ever reduction in iPhone sales. The company played down the decline suggesting it was in line with slowing smart phone sales around the world but the reality is that Android is becoming an unstopable force and consumers are getting bored with the iPhone.
So the launch of the iPhone 7 is really important for the Apple brand. I haven’t played with the iPhone 7 so I can’t say how it is but it needs to be interesting, exciting and desirable and that’s going to be tough to deliver.
What I do find interesting is related to the removal of the 3.5mm circular headphone jack on the left side of the bottom edge of the iPhone 6. Instead of traditional wired headphones the iPhone 7 will work with wireless EarPod headphones which don’t, I am now told, ship with the phone. According to Apple, this move is part of the plan for a wireless future and that makes sense although the rest of the ecosystem is still wired so that might be an issue in many situations you find yourself in.
EarPods – wirelessly wired. Thanks customers
Traditionally, when Apple makes such a move – remember when it redesigned the MacBook and MacBook Air computers a few years ago, the MagSafe charger got a refresh too which meant you couldn’t use your old charger with your new laptop. And every Mac user will complain about Mac adaptors for monitors, Ethernet cables and God knows what else – it doesn’t think about the consumer.
Well this time, the new iPhone ships with an adaptor that plugs into the Lightning port which is normally used in its chargers. This means you can still use your expensive wired headphones. But you’ll still have to fork out for a separate adaptor if you want to charge your phone while listening to music.
Apparently, the new lightning EarPod headphones offer a better quality sound than ‘wired’ versions which tend to sound a bit tinny. This is something to do with an inbuilt digital-to-analogue music converter (DAC) present in lightning connector headphones.
What this tells us is that Apple listens to its customers and that’s something a lot of brands need to do. It also tells us Apple values the voice of the customer and that is a major step in the right direction for a brand that hasn’t really needed to in the past. It’s a small but important step for Apple and shows that even the most valuable brand in the world must and is listening to its customers. Are you?
Rumour has it the new flagship phablet from Samsung has a dodgy battery. Early reports on social media from Korea feature terrible images of burned units fresh out of the box. Samsung was quick to say only about 0.1% of the devices were affected but out of 7 million already sold, that’s an embarrassment they could have done without.
That’s going to hurt
The latest news is that they are going to issue a recall of all Galaxy Note 7s. This will be a massive blow to the mighty Korean electronics firm that has been banking on the Note 7 to stop the decline in profits of the last couple of years.
I haven’t played with it but cannot escape the relentless advertising across all media channels. With USB Type C charging (said to be the root of the problem), waterproofing and a futuristic iris scanner that uses your eye to unlock the phone, this was considered a real threat to Apple’s dominance.
With a new iPhone due to be released next week, it will be interesting to see how Samsung manages the fallout and whether it can continue to stay in touch with Apple. I expect Samsung to be very transparent and decisive about the whole issue. The recall suggests that’s the case. It’ll also take more marketing dollars, a lot of grovelling and lots of freebies to those affected.
Harder to win over maybe those who were considering switching from Apple to other devices. A category I include myself in. It just maybe that the winner will actually be Huawei. Huawei has seen a 40% spike in smartphone revenue and now has 9% of the smartphone market. To overtake Samsung, it’ll need to sell about 10 million more handsets. That’s a challenge but dodgy batteries and weak quality control at Samsung will help its cause.
In the post I wrote that gold and platinum members of the Malaysia Airlines FFP programme couldn’t use the lounge but someone also not flying Malaysia Airlines, who had never flown Malaysia Airlines and may never do so again, could enter the lounge if they paid RM200 (US$40).
I explained that this lack of appreciation for loyal customers did not make branding sense.
I was making the point that what other airlines do is irrelevant. That what is normal doesn’t matter because Malaysia Airlines isn’t any other airline going through normal. That Malaysia Airlines needs to work harder than any other airline to rebuild its brand following the twin tragedies of 2014 and that the first place it should start was with members of its frequent flyer programme but that it had largely ignored them.
Brands, especially airline brands are always looking for an edge. And they especially like to be seen to be human, to be caring, to be willing to do something extra. A colleague reminded me of what we call ‘thoughtful gestures’ branding. It’s happening more and more in the era of the long idea because thoughtful gestures have long legs on social media.
Think of all those airline ads that show the captain giving a kid a toy plane, a stewardess adjusting the blanket of a sleeping passenger, the offer to heat up a milk bottle for a baby, etc. All cliches and all used by Malaysia Airlines in its advertising in the past.
No frequent flyer, including me is entitled to anything that’s not in the terms and conditions but if they ask for something minor or simple, such as a free coffee or a pen or a postcard or want to use the bathroom in the lounge then although it’s against the rules, it would be a great opportunity for a “thoughtful gesture” that made an impression and more importantly, may then be discussed on social media and negate some of the negative narrative.
The mistake I made was that I personalized a minor issue and as a result, people focused on my behavior instead of the airline’s attitude.
I copped a lot of abuse and I won’t make that mistake again. Although I can promise you I’m not an unctuous twat and do not consider myself entitled!
Although this post is almost inevitably a branding lesson for Malaysia Airlines, it’s also a branding lesson for any company that doesn’t appreciate the importance of retaining customers.
At the risk of stating the obvious, customers are key to a brand’s success. After all, you can’t build a brand without customers although there are probably some advertising agencies that would dispute that.
Retention not aquisition should be at the heart of any Malaysia Airlines restructuring
Loyal customers are generally the most profitable of all. And as I wrote in my book, if you have enough loyal customers and look after them, you don’t need to spend the equivalent of the GDP of a small Scandinavian country on advertising to keep selling to new people.
Just think about it. If every customer you ever had came back over and over again and never left you, it would hardly matter how slowly the numbers built up. Fast or slow, your business would grow.
If every new customer became a convert for life, most of the risks would be taken out of running your business. Simply put, you’d be able to plan your sales and production, predict your cash flow, know when to open and when to close, recruit the right people at the right time and know exactly when to commit yourself to a new factory or, in the case of an airline, new aircraft.
Branding means looking after your customers. If you do, why would they leave?
In a situation like that, the only way is up. Unfortunately, though, it’s not going to happen. Customers don’t just come. Repeat business and customer retention rates are never going to be anywhere near 100 per cent in practice. Customers will leave too. But the absolute key to building a brand is getting more of them to stay.
And the reason why is because once they’ve become a customer presuming the experience from their perspective was a success, they are likely to come back again. According to one report, once a customer buys something, there’s a 70% chance of him coming back. And, once he’s back, he’s likely to stay.
So how do you get more customers to stay? Obviously, by offering something that’s more attractive than the offer your competitors put up against it. Actually it’s easier than that because quite often a loyal customer will be oblivious to what the competition as to offer anyway.
But that’s not as easy today as it was 20 or even 10 years ago. There are companies out there who can manufacture what you manufacture more cheaply. There are companies out there who can get the same product as you to the market more quickly and in smaller or larger quantities than you.
Unless you are very lucky, there’s only really one advantage that you have over your competitors and that is your company’s relationship with your customers. That relationship, managed properly can never be duplicated.
And good relationships are the key to repeat business. Once Malaysia Airlines returns to profitability, and take it from me that it will do and ahead of target it will then need to start rebuilding it’s brand.
Customer experiences must be improved at Malaysia Airlines
And if it really wants to rebuild its brand, and continue to make a profit once it starts to increase prices, which it will have to do, it must start to place relationships with existing and especially loyal customers at the heart of its turnaround strategy.
Malaysia Airlines must be prepared to invest in getting to know its customers by collecting the right data about them, developing relationships with them and then leveraging those relationships to generate higher sales and the referrals that will bring in more customers.
Malaysia Airlines must understand that building businesses today requires a relational, rather than a transactional, approach to doing business. This will be an almost 180 degree change in direction from the way it is managed at the moment.
The customer who is attracted to the airline because of a discounted fare but has no relationship with it will walk away the moment he sees the same thing cheaper somewhere else.
But customers who feel they are getting something out of the relationship, beyond the individual transaction, will stick around.
That ‘something’ the customer gains will depend on its ability to deliver emotional, economic and experiential value to every customer. And this is going to be hard because a lot of customers have now experienced the competition.
Branding isn’t transactional, it’s relational
This is where branding gets complicated because it requires C level executives and senior management to refocus and move away from the ingrained, traditional ways of running a business. And for Malaysia Airlines it will mean tearing up the very strategy that got it back to profitability.
Most difficult of all, it means they have to give more responsibility to front line staff, many of whom they frankly don’t trust to do the right thing.
And much of that lack of trust is based on the fact that those management and C level executives see staff as a cost not an investment.
Even after the massive cull that has seen more than 6,000 workers retrenched, the carrier is staffed with people who simply don’t have the skills to represent the brand at this critical time.
But it’s also because whilst the ‘turnaround’ focus has been on slashing costs, the organization still suffers from a traditional, top down approach to managing the business.
A case in point is yet another depressingly familiar experience with Malaysia Airlines. As I’ve said many times before, I fly fifty times a year domestically with Malaysia Airlines and anything from two to ten times internationally. I’m not a major customer but I am a loyal one and continued to fly with them through the dark days of 2014.
If you are a regular reader of this blog, you will know how loyal I’ve been to Malaysia Airlines. You’ll know how I flew repeatedly following those 2 tragic events of 2014 and despite the fear and the mess the management and government made of engaging with the global media, family of those lost in the disasters and other stakeholders, I kept flying.
I don’t expect to be treated like a VIP but I expect to be appreciated otherwise I’ll take my business elsewhere
But like just about every other consumer, my loyalty shouldn’t be taken for granted. And if the quality of the product provided deteriorates and there is no attempt to reach out to me in a human way during that process, then it’s only logical that I’ll start to look for other suppliers. If those other suppliers deliver value to me, why would I go back?
Malaysia Airlines never reached out to me despite my loyalty. I wasn’t looking for much, perhaps an unexpected upgrade here, an invitation to use a lounge when travelling economy or perhaps some bonus miles as a gesture of appreciation.
Sure there were times when I picked up a few bargains during travel fairs but they weren’t personal and required me to invest hours of my time sitting in front of my computer waiting for the page to load.
Since 2014, the brand continued on its downward spiral to ignominy thanks to a ‘transformation plan’ that resembled the cast of a disaster movie as they stripped everything out of a plane in a desperate attempt to keep it in the air.
The quality of the product, the aircraft, the offering, the service, the ability of the brand to deliver value to me and on my terms degenerated to such an extent that I’ve finally started to cut the umbilical chord and over the last 12 months, I’ve booked me and/or my family on British Airways, Emirates, Singapore Airlines, Silk Air, Air Asia and most recently, Malindo.
All of the bookings are on routes served by Malaysia Airlines and only one of them because Malaysia Airlines was full on that sector.
Last week I was flying Malindo on a domestic sector that I always fly Malaysia Airlines. My Malindo experience wasn’t perfect (For the first time ever, my flight departure time was brought FORWARD which could have caused havoc with my work schedule) but my expectations weren’t high anyway.
Although I wasn’t even travelling on Malaysia Airlines, I still managed to have a negative experience with the carrier.
Let me explain. When I got to KLIA I thought I’d try to use the Malaysia Airlines business class lounge. After all I was flying business class and besides, I’m a gold member of their frequent flyer programme (FFP) and have been as long as they’ve had one.
A tale of two toiletry bags. Emirates offers a brand experienceMalaysia Airlines does what it has to do
To qualify for a Gold card which is what I have, you need 50,000 Elite Miles or 50 Elite Sectors. If I’m not mistaken, you get 2 elite sectors for each business class flight and one for each economy class flight. This means I’ve travelled at least 25 times in business or 50 times in economy.
My most common route is KL to Kuching so let’s say for the sake of argument that all of those sectors were KL to Kuching. The fare to Kuching is about RM1,000 for business class so at a minimum I’ve spent RM25,000 to get those 50 elite sectors. Not a lot but if you add it to the other fares it starts to add up. To become a Platinum member I’d need to spend about RM65,000.
When I got to the Malaysia Airlines lounge I asked if I could get a cup of coffee. Long story short, the receptionist said I couldn’t and nor could a Platinum member however, and here’s the kicker, anyone can access the lounge for RM200 (US$50).
As you can imagine, this wound me up. Royally. I support a brand through the most difficult period of its history and encourage others to do so but I can’t get a cup of coffee in the lounge.
However, someone who has never flown the airline before and may never do so, can drop RM200 at the door and sit in the lounge as long as he likes.
That simply doesn’t make branding sense. Whilst the motivation for doing this is obvious, isn’t it a bit shortsighted? It was the last straw and I wrote this in my business class seat on an Emirates flight to London.
Sitting next to me was my wife and in economy were two of our kids. We spent about RM30,000 (US$7,500) on this trip but would have spent it on Malaysia Airlines. During the trip to London we met up with a group of about 20 Malaysian all of whom, bar two had flown in on Emirates.
Now I’ve flown the ‘world’s best airline’ it’s going to pretty hard for Malaysia Airlines to win back my business. Even my wife who travels more than I do and is a true patriot and blindly loyal to Malaysia Airlines admits it’s going to be tough to go back.
You could argue that not allowing me to use the lounge for 10 minutes has cost the airline perhaps RM250,000 a year from my family. Every year for the next say 10 years. That’s RM2,500,000 of lost revenue.
Of the group we met, 2 travelled first class on Emirates, 10 travelled business class and the rest economy. How much has that cost Malaysia Airlines? And it doesn’t take into account anyone who reads this or listens to my rants offline. Was it worth losing all that business over RM200? Of course not.
The Chairman doesn’t understand what constitutes a brand and what is required to build a brand. He probably assumed a rebrand was a new name or logo or positioning statement implemented with a global advertising campaign pushed out across all media for as long as the budget would allow.
Whilst Malaysia Airlines is restructuring it’s brand is being sacrificed
Someone on the restructuring task force should have been able to educate the rest of the team on what constitutes a brand and its importance during the turnaround process. As mentioned already, emphasis should have been placed on delivering value to customers and not simply slashing costs.
More responsibility should have been given to those staff on the front line who were interfacing with the few customers still travelling on the airline.
The FFP should have been revamped immediately with personalized communications, ongoing engagement through unique dialogues to build an ecosystem of supporters willing to discuss the brand positively.
A concerted effort should have been placed on creating positivity about the airline. A transparent approach to building a new narrative, openness and humility should have been the foundation for any communications, not poorly thought out advertising campaigns.
Instead, with no one guiding the brand, much of the narrative around Malaysia Airlines has been negative, related to the 6,000 plus personnel that have been laid off and the replacement of modern aircraft with old, worn out planes.
Pictures appeared online of masking tape used to fix breaks in the business class cabins of old 737s on routes that had normally been served by much newer aircraft.
Unlikely to inspire confidence in the Malaysia Airlines brand
Discussions and complaints raged about the lack of alcohol on flights of less than 3 hours and then the departure of the CEO after only a year or so of a 3 year contract generated more negativity. More recently, the new CEO made headlines for his comments about charges at terminals one and two.
Non stop negativity surrounding Malaysia Airlines is destroying the brand
Now I expect a lot of people reading this will say I’m being petty and besides, the airline is right. They need to have rules in place and if the front line staff were given freedom to make such decisions, it would be open to abuse.
Others will say that few airlines will let travellers into a lounge if they are not flying with the airline and they are probably right although many of them would let a frequent flyer use the lounge. Bbut that’s not the point because unlike the Malaysia Airlines brand, the majority of these airlines don’t have a broken brand.
But most importantly of all, branding today is about small steps, it’s about the small things that matter to customers. There is no more ‘big idea’ or other traditional mass media solution that speaks to everyone in the same way.
If you want to restore a broken brand you need to focus on many, many little things to make sure the brand get’s fixed quickly. Move the narrative away from negativity to positivity, from mass communictions to personalized collaboration.
Emirates is a classic example of an airline that understands branding. It spends a phenomenal amount of money building its brand. Not just through communications but in the experience and relationships.
Despite suggestions of a deeper issue at DXB, Emirates investments in its brand meant it had plenty of equity in the bank. Crucially, this meant there was little negative news to write about the carrier following the crash.
The event and the fall out was managed effectively and efficiently. Fortunately other than one brave fireman, there were no fatalities and the international media had little interest in building a story around the crash.
That’s one of the many benefits of real branding. The equity you have comes in handy when you need it. A week after the crash, it’s business as usual at Emirates.
Compare that to Malaysia Airlines, two years after the twin tragedies. It’s still struggling and continues to slash prices and the quality of the product.
Malaysia Airlines will return to profitability thanks to labour cuts, more old aircraft, new supplier deals and low oil prices. But unless it learns some harsh branding lessons and starts to invest in its brand, it is unlikely to stay profitable for very long and will struggle when it begins to increase fares.
Back in February 2016, Volvo VP of global marketing Thomas Andersson talked to marketing week about the new global vision for Volvo after the launch of their rather cliche ridden yet compelling emotive ad questioning the motivations of automotive manufacturers around the world.
You can read the full interview here. To be honest, I found it a bit confusing. Andersson says, “We want to have a strong social message as if we just went down the same old route as our rivals [with celebrity campaigns] we would just be one of many, we wouldn’t be adding anything new. I believe the public want brands to stand for something important.”
The interview ends with a reference to the brand’s association with Avicii. I don’t know what this is exactly but do associations with DJ’s communicate importance?
Another comment that got my attention was ““Social plays such an important role when it comes to early adopters. They want to engage with Volvo but if we don’t respond quickly they will lose interest and move on. There’s a huge opportunity for us to engage more quickly and be there when people want to talk to us, and these changes enable that to happen.”
Yet the above video was deemed ‘unlisted’ on Youtube and carried a warning to “Be considerate and think twice before sharing.” I’ve never seen that before and seems to go against the very point of posting a video on Youtube. Unsurprisingly then, the video has only been viewed 1,771 times. I was surprised though to see that there was no attempt by Volvo to respond to the three comments.
Not long after I came across this digital ad from Volvo here in Malaysia. I couldn’t make sense of the ad, can you?
What is the point of this ad?
The Volvo brand has been tinkered with too often and it’s good to see them getting back to their safety roots. I think there is mileage in this approach. But they need to join up the global dots quickly. Local implementation is good but it still needs to be monitored and linked back to the global strategy.
More than 4 years ago the Malaysian Prime Minister Najib Razak set up a department tasked with building the Malaysia nation brand. We had a number of meetings with the head of the new department but her understanding of what constitutes a nation brand was very different to ours and so we didn’t get involved.
But we gave her plenty of ideas, one of which was that the Malaysian entertainer Yuna should be the face of any Malaysia nation branding initiative. I even wrote about it on my blog here.
Yuna never became the face of the Malaysian nation brand but she did feature in some Malaysia Airlines marketing campaigns but they didn’t really understand how to get the best out of such a potential game changer.
During those 4 years, Yuna’s career has continued to blossom and recently she became the first Malaysian to feature in Billboard’s Top 10 R&B Albums and Billboard’s Top 20 R&B/Hip-Hop Albums charts. The best selling single on that album was Crush, a collaboration with Usher.
I heard recently that the special department was being disbanded which is a waste because the Malaysia nation brand needs some help. Used properly, I still think this impressive young artist can rescue a once iconic nation brand.
The Rolls Royce Dawn has reached Malaysia. This beast of a motor from the most prestigious of prestigious brands is 5.3 metres long and weighs a tonne.
Actually it weighs 2.56 tonnes but who cares because it still glides effortlessly and silently from 0 – 62 mph (that’s 99kph in real money) in less than five seconds and it’ll keep going to 155 mph before the limiter kicks in.
The Rolls Royce dawn – phew!
According to Rolls Royce, the car is “a couple of decibels” quieter than a Wraith, which is itself rather quiet. Inside it looks like the lounge of a gentlemen’s club with plenty of leather, wood and no doubt a crystal decanter containing a pukka single malt somewhere.
At the launch this week Michael Ong group executive director of Quill group and the MD of Rolls Royce motors Kuala Lumpur waxed lyrical about how the new generation of Rolls Royce buyers are much younger and the Dawn soft top is popular with the sub 45 segment.
He wouldn’t disclose how many Rolls Royce’ were sold to that segment in Malaysia last year or indeed how many were sold in total. However he did disclose the Dawn will cost RM4 million which at today’s exchange rate equates to about £758,000.
You won’t want to give this to the Changkat valet guys!
The car is on sale in the UK for between £250,000 – £300,000 or about RM1,320,000 – RM1,600,000. The disparity in cost creates the ultimate branding challenge. I mean who in their right mind would spend 2.5 times what a car should cost? Who in their right mind would drive such a car on Malaysia’s notorious roads?
Selling enough of these cars to justify its existence in the small Malaysian market is the ultimate branding challenge and yet perhaps it isn’t. Quill group will know exactly who to target. They will have a database of names to contact and invite for a discreet viewing and test drive. In fact they probably already have which explains Mr Ong’s quiet confidence.
They’ve probably already delivered some to those who pre ordered one in the hope that they are the first to own one in Malaysia. Quill will be having discreet parties, unique events and arranging trips to the Rolls Royce factory and to the artisan factories of those who contribute to the production of this beauty.
In many ways, it’s not only the ultimate branding challenge, it’s the ultimate testament to the power of brands. How many brands are doing this? How many brands have built relationships in the way Quill must have done to ensure it can sell a product that’s three times as expensive here than it is in the UK?
But that’s how you build a brand. Not through sales but through relationships. Are you investing in your relationships? If you are, then you could one day charge 3 times what a product is worth.
Malaysia Airlines’ latest Twitter campaign is live. It really seems as if the struggling carrier sees digital and social media as another version of mass media – as a channel for pushing a corporate message onto an unsuspecting public.
Over the last couple of years they’ve made some terrible blunders online and you can read about them here and here.
Today the attached post appeared in my Twitter feed.
why would anyone share this pointless tweet from Malaysia Airlines?
In an attempt to increase sales of business class, the marketing department seeks to make the business class offering unique by telling you that if you buy a business class seat you can have access to the business class lounge before your flight leaves!
Isn’t that stating the obvious? Doesn’t every business class passenger have access to the business class lounge? Or does Malaysia Airlines not allow business class passengers to use the business class lounge?
And if you click on the link in the tweet, you go to the golden lounge page on the website. That’s it!
That’s it? A page with standard information on the lounges?
Seriously Malaysia Airlines marketing department, is this the best you can come up with? If it is, give me a call. I promise we can do better as you stop advertising, start branding.
The Lions are awards given out at the Cannes festival, an eight day celebration of creativity. Tens of thousands of awards are submitted and every man and his dog in the advertising industry wants to win a Lion. An agency can bring in business for years if it’s won a Lion. Even if the creative genius who won it has long gone from the agency.
This year, despite submitting 325 entries, Malaysia’s advertising industry failed to win one single Lion, despite the number of Lions awarded to firms in Asia increasing from 209 last year to 263 this year.
The awards went to agencies from the following countries with last year’s awards in brackets:
1. Australia – 71 Lions from 1782 entries (51)
2. New Zealand – 57 Lions from 526 entries (20)
3. Japan – 46 Lions from 1736 entries (35)
4. India – 27 Lions from 1315 entries (15)
5. Thailand – 23 Lions from 558 entries (9)
6. Singapore – 14 Lions from 688 entries (18)
7. China – 9 Lions from 1022 entries (17)
8. Hong Kong – 5 Lions from 386 entries (2)
9. South Korea – 3 Lions from 309 entries ( 11)
10. Taiwan – 2 Lions from 144 entries (0)
10. The Philippines – 2 Lions from 253 entries (1)
10. Vietnam – 2 Lions from 89 entries (0)
13. Indonesia – 1 Lion from 119 entries (4)
13. Bangladesh – 1 Lion from 25 entries (0)
Other countries that didn’t win any awards were:
Malaysia – 0 Lions from 325 entries (6)
Sri Lanka – 0 Lions from 31 entries (0)
Pakistan – 0 Lions from 3 entries (3)
On the face of it this is a major kick in the teeth of the industry in Malaysia. Despite the fact that some advertising agencies have been known to create fake ads simply to try and win a Lion or two the Lions are still the holy grail of the industry. By the way, I’m not saying of course that that happens in Malaysia…
Personally, I think the empty and pointless measurement of the number of awards an agency has won in the past has nothing to do with the ability of the agency to deliver creative genius in the future. But sadly it’s enough to convince a CMO or CEO that the agency must be good. Of course we all know that the metric by which they should be judged is how many units of a product are sold.
But I think a lot of the blame lies at the feet of CMOs, CEOs and other business leaders in the country. To survive an agency can only really give a client what he wants and if he wants the same as the other guy then what can the agency do about it?
Tan Sri Tony Fernandes, the charismatic founder of Air Asia acknowledged this week that despite threats to do so, he has no right to change the name of Malaysia’s low cost terminal from klia2 to LCCT2.
Tan Sri Tony Fernandes. Charismatic but controversial and ill informed
This U turn is a relief to many because his spat with Malaysian airport operator Malaysia Airports over the naming of the second terminal at the country’s main gateway was becoming increasingly petulant and was yet another controversy Malaysia’s damaged brand could do without.
Nevertheless, the outspoken entrepreneur hasn’t given up on the project and is scheduled to meet the Malaysian Minister of Transport today, June 29th.
Tan Sri Tony was quoted recently as saying, “I’m doing a marketing campaign and the minister knows that. There is nothing wrong with it.”
He added, rather confusingly “It’s freedom of speech. I’m allowed to do any advertising I want. Why are we always bullied? We are trying to do business here, to create jobs, to attract tourists.”
“Penalties, fines, that’s old fashion (sic). Aren’t we (AirAsia and Malaysia Airports Holdings Berhad) doing the same business together? Isn’t this good for Malaysia?”
“If anyone can tell me this is bad for the country, then I’ll stop,” Fernandes said, adding: “Let us work together to build something in this economic season.”
Well Tan Sri, what you are doing IS bad for the country and it’s bad for you and your airline as well. In addition to having a negative impact on the nation brand, these very public spats between an airline and an airport operator do not inspire confidence in either organisation.
Malaysia’s transport minister
Furthermore, and I apologise in advance for being so candid but your rants are confusing, misinformed and contradictory. Promoting the nation’s second airport terminal as LCCT2 isn’t marketing, it’s illogical.
And confusing naming with a marketing campaign whilst suggesting you are a victim might gain you some sympathetic traction somewhere but it only detracts the reader from your stated aims.
Southwest Airlines, the largest and most successful low cost carrier and one I’m sure you are familiar with hasn’t tried to rename any of the terminals it has successful flown out of since 1971.
Newer low cost carriers such as AirArabia in the Middle East and IndiGo in India as well as the more established Jetstar in Australia and Gol in South America don’t fly in and out of terminals called LCCT, they fly in and out of terminals named terminal 1 or 2 or main terminal.
Other low cost carriers such as Air Arabia haven’t tried to change airport names to LCCT2
It’s also a bit naïve to suggest that changing the name of terminal 2 to LCCT2 would ‘reinforce Kuala Lumpur’s position as the leading low cost gateway to Asia and beyond’.
Firstly, the concept of positioning is outdated and irrelevant in today’s social media world where consumers are more knowledgeable and no longer need to rely on the word of the corporation. But even if it was relevant, who are you positioning it to?
AirAsia is responsible for something like 90% of the passengers at Malaysia’s second terminal. If you haven’t already sold your passengers an onward flight, do you think the name of the terminal is going to make any difference? No matter how much you spend on positioning the terminal, it won’t make a difference.
Secondly, where is LCCT1? Just because you know it doesn’t exist, doesn’t mean a young Beijing based Chinese travel writer travelling to SE Asia for the first time doesn’t know. But if he’s confused, he’ll write about it and I guarantee that’ll have more impact than any positioning campaign.
Thirdly, is it really possible to ‘reinforce Kuala Lumpur’s position as the leading low cost gateway to Asia and beyond?’ Irrespective of the fact that nobody else is trying to position Kuala Lumpur as anything or the fact that positioning doesn’t make sense, who is going to drive this? Have you got buy in from other stakeholders? And who is going to fund it? And how?
And what about the future? Which other airlines are going to use the LCC terminal? Already Malindo has moved to the main terminal. Do airlines really want to be associated with a LCCT? Especially when the experience of using the second terminal is not one passengers are enamoured with.
There is definately a need for consistency in the naming of the terminals at KLIA. It is logical to name the terminals one and two. Preferably KLIAT1 and KLIAT2.
And the next one can be called KLIAT3 and so on, just like Changi, Heathrow, Los Angeles, Sydney and just about every other easy to use and successful airport in the world that has chosen logic and the user experience over everything else when naming their airports and terminals.
Once the naming has been addressed logically and in line with global best practices, we can move onto the marketing of Kuala Lumpur and the airport and the freedom of speech and all the other stuff TS Tony mentioned. But only then.
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