I’m an occassional visitor to the site and particularly like their infographic of the day. Have a look at this one that depicts climate change as a haunting death spiral.
The article starts well enough with the fact that digital media is blunting the effects of advertising but then goes on to say that native advertising or branded content is a sham and nothing more than an attempt to trick customers into spending money. While getting customers to spend money is the aim of most advertising (as is quality design) it misses the point of what is branding.
The article does make some valid points about branded content and how it is not a strategic exercise or a long game. And this is true, it’s simply a tactic employed by brands. But it loses it’s way as it confuses tactics with strategy. Branding is a strategic exercise, most branded content is a tactic although some firms such as Coca Cola do it properly (see video below) and integrate it across channels and make it strategic.
The post then goes on to make the bold but ultimately wrong statement that, “Branding is, fundamentally, just a form of communication.” This is simply not true and I’m surprised such an auspicious publication allows such a claim to be made.
Indeed, it’s claims like this, from prestigious sources that are muddying the branding waters. How can CEOs make the investments required in branding if they are confused by what constitutes branding in the first place?
To make matters worse, it then goes on to say that debranding shouldn’t be confused with visual branding! Using a couple of niche brands as examples it says, “Such visual identities could be the result of debranding, but they are not the end goal. The real goal is a well-made product.”
I don’t understand the visual bit, but a well a well made product is definately a goal and any brand should start with something that is fit for purpose because no amount of communications will make a crap product good and certainly won’t build a brand.
But what’s really important is that the brand delivers economic, experiential and emotional value every time, and at every touchpoint and with everyone.
The mistake too many brands make when they start branding (or the advice they are given is wrong) is that they think branding is based on acquisition – it isn’t and they think that stringing together a series of tactical campaigns will build a brand – it won’t.
Products or services need to be sold. Companies need to make those sales but the ability to start delivering value at the first and subsequent touch points is going to lay the foundations for the success, or not of that brand’s relationship with the prospect/customer. And that relationship is what builds the brand.
Advertising, branded content, design etc may be required at some point (although increasingly consumers are not influenced by such superficialities and look for more personalisation and relevance) but critical is the ability of the brand to deliver the value I keep mentioning.
The article finishes with the statement, “Don’t throw a new product on the market if it’s not intrinsically better and more durable than what already exists. We don’t need more branding; we need fewer, better-quality products. Fine-tune your product’s quality, design, and its durability. Become a producer of shoes again instead of surrogate spirituality”
Whilst Chinese products may have had short term success because they were cheap, most consumers are moving back to quality products from more established manufacturers who have invested in tools to improve their efficiencies, making consumers the winners as products are better.
So we’re definately moving away from ‘cheap as chips’ junk. But at the same time, with a growing global population with more disposable income, there will always be demand for commodities but again they shouldn’t be confused with brands.
And besides, despite the advertising, the branded content and all the other tactics used to try and entice you, you don’t need to change what you are already happy with.
And bearing in mind that 80% of what most of us buy are the same things, one could argue that a lot of brands are already doing the right thing.
I was asked by some people why the email I got has anything to do with the Malaysia Airlines brand. I explained that in the social economy of today where consumers not companies define brands, it is the little things that brands do when interacting with consumers and how those consumers share their thoughts on those experiences, that build strong brands today.
I used as an example how much money Malaysia Airlines had spent over the previous 10 years on advertising whilst driving the brand experience into the ground. This meant that the brand had no equity in the bank and that if anything were to go wrong, it may struggle to rebuild its brand.
From the outside it looked like management had come to believe that the brand was defined by the company and as long as the company kept creating messages that the management liked, the brand would one day bounce back.
And then came the tragic events of 2014. The out of touch management didn’t have a clue how to address the issue and could not engage with relatives and other stakeholders. I compared their reaction to that of Tony Fernandez following the terrible Air Asia Indonesia accident of the same year and how his response was so ‘human’.
Following the twin events and with no equity in the bank because few customers were talking positively about their experiences with the brand, Malaysia Airlines had to be bailed out by the government and is still lurching from one problem to another.
I explained that whilst the interaction I had with Malaysia Airlines was small it was nevertheless a step in the right direction and if it was part of a strategic plan to start delivering value in key customer facing areas, it was a step in the right direction to save the brand.
I went on to explain that brands are not built with a big idea, a creative campaign or a one off interaction. They are built organically, over time and through little interactions at nearly every touchpoint. This isn’t rocket science but it is amazing how many firms still think they can build a brand through a creative programme.
And then today I read this article about a Virgin employee who works at San Francisco airport. Over the years he has adapted flight information boards to include famous quotes, jokes and irreverent announcements.
Rather than discipline the employee Steve Freitag, Virgin actively encourages him to make passengers smile. Passengers who encounter Steve Freitag will envariably talk about the experience and tell their friends.
No big idea thought up over a six month period and then turned into a slick advertising campaign. Just a real person doing real things and making life better for a minute for those people flying with Virgin.
In the case of my little experience with Malaysia Airlines it meant that instead of clicking my heels and the airport and wasting time I could ill afford to waste, I could spend an extra 45 minutes in the office.
And here I am sharing my experience with you through this blog and on Twitter and Facebook. And some of you are sharing my story with your friends. And together we are rebuilding the Malaysia Airlines brand.
RapidKL the operating arm of Government ownded company Prasarana recently took 8 corporate leaders on the Light Rail Transit (LRT) so that they could experience public transport and more importantly, be seen to be taking public transport in an apparent effort to “encourage the culture within their organization(s) and the public in general, as well as obtain their feedback for further improvements. This is a continuous effort from our end to get key leaders more involved in understanding the need to further enhance public transportation services in the country.”
However, The Heat Malaysia, an increasingly popular source of news for Malaysians called the event a ‘failed PR stunt’ and wrote a long article critizing the event and suggesting Prasarana misled the public by claiming it took place during peak time when in fact it happened between the hours of 11am – 2pm which can hardly be considered peak time.
Prasarana responded quickly with a decent explanation that was duly published at the end of the article. The Heat Malaysia site doesn’t appear to allow comments and it’s not possible to tell how many people shared the article on social media.
But never mind, all well and good so far and for many stories, this is quite often where it ends. Unless of course it is related to an issue that is close to commuter’s hearts. And public transport is definately close to the commuter’s heart. Which is probably why the Heat Malaysia didn’t leave it at that. They know a story with legs and so they also published the article on Facebook. And that’s when things started to fall apart.
Within hours, there were more than 50 comments on the post, nearly every one of them negative. By 2.30pm in the afternoon, Rapidkl cobbled together a predictable, corporate response, “Dear The Heat Malaysia, the recent online reports by the media covering 8 key corporate leaders riding the LRT during “peak hours” was inaccurately reported and had caused anxiety among some of our commuters. Please allow us to correct the facts and inform that the hour spoken refers to the afternoon “lunch crowd” and not peak hours as mentioned in the reports. The leaders were given an opportunity to experience taking public transportation as an effort to encourage the culture within their organization and the public in general, as well as obtain their feedback for further improvements. This is a continuous effort from our end to get key leaders more involved in understanding the need to further enhance public transportation services in the country.”
This typically contrived, corporate driven, out of touch and dated response generated even more negativity with Evelyn Toh asking what all of us were thinking would have been the right approach from the start:
24 hours later there was no let up in the abuse. And when Halim Hassan uploaded this image of the VIPs sitting in seats reserved for the elderly and disabled, what started out as a good idea, became an unmitigated disaster.
However, there was still a chance for Rapidkl to salvage the situation. If it had shown its human side, put it’s hands up and apologised, explained how their intentions were honourable, how they were trying to get more cars off the road, increase use of public transport and make life better for everyone and that in future they would go out and meet with real, genuine commuters and not chauffeur driven VIPs and done a few other things it could have recovered the initiative.
But they did what far too many firms do and ran away from the problem. Despite The Heat Malaysia Facebook post getting more than 500 Likes and 164 comments, Rapidkl refused to participate in the narrative. Hoping it would instead go away. This is a classic example of how not to approach social media. Social media is your friend but the best bit of advice I can give any company is that if you intend to use it as part of your brand strategy then the first thing you have to understand is that you must be social, not do social.
Too many brands think that social media is to be used in the same way as they’ve been using traditional media – as the base for a series of poorly thought out ad hoc tactics pushing a corporate driven message. Social media is not something you do, it is something you are. Which means that the people responsible for your social media communications must know what they are doing. Being young does not qualify you for managing a firms social media communications.
And any social media initiative must be part of a clearly defined brand strategy. This is not rocket science yet so many companies feel they can simply jump into social media with an idea and announce the idea and expect it to spread out across the eco system in a perfectly choreographed, positive manner. This of course rarely happens. But until senior management learns and understands social media, and actively participates in social media, most social media projects will fail because the corporate culture dictates social media competencies and if the CEO is non committal then the culture will be non committal and that’s the wrong place from which to start.
The strategy is so important. All bases must be covered. The ‘what if’ scenarios must be carefully thought through and prepared for. And the team designated to develop the narrative must have the skills required to address any issues and communicate effectively and in tandem with the overall goal.
The irony is that Rapidkl had a good idea but they didn’t understand how to implement the idea and certainly didn’t know how to develop the narrative around the idea on social media. And as soon as it went wrong, they panicked and shut down. Nevermind, all is not lost. The public are a forgiving lot. The next steps though will be crucial. Let’s see what happens.
When we develop a social media strategy for a company we often have a hard time getting them to understand that there is a definite need for a well structured strategy with carefully thought out ideas and schedules. And once we’ve done that, we then have an even harder time explaining that because of it’s very dynamic nature, social media also requires the ability to have a nimble and loose approach to engagment. It’s almost a contradiction in terms.
But the ability to engage consumers and address certain issues ‘on the fly’ and in a human way is often more important and more effective than trying to push out corporate driven ideas and messages. Often, consumers will look at the way a company reacts to a unexpected situation and develop their perception of the brand based on that interaction.
A story broke today (Wednesday) about a young customer at Pret a Manger, the legendary UK sandwich bar that has grown from one outlet in London in 1984 to 374 outlets in 2015 and turnover of £500 million. Now Pret a Manger will have a social media team either in house or outsourced. That team will have a strategy but also SOPs for unique situations.
The customer purchased a ‘Chef’s special avocado and crayfish wrap’ from his local branch that he said, from the first bite was, “possibly the worst tasting item I have ever eaten. It tastes like my daughter’s sandpit.”
He went on Twitter and told the company how unhappy he was with his lunch and they responded immediately with an offer (after taking the discussion out of the public domain and into direct messages) of a free lunch as compensation.
Impressed, he congratulated them on their service and shot off a text that was apparently a reference to a Jay Z and Kanye West song about Paris.
Pret got it immediately and responded with a pun of a Jay Z lyric from his Problems song. The customer then came back again, this time with a play on Silento lyrics which Pret responded to using a play of the Weeknd’s ‘I can’t feel my face’ song.
And so it went on for about two hours, with references to Taylor Swift, Notorious BIG, Dizzee Rascal and finally Adele.
The story was taken up by the national press in the UK with both tabloids and serious papers running stories that reached millions of British consumers in a very short time and hundreds of them commented on the issue or shared it across Facebook, Twitter and other platforms, thereby increasing the positive narrative about the brand. And all from a negative experience.
In addition to the ability of social media to cover many traditional roles, this is a great example of why it is important to have the right people with the right authority who understand the organisation’s values responsible for the brand.
Other lessons to be learned from this little exchange include
1) A humanized approach works on social media. Don’t try to be a corporation, it’s the wrong place
2) Know when to go with the flow. In other words, don’t do social, be social
3) Your customers generally have good intentions. Be nice and they’ll be nice to you
4) A sense of humour goes a long way on social media. Just like in real life, which social media is
5) There really is something called a free lunch. Well this time anyway
6) A structured social media strategy is important but knowing your contemporary music is a must. Presuming you have 2 hours to kill and your boss isn’t around
7) Social media has a reach traditional media can only dream about. So why are you still putting all your money into traditional media?
8) Who needs advertising? Seriously, who does?
9) The right social media approach gets instant results. Are you using the right model?
10) In the right hands, social media is an effective sales/marketing/advertising/customer service/retention/awareness tool. Is your social media in the right hands?
What’s the downside of this experience? There really isn’t one. The exposure was phenomenal and cost Pret nothing more than another sandwich and two hours of a social media team members time. A bit of creativity from the social media team generated more effective brand exposure than any billboard, TV or print ad could ever do. And for a fraction of the cost.
What I’m interested to see is how Pret a Manger leverages the experience going forward. If I hear anything I’ll let you know.
The print industry is changing rapidly. Publications are increasingly niche or evolving around new industries such as airbnb. The hospitality company with the largest inventory of beds but doesn’t own a single hotel launched Pineapple last year. It doesn’t aim to market the brand but instead inspire people to travel and of course hopefully use the company.
Another new ‘investment and Lifestyle journal’ from Singapore called Cache was created not by a publishing house as a way to generate revenue but by a conglomerate with multiple interests in the luxury and related sectors.
Although advertising revenue will help to fund the project, the main aim is to generate contacts for much more lucrative deals. These and other new publications have a different take on the publishing industry.
They are not so much worried about readership, rate cards and revenue, but more interested in reinforcing their brand values, enhancing their reputation, generating organic leads, building strategic relationships and adapting the online media platform model of being content sharers not creators.
So when I came across this interesting post called “100 brilliant print adverts” on the influential creativebloq site, I was intrigued because I thought it would be fascinating to see if the ads had a place in the new world order of publishing. Sadly, for me anyway they didn’t. Well certainly not the first 13 or so ads because after the VW ad I got bored.
Sure there was some creative genius in there as well as some comedy gold but there was also a lot of nonsense that just made me think I’d seen it all before. Traditionally, a good print ad must do six things
1) Be memorable and easy to recall
2) Connect with its audience
3) deliver useful information quickly
4) Make absorbtion of information simple
5) Don’t confuse the viewer or force them to have to do any hard work
6) Have an simple call to action
And historically a good print ad should include these elements
1) A strong headline
2) A unique or provocative image
3) No more than 3 paragraphs of well written copy
4) A logo and/or contact information
Advertising companies are ignoring these rules in an attempt to get our attention. But it is very hard to be creative after 150 years of advertising. And even if the creativity, the sexuality, the humour or the horror of an ad gets our attention, it doesn’t mean we’re going to interact with the brand.
Furthermore, consumers don’t engage with new brands the way they used to and besides, we are now carpet bombed by so many messages every minute of every day that most of us simply block out the noise.
Add the proliferation and fragmentation of media, the sheer number of ads, the ridiculous claims made in ads and the changing nature of how we absorb information and news means we don’t really need ads anymore.
Moreover, the concept of the ad that has to be conceptualised, created, approved, produced and distributed means it can take 6 – 12 months before a campaign sees the light of day and in that time, an idea can become obsolete.
However, according to the graph from statista below, worldwide spend on print advertising has dropped from a high in 2000 of US$152.2 billion to US$119.6 billion in 2014. The same report suggests spend on print advertising will grow to US$123 billion in 2016. Admittedly that growth is maginally positive but I can’t help but think that turning up the noise isn’t going to change the fact that we’re not really paying attention to advertising anymore. I can’t help but think that in the new publishing world, we’re not interested in ads, we’re interested in what others like us have to say.
And in this environment, firms would be better off saving the money they spend on advertising and use the money saved to generate content about their business, build relationships with their customers and encourage those customers to share that content. The debate rages about whether print advertising is dying or already dead.
Personally I don’t think it’s dead but it is wounded and unless it reinvents itself, it may soon be irrelevant.
I recently wrote an article on the state of advertising which you can read here. The post went viral and I have been criticised a lot, especially on Linkedin and you can read the comments here.
I still don’t think advertising is effective. Here are 5 more reasons why advertising doesn’t work
1) I’m not looking to replace advertising. Advertising needs to get its s*** together because it is losing credibility. Moreover, much of it is ignored by consumers who spend their lives multi screening and simply tune out when they see ads.
2) Far too many companies advertise for the wrong reasons, often simply because of their ego. They get a kick out of seeing their brand on a billboard or their friends telling them they saw their brand on a billboard.
Or they advertise because everyone else is advertising but for most of them their advertising never makes an impact. I’m not talking about Unilever, Nestle and the other 8 companies that own 80% of the world’s brands because they have the kind of deep pockets most firms can only dream of. I’m talking about the rest of the companies that make up most economies.
3) My personal belief is that because so many advertising campaigns are too short and don’t run for long enough, the vast majority of advertising is a complete waste of money and that money would be better spent on brand building rather than advertising.
4) Technology has changed the way we live our lives yet we’re still doing things (in terms of advertising) the way we always did. Airlines continue to sell themselves with pretty girls and big smiles and white teeth and with a pretty child holding a teddy bear (OK no child with teddy bear in this example but you get the point).
Exotic destinations use white sandy beaches, purple seas and clear blue skies, banks use ridiculously handsome couples and children and cars use all of the above. It’s boring, unbelievable and doesn’t match the experiences of others who have been there.
And we can read about their experiences online or from our friends. And those experiences, not advertising influence our decisions.
5) Firms would be better off focussing on core branding competencies – a) strategic (inspire & aspire) – trust, credibility & communities, leadership & segmentation. b) Communications – building the narrative collaboratively and social engagement through multiple platforms. c) Execution – on brand organisation able to deliver on promises, data collection and use, monitoring &messaging and d) connection, engagement and collaboration with relevant communities and influencers.
How we do that depends on the organisation, the industry, the customers and budgets and other constraints. Advertising is bandied around as a silver bullet. Want to increase awareness? Advertise. Want to change perceptions? Advertise. Want to increase sales? Advertise. Want to increase share of wallet? Advertise. Got a crisis? Advertise. But there is no silver bullet.
Building a brand takes a strategic approach to multiple actions and requires commitment and buyin from everyone. Advertising is a tactic and for most brands – there are some exceptions, such as a new movie launch, or an exhibition or property launch – it simply doesn’t work and money spent on advertising would be better spent on building a brand.
Just about every survey I read suggests social media marketing will take a larger piece of marketing budgets over the next 5 years. One recent survey suggested social media spending will increase 144% over current levels by 2019.
But few companies in SE Asia really know how to use Social Media, especially when it comes to engaging with consumers and dealing with issues raised by those customers. I spend half my time trying to explain to customers that social media isn’t another platform to broadcast a carefully carved corporate driven message to anyone and everyone.
We liken social media to a virtual coffee shop where you talk to people as equals not as an old fashioned brand talking down to ‘stupid’ consumers in a patronising manner with a predetermined message.
Social media requires an ability to be real, to be human, spontaneous, transparent and crucially, be able to resonate with each consumer on their level. This is of course a daunting task as it reduces the amount of control a company has over it’s messaging and it’s brand.
Here’s an example of how to successfully engage with customers on Twitter.
The good news is, according to another recent study, those companies prepared to invest in delivering good customer service on Social media see customers spending up to 40% more with that company.
So the next time a customer complains on social media, take the time to listen and respond in a human way and on their level. And you could see your income increase by 40%, more effective and a lot less expensive than any advertising campaign!
To build a brand you need to get a number of things right both internally and externally. And then you need to develop a long term profitable bond between your offering and your customers.
The best way of doing that is by delivering economic, experiential and emotional value to those customers and on their terms. That’s universal and there are no shortcuts. Of course how you go about delivering that value depends on your firm, your industry and your customers.
Historically firms have tended to try and use creativity to communicate a corporate driven message to as many people as possible, whether potential or existing customers in the hope that enough of them will see/hear the message, respond to it and buy into it so that the firm can get through the year.
According to Harvard Business Review and many other respected institutions, this model is obsolete. It’s also incredibly expensive with one expert saying it requires US$10 billion and ten years to build a brand in Europe this way.
Sadly that doesn’t stop millions of brands spending billions of dollars on an outdated and ineffective model that few of them can afford to sustain. This is particularly true of brands in Asia.
Nevertheless, there are some smart brands out there and social media provides an excellent platform to showcase their tactics. Instead of wasting marketing dollars on expensively produced and immediately forgetable advertising campaigns, these smart brands are investing more money on retaining customers than acquiring them.
Of course this makes branding a bit more complicated because it means these brands need to get to know their customers and their needs and not just shove a message down their throats and expect them to accept it. Unsurprisingly making such an effort isn’t that popular with many brands, especially here in Asia. Sure they talk about how they want to understand their customer needs, some even say they love their customers but those claims rarely translate into reality. As a result Asian consumers tend to be less loyal to brands.
OK, rant over! A couple of great tactical campaigns have come to my attention recently and there are a lot of brands around the region that can learn from these activities. They required an investment in researching customers, understanding them personally and then providing simple solutions that resonated with those customers. The investment was minimal but the exposure is exceptional and ongoing.
The first example is from Canada’s TD Bank. For a week in July, Automated Teller Machines (ATMs) in branches across Canada became Automated Thanking Machines and in addition to dispensing money, they spoke to and engaged customers, thanked them for banking with TD and delivered personalized gifts.
The bank gave out flight tickets to one customer so that she could fly to Trinidad to visit her daughter who had cancer. Another lucky recipient won savings accounts for her children each with C$1,000 deposited in the account.
Another customer won a trip to Disneyland and a Baseball fan won the right to throw the first pitch at a Toronto Blue Jays match, lots of merchandise and met one of the players. Phone and online customers were also given deposits directly into their bank account.
The response was phenomenal and four months later it continues to gain valuable coverage in social media and in the mainstream media with the UK’s Daily Mail covering the story in August.
In the first 4 months the video was viewed 17,500,000 times on Youtube, gained 50,000 Likes and 5,000 comments that generated extensive conversation that is still ongoing. On Facebook the TD Bank page has generated almost 550,000 Likes.
More recently, KLM wanted to reach out to customers travelling through the world famous Schiphol airport in a personalized way by giving friends and family the chance to say an extra goodbye. Working with the airport, the carrier identified families saying goodbye to each other at the airport and approached them with the chance to create a nice surprise for the traveller by personalizing the cover on their seat headrest.
In the first week the video on Youtube has already been viewed 208,000 times with 150 Likes and 30 comments. On Facebook the campaign has generated 16,500 Likes, nearly 2,000 shares and 550 comments. As the campaign gains momentum those numbers will, err soar skywards.
Social media allows brands to engage customers and allow them to participate in the development of the brand narrative in a way that those brands using a traditional approach can only dream of.
It’s very hard for a lot of brands to understand they can no longer control the message and instead they must pass on some of the control to consumers and let them develop it.
Once the campaign gains traction other consumers share it across the ecosystem and with the right management and before you know it, a minimal investment has generated far more brand goodwill and sales than any traditional advertising campaign is ever likely to do.
The recent announcement by the Malaysian government that it will invest RM6 billion of public funds to revive Malaysia Airlines (MAS) is a good idea and one that should be welcome by every Malaysian.
The national carrier is a source of immense pride for Malaysians and so it should be. In the broader perspective, MAS has an exemplary safety record, provides direct and indirect employment for thousands of Malaysians and was profitable for many years.
Furthermore, when managed effectively and innovatively and when the importance of morale was understood, the national airline played a major role in defining the Malaysia Nation Brand as it was the first touch point for many of the more than 10 million passengers carried annually.
Moreover, through MAS, Malaysia got the opportunity to reach out to consumers with a physical product, develop a relationship with them and build a profitable business at the same time. Many of the millions of Europeans who flew the ‘kangaroo route’ from Europe to Australia and New Zealand became brand ambassadors for the carrier.
Much of that goodwill has been eroded but the brand is still intact but there is a lot of work to be done to rebuild global trust in the brand. The recovery plan that will require sweetheart deals to be renegotiated, staff numbers to be reduced and other major restructuring initiatives are just the beginning. Rebuilding internal branding and developing a strong, innovative, customer focused external brand strategy will be just as important.
While the airline restructures, it needs to continue to operate. In June 2014, when MAS CEO Ahmad Jauhari Yahya told shareholders that the MH370 incident had “sadly now added an entirely unexpected dimension, damaging our brand and our business reputation, and accelerating the urgency for radical change”, I was expecting, well radical change.
Externally, it looks like that radical change consists of nothing more than slashing prices!
MAS is reported to be offering cut price ticket prices from the UK, Australia and New Zealand to Kuala Lumpur in an attempt to do what regional senior vice president Lee Poh Kait termed as, “inspire and encourage customers to dream, plan and book their next holiday, and help rebuild trust in Malaysia Airlines.”
Mr Lee also told Australian news site news.com.au that, “With unbelievable savings, these deals are a very competitive offering as we build a stronger Malaysia Airlines.”
He also went on to say, “We are committed to regaining the confidence of our customers and sending them on memorable holiday experiences as a trusted five-star carrier.”
In addition to slashing prices, MAS also launched ‘My Ultimate Bucket List’ competition with 12 return flights to Kuala Lumpur and 4 iPads as prizes.
Its not uncommon for bricks and mortar retailers to slash prices in the face of poor sales and it’s a familiar tactic of low cost carriers looking to sell excess seats. The idea is you attract new customers who might not have bought from you and you get a spike in sales that will get you through the lean times. But we’re not selling soap powder, software or biscuits.
An international airline that competes in the same space as Singapore Airlines, Cathay Pacific and the increasingly aggressive Middle Eastern carriers and is reeling from two tragic events is not going to build a stronger airline or rebuild trust by slashing prices.
Slashing prices gives the impression the project is cheap, something MAS cannot afford to do. It also smacks of desperation and lowers the value of the product to that of a low cost carrier and may well cause customers to lose not rebuild confidence in the airline.
Furthermore, by slashing prices, MAS is throwing away all of the pricing power it has built up over the past few years, power that will take years to win it back.
The regional senior vice president also said “We would like to thank all our travel agency partners and passengers for their relentless support during what has been a difficult period.” I understand that MAS has also doubled the travel agent commission rate to 11% till mid September.
At the same time as this seat sale and travel agent incentive is launched, the MAS frequent flyer programme (FFP) Enrich is sending emails out to 14 year olds offering them the opportunity to earn extra air miles if they book a hotel with the MAS hotel booking partner. Not many 14 year olds book hotels.
Enrich marketing is sending out up to 8 emails a month asking members to play golf at the Mines, get double miles when they fly with Firefly, take advantage of a sale at shoe shop Lewre and various other offers.
After flights, the airline is also sending an email to travellers asking them to complete a survey that asks questions such as “At which airport did you board/leave this flight?” and “Class of travel” as well as questions that the answers might be good to know but don’t identify causes of dissatisfaction or provide any real actionable data.
Meanwhile, while MAS offers travel agents double commission on bookings, MAS loyalists who have flown more than 20 times since MH370 went missing in April 2014 haven’t received personalized communications from the airline thanking them for their support or an offer of free air miles, upgrades or other shows of appreciation.
Based on this evidence, it would appear MAS has essentially ignored its existing customers and frequent flyer members and instead gone out and offered special deals to all and sundry in the hope that enough of them will take the bait and fly the airline.
This discounting approach will do little to regain trust or repair the battered brand. Here are 6 tactical initiatives MAS should be doing to rebuild trust before slashing price:
1. Existing customers are more likely to buy than those who haven’t bought before
Right now a focus on gaining new customers or market share is a misguided approach. Yet MAS, like so many firms is attempting to do just that whilst ignoring its existing customers. The MAS FFP Enrich is rumoured to have more than 1,000,000 members. The database of Enrich members is a potential gold mine of revenue that needs to be cleaned and leveraged properly and quickly with a well planned and implemented programme.
2. All data is important
OK, MAS probably doesn’t need to know the name of every FFP member’s pet but it does need to know enough data to know what products should be sold and to whom and how to increase share of wallet.
Consumers are willing to share more information than ever before and MAS needs to start collecting data and sending the right offers to the right people. Sending invitations to book hotels to 14 year olds is sloppy and shows a lack of professionalism and that will do nothing to rebuild the brand’s reputation.
3. Leverage the power of social media
Each customer’s experience is defined by the economic, experiential and emotional value of each ‘moment of truth’ when interacting with the brand so mass advertising campaigns either online or offline and slashing costs are not going to rebuild the MAS brand.
There is a great deal of sympathy out there for MAS and a bright, real, transparent, honest and consumer driven campaign on social media about real people travelling on MAS will inspire more people to develop a relationship with the airline (and relationships are the goal, not selling seats) than any seat sale with a weak call to action.
4. Branding is about experiences and relationships, not one off sales
Few consumers are going to develop a relationship with a brand based on a one off sale. And besides, legacy carriers can’t compete with LCCs and the moment MAS tries to increase prices, those customers won on price will go elsewhere. MAS must start building relationships with its customers and leverage those relationships to increase sales.
The success of those relationships will be determined at every touch point which means the website booking engine, check in staff, customer service representatives, ground and airport staff, cabin crew, in flight entertainment, comfort and service, baggage operators, communications, helplines and more must be all be ‘on brand’ and on top of their game at all times.
5. Stop being lazy and start re building the MAS brand
There is no short cut to rebuilding the MAS brand. It is going to take a lot of effort strategically and tactically. Slashing prices and flooding the Internet with forgettable, price driven ads won’t turn the company around. The MAS website has been a mess for too long. No matter what the cost, funds must be made available to fix the booking machine and fix it quickly.
It’s also time to retrain front line staff as they currently do not have the skillsets required to deliver a premium brand that can compete with the aggressive ME carriers.
6. Think customer not customers
The customer is only interested in one thing, what’s in it for me (WIIFM). Yes many of them care about the airline but they aren’t about to risk their lives or those of their families.
Every single customer flying MAS in these difficult times has to be made to feel special (this should be part of the brand strategy but is particularly important now).
Those customers flying MAS now are the saviours of the brand and must be nurtured to become brand ambassadors and brand advocates who will be talking loudly about the fact that they are flying the airline now.
Make the experience a memorable one and they will talk loudly and for longer and do more to rebuild trust that any corporate driven advertising or PR campaign.
None of this is rocket science but these 6 top tactical tips will lay the foundations for the rebuilding of the Malaysia Airlines reputation quicker and more effectively than slashing prices.
Malaysia Airlines (MAS) embarked on a massive restructuring plan towards the end of 2011 with the goal being to reduce costs and return to full year profitability in 2013.
At the same time, the airline reported a staggering RM2.52 Billion (US$850 million) loss for 2011.
MAS didn’t realise its stated goal because in late February 2014, the national carrier posted a 2013 net loss of RM1.17 billion (US$356 million). This was almost three times the airline’s 2012 net loss of RM432.6 million.
So despite the restructuring plan, MAS lost RM4 billion in 3 years. Ouch.
In 2012, one assumes as part of the restructuring plan, MAS announced a business strategy with two key strategic elements – one to focus on the premium sector and the other to focus on the competitive Asian market.
I don’t know what the airline’s definition of the premium sector is but bearing in mind premium passenger numbers appear flat, a large chunk of its business comes from the domestic government and the price sensitive kangaroo routes, this may be a major challenge.
Furthermore, I’ve seen nor heard of any premium customer strategy or tactics. The ‘Flying in luxury’ section of the March 2014 issue of Going Places offers little insight into what might be happening. Even the benefits of being a platinum member of the Enrich programme haven’t changed in a long time.
Of course they could be referring to the upgrades to the business and first class check in counters at KLIA. Whilst they are an improvement and certainly add an air of exclusivity to the experience, they are hardly ground breaking. And the attitude of some of the staff manning these counters is often indifferent at best.
But I digress. About 18 months ago, MAS announced that it was doubling its marketing budget. The marketing budget is reported to be as much as 2% of revenue which means that in 2012, MAS spent more than RM550 million or US$190 million to focus on the premium sector and the Asian market in an attempt to rebuild it’s battered brand. That’s a tidy sum. Did it work? Based on the latest figures, no.
In 2012, the company announced it will provide a ‘better and more branded customer experience and embark on a major advertising and promotions campaign′.
I don’t know exactly what is ‘a more branded customer experience’ but as a frequent flyer of the airline I haven’t witnessed a change in or better customer experience although the terrifying vibrations at 38,000 feet on a 737 flight from Kuching to KL in January 2014 were new but I don’t think that’s what they meant.
In 2012 talking about the appointment of Ogilvy and Mather as the airline’s agency, Al Ishal Ishak the senior vice president for marketing and promotions stated, “2012 will be a breakthrough year for Malaysia Airlines on our path to recovery. We recognised, however, that we could not achieve financial success without clearly defining our brand positioning.”
He went on to say, “Ogilvy understood this and throughout the pitch process were best able to translate our message into a powerful campaign idea. An idea that is big enough to help us transform our business and truly engage our customers like never before.”
Judging by the advertising campaign that soon followed, I can only assume that idea revolved around journeys and suitcases. It was, in my humble opinion one of the worst advertising campaigns I have ever seen. I wrote about it here and you can see the TVC below.
What is really depressing about this whole depressingly familiar scenario is that the O&M advertising campaign aims in part to create awareness and drive visitors to the MAS website. And if improvements were to be made to the experience, one would expect logically that the website experience would be the first experiential improvement.
Sadly no, despite a RM550 million marketing budget which I hope wasn’t spent just on the O&M advertising campaign, the first page of the MAS website has a bug in it that frustrates visitors every time and the bug hasn’t been fixed for at least a year!
Another area that one would expect to be addressed during the improvements to the customer experience would be interactions with the customer service department but again, judging by this negative blog posting, the airline has not managed to deliver on its promises.
So now that MAS has posted another net loss, despite doubling it’s marketing budget to clearly define it’s brand positioning and despite not improving the customer experience, what can the airline do now to salvage its reputation and rebuild its brand?
Here are 20 things MAS needs to do now to improve its brand
1) You and the unions need to wake up to reality and appreciate that market conditions are such that unless you get rid of a large number of staff, the airline will be on my list of brands that won’t make it past 2016.
2) The organization is the brand. Many MAS staff are trying really hard but they are let down by those that don’t care. Current middle management systems don’t seem to be working. Fix them.
3) The six principles to turning around an airline and used successfully by Air Canada, ANA and Aeroflot and probably being used by MAS (a logical assumption bearing in mind the influx of management from Air Canada) include a zero compromise on quality of customer service, investments in staff training and better internal and external communications. The company is failing miserably in all these activities and needs to carry out a comprehensive review and overhaul of current practices and service providers in these critical areas.
4) Forget about the big idea. In the social economy, when consumers not companies define brands and those consumers are spoilt for choice and rarely believe what advertisers tell them, the one size fits all ‘clearly defined’ brand positioning campaign is a futile exercise that does nothing more than waste valuable funds. In this case, RM550 million of valuable funds.
5) Focus instead on consistent, ongoing, personalised engagement with each of your very diverse audiences. And start with your Enrich database! Segment that database in a way that allows you to deliver value to relevant segments today and not segments that belong to the 1980s. Travellers are segmenting into smaller niche, groups and individual travellers and they are willing/able to manage the whole process themselves. Talking to them requires more than an advertising campaign. See point 5.
6) FIX THE BLOODY BUG IN YOUR BOOKING ENGINE! It doesn’t matter what it costs just fix it! If your global advertising campaign did make a prospect visit your site and she then had to go through the ridiculous moves required to enter a destination or departure city, they’d soon leave thinking, ‘if they can’t make a simple fix like that, what are they not fixing on their aircraft or elsewhere?’
7) Because it’s so important, your database gets a double mention. A chunk of your brand’s profitability will come from your existing customers. Instead of spending RM550 million on an outdated advertising campaign that seems to want to acquire and retain customers, start to use what is probably one of the most comprehensive databases in South East Asia, properly.
8) Focus. These ‘one-size-fits-all’ advertising campaigns are an expensive exercise in naïve futility. Put an end to them now. If I’m repeating myself its because the marketing budget is being wasted on outdated mass market models.
9) Don’t do social, be social. Pushing one size fits all advertising campaigns out across social media is pointless. It’s not a television or a radio so don’t use it like one. Social is dynamic and you need to be dynamic to get the most out of it. Stop using your Facebook as another broadcast platform. And stop ignoring negative comments and blog posts and instead, engage with the authors.
10) Integrate all your solutions to make it easier for consumers to use them. 40% of business travellers and 25% of leisure travellers in Asia now use mobile or tablets for travel but as far as I can work out, the MAS app (when I can get it to work) isn’t integrated with my online profile. Why not?
11) Stop spending, no wasting huge amounts of money on forgettable mass market advertising campaigns and start building a brand.
12) Train your staff, and start with your customer relationship staff. Whoever is doing it now isn’t doing a good job. Find someone who really wants it and make your staff the best in the world.
13) You have a legion of brand angels out there who are desperate for you to succeed. Do you know who they are? If not, you need to identify influencers and quickly leverage on their passion for your brand.
14) Seek new revenue streams. Of course you are already doing this but there are a couple of opportunities that you are not exploiting and you should be.
15) You are not a low cost carrier so stop trying to be one.
16) Get those new aircraft, now.
17) Stop focussing on costs and start focussing on delivering value.
18) Don’t compromise on anything related to customer touch points, whatever the cost.
19) Image is everything. The change in the look of some aircraft was a great development but what about the rest of the fleet? There seem to be three different liveries for the MAS fleet. And what about the uniforms? A partial change was made to some male uniforms but what happened to the rest of them? Is this a strategic project or an ad hoc one? Whatever it is, consistency in a brand image is a must.
20) One last comment on segmentation. Each segment within each country has completely different requirements for value. In Indonesia small businesses employ 80% of employees. In Malaysia, SMEs account for as much as 99% of businesses. In Japan, 20% of leisure travel is by the over 65s. What do you know about these segments and do you have a brand strategy to communicate with them?
Not many legacy carriers have remained profitable following the intense competition in the airline industry. Even without the massive interference of the governments of the past, MAS has found it tough to adapt to increased customer expectations, LCC competition, fluctuating fuel prices and rising costs.
The days of using cost cutting and outdated mass marketing communications campaigns to drive restructuring plans are over. The future will require an even more nimble approach and a focus on delivering value to diverse segments on their terms.
Only then can MAS out maneuver budget airlines and other new entrants into the market and become profitable once again.