There’s a saying in our company that if a client’s employees are happy then that happiness will show in the way those employees interact with prospects and customers, thereby improving their experiences and the reputation of the brand.
When working on an Internal brand audit we’ll take a long hard look at the hiring and firing process and often make small but effective changes to the process. This is particularly so when looking at how firms fire people because unhappy staff often have a grudge to bear when they are let go and in a social media world this can be damaging.
Malaysia Airlines is already a damaged brand which is why it has embarked on a restructuring exercise that includes more than 6,000 job cuts. A lot of effort is being put into helping those staff reintegrate themselves back into the economy but this is not simply about getting them another job.
Keeping all those ex staff after they have left MAS will require very skillful communications and an integrated effort by all departments concerned. The news that 2 days after 6,000 staff were sent their termination letters, the MAS website is still recruiting cabin crew and suggesting there are other vacancies is a huge mistake on the part of those responsible for the brand.
There is no room for error in the restructuring of Malaysia’s finest, most high profile global brand.
The new Malaysia Airlines CEO Christoph Mueller has begun the process of rebranding MAS by stating Monday that the carrier is ‘technically bankrupt’ and that a brutal restructuring exercise is the only way forward. He went on to say that the rot had set in years before the mystery of flight MH370 and the tragic one-in-a-billion shooting down of MH17.
Of course this is nothing new but by stating what we all know and confidently but empathetically, he has shown us that he is serious and perhaps most important of all, he is prepared to do what no previous CEO has been prepared (or was allowed) to do, namely to do what it takes to rebuild the damaged brand.
He has begun by announcing three high level areas – pillars that will over the next 3 years put Malaysia Airlines back where it belongs, at the top of the Asian aviation business.
Phase one requires massive job cuts to the bloated workforce, new contracts for staff, the renegotiation of supplier contracts (as well as cutting the number of suppliers by 90%), the axing of some international routes and reducing the flight frequency on others, reviewing the 777-200ER fleet and selling off 2 Airbus A380s. MAS thought the A380 could help turn the carrier around and at one stage put in an order for 60 of the mighty jets.
But the huge, fuel guzzling A380 has had mixed reviews from airlines and pilots and rumour has it there has been little interest in the 2 aircraft MAS is looking to sell. I’d be surprised though if they sell off the 777s unless they intend to replace them with more modern, fuel-efficient alternatives.
Phase two will focus on transforming the carrier and apparently more than 40 areas for improvement have already been identified and the third phase will look at sustaining the new position of the airline.
So although the name hasn’t yet changed, the new Malaysia Airlines Brand is up and running.
Before you can go anywhere with a brand, you need three things. The first is a solid product offering. If you don’t have that, it doesn’t matter how much you spend on selling, marketing or advertising, the brand will not grow. We’ve seen that over the last 5 years as MAS spent more than RM1 billion trying to resuscitate the brand with advertising campaign after advertising campaign without addressing the brand’s structural issues.
Instead of trying to WOW customers with their product, former MAS CEOs cut costs, sold assets and ignored the passenger experience. The very heart and soul of what makes Malaysia unique – its people and the way they are – was ignored and instead cosmetic, shallow clichéd taglines were created and tacked together in a series of immediately forgettable tactical campaigns that did little for the brand.
The second thing you need when building a brand is a CEO who is prepared to look where others prefer not to look, who understands what needs to be done and is prepared to do what it takes and make the tough decisions, even if that means taking apart the existing brand and rebuilding it, brick by painful brick.
And the third key component is people who understand that the organization is the brand and that brand is part of a community. And this community, made up of people within and without the organisation will make or break the new brand. The new team will have to embrace and engage the community and understand that it is the community not the staff who make the MAS brand.
This team will need to create an environment where people work toward a common, clearly defined organizational goal and not a personal one. Arrogance, ignorance or the ‘tidak apa’ culture will have no place in the new environment. Instead a humble, collaborative, connected and engaged culture based around delivering value, not on the company terms but on the customer terms will be the order of the day.
You’ll notice that I haven’t mentioned anything about the new livery, logo, brand architecture, uniforms, positioning, celebrities, the brand story and so on. That’s because they are irrelevant if the three points above are not addressed first.
Rebuilding the MAS brand was never going to be easy but the early signs are good, long may it continue.
Today marks the beginning of a new (and possibly the last) chapter in the life of the national airline of Malaysia. A new CEO Christoph Mueller officially starts work today, 1st May 2015. Many in the aviation business revere Mueller, primarily because he is credited with turning around the Irish carrier Aer Lingus in a stagnant, competitive European market.
But his achievements at Aer Lingus will pale into insignificance when he starts peeling back the complicated cultural corporate layers at Malaysia Airlines (MAS).
What was once one of the most respected, envied and profitable carriers in the world has become a mere shadow of its former self. MAS is under fire from domestic and regional LCCs and if it stops flying to Amsterdam, Frankfurt and Paris will only be left with a couple of potentially lucrative long haul destinations servicing the kangaroo route from Heathrow to Australia. And these will come under further pressure with the return of British Airways flights to Kuala Lumpur from Heathrow at the end of May 2015.
MAS is hugely inefficient. It’s annual revenue per employee is down to about RM850 compared with RM1,675 at Cathay Pacific and RM2,250 at Singapore Airlines. MAS has 183 employees per aircraft compared with 138 at Singapore Airlines, 125 at Cathay pacific and 31 at Ryanair. Little wonder then that it has racked up debts in the region of US$2 billion since 2010.
Mr Mueller will no doubt focus on improving that revenue per employee and reducing the number of employees per aircraft. At least 6,000 staff are being offered redundancy and the airline has already announced it is selling all 6 of its Airbus A380s and four Boeing 777-200ER super ranger jets. The good news is that he has the support of the government and fuel prices have plummeted but that’s not enough.
He’ll also need to focus on rescuing the MAS brand and its reputation. And that won’t be easy because despite cutting costs and offering attractive incentives to agents in key markets such as Australia, the carrier is struggling to get bums on seats. And after the tragedies of 2014, years of poor management, low staff morale, and little focus on anything other than advertising, the MAS brand is in free fall.
Which is why the airline issued a rebranding request for proposals (RFP) a couple of weeks ago. Unfortunately the signs aren’t good that the people responsible for the brand understand what constitutes a brand and what is required to rescue the brand and its reputation.
We weren’t invited to submit a bid so I can’t comment on the contents of the RFP but I understand those invited were only given about two weeks to submit a bid as the deadline for submissions is 8th May 2015 with the rebranding supposed to be launched in July 2015.
Those are insane deadlines which is why cynics in the industry are suggesting the advertising agency tasked with carrying out the rebranding has already been chosen but there is no hard data to back up this claim. Rest assured though that the industry is watching developments carefully and if a certain agency gets the bulk of the work, there will be plenty more accusations ‘flying’ around.
Rumours aside, my worry is that those tasked with managing the rebrand will focus on a new name, new livery, new uniforms, new logos, new signboards and mass advertising creative campaigns but place very little attention on the key areas that need to be addressed, such as the ability to deliver economic, experiential and emotional value to all segments, at every touchpoint, at all times and on customer terms.
The first stage in the rebranding of MAS will require a cultural change that may have to come not just from the airline but the country itself. To rescue the brand MAS must move away from a centralized, top heavy organization staffed by employees trained to do as management says and not challenge questionable decisions.
The firm must move away from an ingrained belief that business is a one off transactional, price driven initiative and that every customer is purely a source of money, irrespective of their relationship with the brand, their influence and their loyalty.
In a social media world, where consumers not companies or advertising agencies define brands, changing the name, logo and livery of the airline and announcing the ‘rebrand’ with a global, one size fits all corporate driven communications campaign will actually have a negative impact on the brand and possibly do more damage than the twin tragedies of 2014, the years of mismanagement and the sweetheart supplier deals have done to date.
Instead the first stage of the rebranding must focus on creating a collaborative, personalised, relationship based, retention driven organization that understands customers and their needs.
Failure to focus on the internal branding first and getting it right will make any other investments an expensive exercise in naive futility. Which will see the end, sadly of a once iconic brand.
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.