According to marketing magazine, group CMO of Malaysia Airlines Arved von zur Muehlen lasted 6 months in the role before jumping ‘ship’ and joining a Canadian carrier.
This despite Malaysia Airlines crediting him with being “instrumental in restoring the airline’s position as a leading international carrier and developing its innovative customer-centric services.”
Only yesterday, Group chief executive officer Izham Ismail announced in a bullish interview with Bernama that things were improving at the carrier and the five-year Malaysia Airlines Recovery Plan (MRP) was seeing impressive results across the board.
He said “…customer experience had also improved with market-driven metrics based on the company’s customer survey and net promoter measures showing significant positive gains over the last two financial years.” I don’t quite understand what that means but I do understand that this latest departure and the barrage of abuse the carrier is getting online and on an almost daily basis (See this earlier report with hugely embarrassing videos) suggests things are not so rosy down there in Sepang.
But one thing seems to be for sure. Despite the CEO saying things are really, really good, Malaysia Airlines is a springboard to better positions in more solid Western carriers because Muehlen is about the fourth Western C level executive to bail out in the last couple of years.
In the mid 1980s, I was working in the Middle East and when it came to taking leave, we had 2 travel options. Head West for Europe or East for Asia. Whichever direction, the airline recommendations were always the same – try to fly on Singapore Airlines, Cathay Pacific or Malaysia Airlines.
Why, because those airlines offered top quality service. Something the European carriers, with the exception perhaps of Swissair, were unwilling or unable to do.
Emirates arrived in 1985, Oman and Qatar Air in 1993, Etihad in 2003. Prior to that, the only Gulf carriers were Saudi Airlines and Gulf Air. Thanks to their owner’s deep pockets, Emirates, Etihad and Qatar accelerated the establishment of their brands with massive investments in brand experiences.
Since then, Singapore Airlines and Cathay Pacific have done their best to compete but Malaysia Airlines (MAB) was left far behind and today, is a mere shadow of the great brand it once was.
To many, if it wasn’t for the Business and First class offerings, it’s essentially already a low cost carrier. Nevertheless, in its communications at least, Malaysia Airlines continues to give the outside world the impression it sees itself as a world-class carrier.
In March 2018, Malaysia Airlines launched a campaign titled “Malaysian Hospitality Begins With Us”. The campaign aim was to ‘reinstate and demonstrate MAB as the national icon and represent Malaysian hospitality on behalf of the nation to all its guests and customers.’
MAB’s group CEO Izham Ismail said during the launch “that the airline’s diversity, heritage and culture are the foundation and reference of the brand promise, and that MAB aims to provide a Malaysian experience in travel through Malaysian hospitality.”
These bold and practically impossible to live up to statements were supported by the usual professionally produced advertisements and videos shot in high definition with smiling cabin crew in brand new aircraft telling us about ‘Malaysian Hospitality’ and how it is a culture that ‘runs through the organization’.
The website, the first destination for many potential passengers has a special section for ‘Malaysian Hospitality’ and in this section announces “Welcome’, or as the locals would say, ‘Selamat Datang’. That’s how it begins, the experience that is our hospitality. Warmth and generosity are the hallmarks of how we treat anyone we meet. That’s what we’re known for as Malaysians, and more importantly as an airline.”
It goes on to say, “Our hospitality begins with our experience. As we strive to deliver the best experience possible, everything we do is guided by our principles of hospitality.”
Now in some ways I think this is quite clever. Because if Malaysians are known for their warmth and generosity, then they only need to leverage on the natural capabilities of employees to deliver a potentially world class experience.
But it also means that every crew on every flight, will have to be on top of their game non stop if they are to deliver a high level of service at every touch point, every time. And that delivery must meet the very diverse needs of very diverse passengers.
And of course, the concept of ‘warmth and generosity’ may be difficult to deliver. Warmth yes, but generosity? What does that mean? Do you hug every passenger and give them a US$100 bill? Or do you upgrade everyone who asks?
Don’t forget, the aim is to ‘represent Malaysian hospitality on behalf of the nation to all its guests and customers’. With such a promise, there can be no half measures. And of course you can be sure plenty of people will be waiting for the first fail.
Is Malaysia Airlines delivering on the promises above? Despite the glossy high-end corporate videos, two videos have emerged recently to suggest it isn’t.
On their own, these videos could be dismissed as ‘one off’ rants by disgruntled customers but watched together and added to the explosion of negativity on the MAS Facebook page and a pattern seems to be emerging.
This suggests to me that whatever training cabin crew are receiving is not linked to the big promise and whoever is responsible for measuring the effectiveness of that training, isn’t doing their job properly.
Let’s take a look at the videos. The first one was uploaded to YouTube on November 20th 2018 by travel and aviation vlogger Josh Cahil who is based in Germany and has 23,000 followers on Instagram and close to 10,000 followers on Twitter.
His YouTube video where he claimed he was bullied by “extremely unfriendly” MAS cabin crew on a flight from Kuala Lumpur to London has been viewed more than 280,000 times and generated more than 2,600 comments.
International media in the UK and Australia picked up the story as well and in Malaysia it was covered by Says.com not to mention other news portals.
I have a suspicion this video was created some time ago because it features the Malaysia Airlines A380 and as far as I know, they aren’t using that aircraft on the London sector any more.
But what both these videos do is show how Malaysia Airlines is unable to deliver on the bold promises it makes in its marketing. They also show the futility of spending large sums of money on big ideas and not linking that promise to the departments responsible for delivering on that promise when all it takes is one passenger to have a bad experience and share that experience across social media and the whole expensive, one size fits all campaign is ruined.
This mass economy approach more suited to 1988 than to 2018 is built around the belief that with a large enough investment, an airline can make potential and existing passengers believe each bold statement it makes and that if it doesn’t deliver on that statement during their particular interaction with the brand, the passenger should just be grateful anyway.
Following the Josh Cahil video, Malaysia Airlines initiated an investigation and according to Cahil, the group CEO sent him a template apology and offered him a refund, which he asked them to donate to a charity supported by them.
The problem was that by this stage, the story was dominating social media conversations. Even corporate driven tactics on social media were being ambushed with negative comments.
In fact the majority of MAB’s attempts to use social media in a positive way are being hijacked by negative comments. And when this happens, the firm doesn’t seem to grasp the link between what the commentators are saying online and what is happening offline.
This is the dangerous spiral many brands are finding themselves on today. They don’t invest in the right training to deliver the experiences consumers demand offline.
There are a variety of reasons for this and some of them sinister. Most common is that the scope of work for a campaign is created in isolation and by people who don’t understand the importance of delivering a ‘best in class’ customer experience.
Which means that if the scope of work for the project is wrong, it is doomed to failure before it even starts.
In despair or because they now have a channel in which to express their frustrations, consumers go online where they passionately vent those frustrations. And often they do it in the very space the company thinks it owns such as on a Facebook page, further diluting the ability of the brand to deliver on the brand promises made in the very expensive corporate driven messages it believes are defining its brand in the way it wants to be defined!
And if that wasn’t bad enough, when passengers vent those frustrations online, the people tasked with representing the brand simply don’t have the skills or for that matter the responsibility to respond in a suitable manner.
This exasperates the negativity around the brand, causing brand equity to plummet to such an extent that it can be almost impossible to escape the spiral into brand obscurity.
So what can Malaysia Airlines do? If they are serious about building a national brand that can compete with Asian and Middle Eastern competitors then it needs to understand the following
1) Forget about the big idea
Smart Brands understand the concept of the big idea belongs to the 1970s and much as the world has changed significantly since then, so should the way brands engage. Malaysia Airlines must focus budgets not on telling people they deliver Malaysian Hospitality but on showing people they deliver Malaysian Hospitality.
This requires a comprehensive overhaul of the marketing, advertising, customer relationship and social media strategies. Fusionbrand recommends this be carried out through a brand audit as soon as possible.
2) The right experience training
Judging by these videos and the comments across Social Media, Malaysia Airlines see training as a box to be ticked. A review is required to identify if there is an understanding of what constitutes world class service.
If the training providers have been hired for the wrong reasons and don’t have the skills to deliver the type of training required to compete with sector leaders, how can Malaysia Airlines cabin crew and for that matter ground crew, deliver a world class service?
3) Social Media
There’s no escaping social media but too many brands don’t give it suitable attention. Malaysia Airlines must start investing funds in social media instead of big idea promises it cannot keep.
I don’t know what’s happening at MAB, but too many companies think social media is the perfect place for interns because they are young and have an Instagram account themselves. After all, what could be hard about posting on Facebook and Twitter, right? Wrong.
Social Media is about many things. For brands, it’s about cultural, social and other nuances. Being responsible for a brand online is not something you do, it’s something you are.
Malaysia Airlines needs to link what it says and does offline with what it says and does online. Quickly, before it’s too late.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 August 2014, as part of its ill conceived attempt to move on from the twin tragedies of earlier in the year, Malaysia Airlines launched a contest called “My Ultimate Bucket List” which Time magazine said was not such a good idea because a bucket list is made up of the things one wants to see or accomplish before dying.
Following the wave of criticism, the airline quickly apologized and the campaign was withdrawn but not before social medial let rip, with one Twitter user asking, “This is a sick, sick joke right? Marketing/PR needs to be fired.”
The focus at Malaysia Airlines has been an ambitious restructuring plan led by outgoing CEO Christoph Mueller who has cut unprofitable routes or offloaded them to competitors, slashed thousands of jobs, and brought in new management.
Maybe it’s me but my first thought was that the woman looked like an angel. Doesn’t her hat look like a halo? My next thought was of MH370 and the tagline although totally innocent suggested an announcement was imminent.
And if it isn’t an angel, what is she supposed to be? A butterfly? And what’s the campaign about? Is the world waiting for her? Will she ever arrive?
Whatever it is, I couldn’t help but think this was the beginning of another bucket list fiasco. Or am I over thinking it? Tell me what you think!
Rumour has it that Malaysia Airlines CEO and managing director Christoph Mueller is quitting the airline before the end of 2016.
If this is true it’s a major blow for the carrier that announced its first monthly profit in years in February 2016. Although it won’t come as a surprise to many who spotted tension between Mueller and Khazanah late last year when he announced the new Malaysia Airlines brand would be launched in December 2015.
The CEO was quoted as saying, “The entire brand needs a ‘refresh’ and will be like a start up with a new culture, values and ideas” However, the brand continued in the same livery with little change to the product or values and ideas. Well little positive change anyway.
And then in January 2016, Khazanah Nasional Chairman Tan Sri Azman Mokhtar said “undertaking a rebranding exercise without having a strong foundation would create a vacuum in the carrier.” This comment can’t have gone down well with Mueller.
This worries me because I think you are wrong. Malaysia Airlines desperately needs to rebrand. Secondly, you are contradicting what we’ve been hearing from Christoph Mueller who said, “A brand change is a necessity.” This contradiction is only going to make Mueller’s job more difficult, as well as confuse an already confused global public and weaken trust in the ability of the company, whichever one is trying to restore trust in its ability to run a global airline.
But most worrying of all, is that if you as the respected Managing Director of Malaysia’s flagship sovereign wealth fund are making such statements, I am concerned you have been given the wrong advice about what constitutes a brand and branding. Because the structural changes implemented in a rebrand form the foundations for the business to deliver on the promises it makes at every touch point and in relationships with existing customers.
It may be that you have been told a rebrand is nothing more than a creative driven exercise based around a new identity, tagline and statement. That these are then promoted across traditional channels using traditional media in the hope that the new identity will resonate with prospects, boost sales and retention and make the world forget about the twin tragedies, poor management, questionable practices, gap between promises and reality and shallow offering.
This of course is mutton dressed up as lamb and couldn’t be further from the truth. But sadly it is not uncommon. In the 1960’s, 1970’s and 1980’s, with few conduits to consumers and limited competition, this type of creative driven branding often worked. Companies such as Coke, Malaysia Airlines, Nestle and Unilever spent billions of dollars using this approach and increased sales and made profits.
Mass media, which was so powerful during this mass-market economy, was the logical vehicle to enhance the impact of creative-driven branding with a corporate controlled message and reach and repetition. In this environment, the company defined the brand and the consumer accepted that definition.
But the mass-market economy no longer exists. Today’s customers are increasingly overwhelmed with those creative images, taglines and promotions and the disruptive nature of that messaging and underwhelmed by the gap between promises made and reality. They now block out much of the noise and look instead to other consumers for information.
In this new economy, where consumers not companies define brands, the definition of a brand and how to build one has changed. Creative ideas are great, but consistency, information, knowledge and relationships are better.
Whilst every brand is different, the fundamentals of building a brand can be applied across sectors. Today Tan Sri, if you want to build a brand, as apposed to make sales, you need to develop a long-term profitable bond between you and your customer. This can only be achieved if you understand how to deliver economic, experiential and emotional value to those customers and on their terms. And you must back this up with everyday operational excellence and at every touchpoint every time.
Once respected managers of sovereign wealth funds such as yourself, our CEOs and government servants understand that this is what constitutes a brand and branding, the sooner we will be able to build world-class brands or in this case rebuild a world class brand that can once again compete with the best carriers out there.
This is especially relevant as the TPPA and AEC will see a massive influx of competition. If we don’t have any brands, our companies will struggle to stay relevant in the new economy.
Tan Sri, I do hope you read this and see my comments as feedback not criticism.
MD Fusionbrand Kuala Lumpur
Contributor: Nation Branding: Concepts. Issues. Practice. Routledge. January 2016
Author: Stop Advertising, Start Branding. Published March 2016.
I’ve been looking forward to the new Malaysia Airlines (MAB) brand from both a professional and a personal perspective. Professionally, I’m eager to see what direction a global company with a huge reputation proposes for the carrier. Personally, I’m a big fan of Malaysia Airlines and have been for over 20 years. I also believe a national carrier is a critical component of any nation brand and building a nation brand is harder without a national carrier.
Right now, despite a new CEO and one presumes new management, the brand seems to be directionless. I think 3 launch dates for the new brand have come and gone and each time the date passes, there is a deafening silence from management.
Meanwhile corporate driven messages tell us the new brand focus will be on ‘making the customer experience change.’ In mid 2015 we were told that in December 2015 the airline “will begin installing new cabin seating and improving inflight entertainment, customer service and on time performance. New technology, lounge concepts and catering would be introduced and the uniforms may change.”
But I can’t find anyone who has witnessed the ‘new cabin seating and improved inflight entertainment.’ I hear complaints about the poor state of aircraft and have witnessed it myself. Delays are inevitable when launching a new brand but in a social world, these delays must be explained. There is nothing wrong with being normal.
Poorly thought out announcements are made regarding long haul flights that result in global condemnation and humiliating U turns but management remains silent. Days later, as if nothing happened, a press release is sent out about the new beginning at MAB and how the CEO will ‘boost product offerings and rebuild confidence in the carrier.’
What does ‘boost offerings’ mean? Does it mean make it cheaper? The lines between Low Cost Carrier (LCC) and Legacy Carrier have become blurred. The low cost carrier (LCC) model is familiar to just about everyone who travels. Basically you purchase the use of a seat on a (very cramped) plane and then pay through the nose for anything else such as luggage, food, drinks and even the location of the seat.
The alternative is Legacy carriers but I’m not really sure what they are. The term came out of the USA but today, seems to apply to any national airline not making money. With a legacy carrier or national airline, you pay one fee that covers everything including what should be a postive, even memorable experience.
Nowadays, a lot of so called legacy carriers mimic the low cost carrier model. Many of them do it quite well, others not so well. Malaysia Airlines seems to bounce between the two. It recently offered business class seats to London at the ridiculously low return fare of RM3,400. However, just like LCCs the rate excluded GST (6%), taxes and fees and added a caveat that additional baggage and fees may apply. I didn’t check but I suspect this would have bought the figure to the same level as competitors.
Malaysia Airlines should focus more on improving its product than trying to discount its way through low seasons. Instead of trying to match the LCCs with their basic services and expensive add ons, Malaysia Airlines should seek to improve its relationships with its customers and offer a premium service rather than discounts, especially to its passengers at the front of the aircraft.
And it needs to start communicating with the public. Successful brands today are built on accessibility, transparency, collaboration, retention, personalisation and integrity. And consumers not companies determine the success of brands. Corporate driven press releases are not as effective as positive comments shared across social media. Malaysia Airlines needs to get its head around this.
And it must do it now because Air Asia, once the poster boy of LCCs is struggling to stay relevant and is looking to innovate. If it looks to Europe or Australia for inspiration, it will see the likes of Easy Jet and Virgin Australia morphing into legacy carriers. According to the Economist, this may leave legacy airlines “in a perilous state, regardless of their location and size.”
And before anyone says Malaysia Airlines is a private entity and doesn’t need to explain anything to anyone. Just remember that this is the 21st century not the 20th century. Consumers are smarter and acquire knowledge not from brands but from those who use them. And besides, Malaysians have invested billions in the carrier and they have a right to know what is happening and why deadlines are not being met.
If Malaysia Airlines is serious about its brand, someone needs to take charge of the communications and take charge now because I for one, don’t want to see this once great airline continue to make these elementary mistakes. Otherwise the only thing serious about the rebrand will be its inneffectiveness.
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.
I was shocked to see this ad appear on my Facebook page this morning.
Is anyone in control of marketing at Malaysia Airlines at the moment or has the transition to the new company already started? At the same time as the world’s media is showing terribly sad but dignified video and images of the crew of MH17 returning to Malaysia in flag draped coffins, the airline’s marketing department launches an advertising campaign with a grammatically incorrect tagline telling us flying with Malaysia Airlines is fun.
Are they mad? Does the marketing team really think they can convince us that the experience of flying MAS is going to be fun? Should they be trying to do that? Do they think they can change global perceptions of MAS with a grammatically incorrect tagline? Actually they are not trying to change perceptions, they are trying to change reality, with ads! Not only is it offensive, it is ignorant and they really should know better.
This is the second poorly conceived tactical ad MAS has released online in the last month and it smacks of desperation. There is enormous pressure on the management at MAS but they need to get their act together and start rebuilding the brand and not simply throw out poorly thought out tactical ads or what I can only assume are seen as quick fix solutions. The rebuilding of the brand will start by rebuilding trust and faith in the brand but not with this rubbish.
Last year, when JWT India created an offensive ad featuring Silvio Berlusconi in a Ford Figo with girls bound, gagged and crying in the boot of his car JWT fired the executives responsible and Ford apologized.
MAS doesn’t need to apologise but the management must reevaluate their marketing team and their ad agency needs to fire the clowns who created this nonsense.
Then the managment needs to understand that rebuilding the reputation of the brand is a strategic initiative and not a tacticial one. And the CEO needs to have his finger on the brand pulse otherwise this sort of incompetence will continue and there will be a further erosion in the brand’s reputation.
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.