How Malaysia Airlines can rebuild its troubled Brand


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 logo

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.

Premium passenger numbers appear flat
Premium passenger numbers appear flat

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.

And judging by the negativity across the Internet it would appear few others have experienced an improvement in customer experience.

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?’

Why is it so hard to fill in the 'to' and 'from' fields?
Why is it so hard to fill in the ‘to’ and ‘from’ fields?

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.

Virgin America safety video raises the bar for airline Brand content


In my previous post I gave 10 reasons why you should use video to build your brand. You can read that post here

But there needs to be a creative element to those videos. Looking at the airline business, far too many carriers believe the bulk of their marketing dollars should be spent on well produced but hugely irritating glossy videos featuring pretty stewardesses, cute kids and seats that look further apart than they are on any plane I’ve ever flown.

A case in point is Thai Airways. In 2010, to celebrate its 50th anniversary, the carrier released a well produced video that gnaws at the heartstrings but does little new to differentiate it from competitors.

The video has generated a respectable 150,000 views since its launch in 2010 but only 400 likes which would suggest it has made very little impact.

There are some though that are doing their best to move away from this predictable and instantly forgetable approach. Most recently, Virgin America and Air New Zealand have approached the safety video from a new direction.

Instead of the oft ignored stewardess standing self consciously in the aisle and demonstrating how to use a seat belt, where are the exits, how to put on a life jacket and what to do when the oxygen mask drops, these airlines have gone to great expense with a refreshing approach to the tried and tested.

Earlier this week, on the 29th October 2013, Virgin America launched an airline safety video that it claims is the first safety video set entirely to music. They are probably right and the result is impressive.

Obviously I’m not the only one to think so as the video has already been viewed by more than 700,000 people in just two days. What I like about the Virgin video is that they are keeping the story live by inviting dancers to audition for future versions.

Potential participants must send an Instagram video to a specially set up safety dance battle website. Some of those Instagram videos, that can only be up to 15 seconds long will then no doubt take on a life of their own, thereby continuing the Virgin America narrative. So far, the video has over 13,500 Likes on YouTube.

Earlier this year Air New Zealand teamed up with Eton educated ex SAS officer Bear Grylls to create a unique and captivating safety video. The pretty stewardess and cute kids are still there but I’m sure you’ll agree the rest of the cast is unusual!

To date, the Air New Zealand video has garnered more than 277,000 views on Youtube. Not bad for an inflight safety video!

I did a quick search of Youtube to see what Asian airlines are doing on Youtube. Cathay Pacific has created a lot of content some of which has generated a lot of views. Last year they did a ‘Day in the Life’ feature with flight attendants, pilots and ground crew.

This video of a day in the life of Grace, a flight attendant has a respectable 200,000 views but not too many likes.

Malaysia Airlines YouTube page suggests the carrier is creating a lot of video content but judging by the numbers of views it isn’t compelling enough for consumers to engage with, Like and share. However, when they do get creative, or rather innovative interest in the brand goes through the roof, as shown by this flashmob video that has generated over 1,100,000 views in just under 2 years.

Unfortunately this project appears to be tactical rather than part of a strategic initiative because it doesn’t seem to go anywhere or be integrated with any other activities.

According to Cisco, 90% of all Internet traffic will be video by 2017. These Asian carriers need to start producing content that is interesting and relevant. And that content needs to be part of a planned, strategic story that resonates with target markets in order for those markets to engage with and share across the ecosystem. Otherwise it becomes just another piece of expensive content that is out there, rarely viewed and therefore ineffective.

Malaysia Airlines needs to up its digital branding game


In 2012, online advertising spend breached the US$100 billion level for the first time. And forecasters are predicting double digit increases for the next couple of years.

But the types of ads are extensive, from pop-ups to banner ads, to text ads to display ads and so on. There is no consensus on what works the best and what doesn’t but studies suggest that interstitial ads (those that appear when you move from one page to another) animated ads and pop-up ads have the highest visibility, but have low click-through rates.

Whereas banner ads suffer from what the industry calls “banner blindness.” Which basically means that users have stopped seeing them.

According to one company in Australia, for every 1,000 people who see an online ad, only 1 will click on it and the average conversion rate for most sites is 2% which means that you require 50,000 people to see your online ad before you are likely to make a sale.

Another company, Digiday states that only 8% of Internet users account for 85% of clicks on banner ads and that 50% of clicks on mobile banner ads are a mistake.

But digital advertising will continue to grow especially as advertisers online can target their messages at the right segments, thanks to increasingly sophisticated technology. But with such low penetration, you need to get the content right so that when the 1 in 50,000 comes along, there is a good chance they will buy whatever it is you are selling.

I’ve had a go at Malaysia Airlines a few times and I’m probably not very popular with them which is a shame because I’m a big fan of the brand and in some areas, they are trying very hard to build a global brand. But I don’t believe the airline is demonstrating high levels of branding professionalism. Most recently I had a go at their latest advertising campaign. You can read that story here.

I’m sorry to say that I’m going to have another go at them. Earlier today I clicked on a link at the Malaysian Insider website and was interrupted by an interstitial ad for Malaysia Airlines. The ad (see below) featured an underwater image and an image of Penang. Obviously I was interested to see what they were doing so I clicked on the ad.

mas1

I was directed to the Malaysia Airlines site and was told it is under going system maintenance. Now I understand that sites need to be up dated all the time but not in the middle of a digital advertising campaign.

System update in the middle of a communications campaign? Not good for branding.

This type of schoolboy error can be fixed with a brand blueprint that is shared throughout the organisation and ensures the organisation works collaboratively, not in silos. Until they make such organisational improvements, Malaysia Airlines will continue to struggle. It really needs to up its branding game if it is serious about becoming profitable.

Top 10 airline brands for 2012


Skytrax, the UK based research company that specialises in research for commercial airlines, has just announced the winners of the world airline award for 2012.

Skytrax parent company, Inflight Research Services work has been used by the UK government to determine the UK government policies on air transport.

The Skytrax Awards are one of the benchmarking tools for the air industry. They measure passengers’ satisfaction levels by surveying passengers in all cabin classes.

The award is announced after a 10 month telephone survey with 18 million airline customers from 100 countries. That’s right, 18 million airline customers from 100 countries. This must be one of the largest surveys ever attempted.

That’s 1.8 million participants a month or based on a 20 day working month, its 90,000 calls per day which equates to, assuming an 8 hour day, 11,250 calls an hour! Many of which are international, in different languages and probably, if they use my carrier, many of the calls cut off half way through the conversation.

I’ve managed some large brand audits that required a lot of calls but not 18 million in 10 months! So Skytrax should be commended for managing such a logistical nightmare. But I digress.

As I mentioned, the survey takes 10 months and covers 200 airlines, both domestic and large international airlines. The survey measures standards across 38 key performance indicators of airline front line product and services.

The study focuses on customer satisfaction related to experiences right across all touch points including check-in, boarding, onboard seat comfort, cabin cleanliness, food, beverages, in-flight entertainment and staff service.

According to the World Airline Awards website, product and Service factors ranked by customers
in the survey included the following elements:

GROUND/AIRPORT
Standard of Airline web site
Online Booking service
Online check-in services
Airport Ticket Counters
Waiting times at Check-in
Quality of Check-in service
Self Check-in options
Boarding Procedures
Pre-boarding for families
Friendliness of Ground staff
Efficiency of Ground Staff
Transfer services
Arrival services
Baggage Delivery
Handling Delays

ONBOARD: PRODUCT
Cabin Seat comfort
Cabin Cleanliness
Toilet Cleanliness
Cabin Lighting / Ambience
Cabin Temperatures
Cabin Comfort amenities
Reading Materials
Airline magazine
Inflight Entertainment standards
Audio/Movie programming
Audio Video on demand (AVOD) options
Quality of Meals
Quantity of Food served
Meal Choices
Selection of Drinks/Pay bar formats

ONBOARD: STAFF SERVICE
Assistance during Boarding
Friendliness of Staff
Service Attentiveness/Efficiency
Consistency of Service across different flights
Staff Language skills
Meal service efficiency
Availability thru Flight/Cabin presence
PA announcements
Assisting families with children
Problem solving Skills
General Staff Attitudes
Staff Grooming

This is an enourmously complex project and it doesn’t end there. Follow up research includes back up interviews and the data is weighted to ‘provide nomination equity when evaluating airlines of different size.’

Anyway after all that, here is the list of the top 10 airlines for 2012

The World’s Best Airlines 2012

1. Qatar Airways
2. Asiana Airlines
3. Singapore Airlines
4. Cathay Pacific Airways
5. ANA All Nippon Airways
6. Etihad Airways
7. Turkish Airlines
8. Emirates
9. Thai Airways
10. Malaysia Airlines

It is interesting to note that 6 of the top ten are Asian brands and the other 4 are Middle Eastern Brands.

Looking back over the last 10 years, the list has always been dominated by Asian and Middle Eastern brands. With the exception of 2006 When British Airways came first, no European Airline has ever appeared in the top 3.