Does Face-Time Mean Revenue Time?

I’m always intrigued by companies that are able to promote and market without direct price cuts, especially during a time of declining demand.

The recession has wiped out a large amount of business travel, particularly international travel, and those who are still allowed to get their passports stamped find themselves traveling coach, even on long overseas flights.  This poses a significant problem for airlines who make excellent margins on high-paying business travelers, especially those in business and even first class.  And online meeting tools such as WebEx and GoToMeeting are making it easier for remote productivity.  What to do?

One simple answer is to cut the price, but that doesn’t address the root cause of why cash-strapped companies have eliminated or curtailed business travel in the first place.  A more sophisticated approach is to figure out a way to use this challenging economic climate for trial generation and customer retention so that the airline is better positioned when the economy rebounds.  British Airways has come up with something clever, taking the idea of government stimulus and bailout spending and applying the concept for its own purposes with a new marketing program.

The airline commissioned research by the Harvard Business Review (2,200 business people) and found that 95 percent  believe that face-to-face meetings are key to success in building long-term relationships, and 87 percent agree face-to-face meetings are essential for “sealing the deal.”  More than half of those surveyed said recent restrictions on business travel have hurt their business.

In an effort to encourage more business travel, BA has developed “Face-to-Face,” a contest promotion targeting small to medium sized businesses (500 employees or less).  The cornerstone of the program is the “Business Opportunity Grant,” with 100 winners receiving the following suite of business services:

  • British Airways airfare for 10 round-trip Club World business class flights.
  • 5 free British Airways World Cargo freight shipments of up to 500 kilos to worldwide destinations
  • $1000 toward accommodation at Courtyard by Marriott
  • 5 Regus Businessworld Gold Cards providing access to business lounges worldwide
  • Canon PIXMA MX860 Wireless Office All-In-One Printer

You have to work for your money, though.  Companies enter online and need to write essays about their objectives for 2010 and how a grant would help grow their business.

British Airways Ad - WSJ 15 September 2009

Advertisement in The Wall Street Journal – September 15, 2009

 

BA is using the new marketing to remind business travelers just how important the up close and personal touch is.  Simon Talling-Smith, Executive Vice President Americas, explained:  “Face-to-face interaction fuels business.  In these challenging times, you can keep relationships alive through faceless conference calls or live video conferences, but chances are they won’t grow much without some quality face time.  These human connections matter, and it is from those connections that business flows.”

Headline

Price is and will always be a critical part of the marketing mix.  Although sometimes necessary, marketers should strive to develop approaches beyond just straight price-cutting.  Try to create a price benefit that can help build your business longer-term instead of just getting a one-time sales spike.  It’s more powerful for building your brand and positioning if you can wrap the pricing mechanism within an activity that actually reinforces the key selling point of the product or service.  In the case of British Airways, they’re reminding a key user segment why personal interaction, and hence business travel, is often a key business criterion for success.  Business travel will return, even if it’s less than before.  The airlines that can do a better job to retain existing users and potentially develop new users will be better positioned to capitalize post-recession.

Harvey Chimoff is a hands-on marketing leader and business-wide collaborator who builds marketing capabilities in B2B/B2C organizations that drive customer success.

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Promote This

Two intriguing marketing promotions were launched last week, one in professional sports and one in the travel industry.

NBA Basketball Entertainment

We begin with the New Jersey Nets.  The Nets have a long history of creative marketing (think fans in inflatable sumo gear colliding on court); and a former president, Jon Spoelstra, even wrote a book titled Marketing Outrageously, which by the way, I recommend.

The Nets are back at it again with a novel ticket offer that puts a new twist on the old high school reversible practice jersey but might give branding purists heartburn.  The Nets have created a dual-player reversible jersey as a ticket plan incentive.  One side will have a Nets player and other side will feature a star from the opposing team. So, two pro jerseys in one.

Fans need to buy two tickets per game for each of the 10 games in the Match-Up plan, which is a minimum investment of $350 per ticket, or $700 total. With that financial commitment, they get five jerseys, which are made by Adidas.

NJ Nets Promotion
The 10 game package includes the Lakers, Cleveland Cavaliers, Miami Heat, Orlando Magic and Boston Celtics.  The jerseys will apparently feature stars from those teams:  Kobe Bryant, LeBron James, Dwyane Wade, Dwight Howard and Kevin Garnett on one side; with the jersey of the Nets’ player who will guard or “match-up” against that visiting star on the other side.

The Nets are a tough sell, especially in a market with so many entertainment options, and then throw in a recession.  They’re struggling both on and off the court and have never established a true identity in the New Jersey/New York market.  Complicating the ability to build/maintain the fan base is their plan to move the team to Brooklyn, if and when a new arena is built there. It’s no wonder they need to be creative.

Here’s how team president Brett Yormark (former NASCAR marketing chief) described the program:

“The NBA is a star-driven league and we want to give basketball fans the chance to see the best Match-Ups under one plan.  In giving out reversible jerseys that include NETS players and stars of opposing teams, we hope to encourage more basketball fans to see the NETS play against the league’s best players.  Part of the excitement of watching the NBA is not only rooting for your favorite team, but also to watch the league’s superstars.  With so many great players in the NBA, we look forward to an exciting atmosphere at our games this season.”

So, how to assess this new promotion? Well, the bottom line is to sell profitable tickets, and get fans into the arena to generate ancillary sales and profits. On this level, the promotion is great.  It reflects a probably accurate understanding of the state of the Nets brand and the interests of the fans in the market.  From a true branding level, it does give one pause (a single Nets jersey would be ideal but then the kids might be embarrassed to actually wear it to school!) – but sometimes pragmatism trumps pure marketing discipline.  Yormark, in a local radio interview, talked about being “open and honest with the fans.”  Maybe they didn’t have a choice, but this new ticket plan reflects reality and gives the Nets a fighting chance to put more fannies in the seats right now.  Getting them back may be another story.  After much thought, I give this promotion a thumbs up.

Airplane Travel

The other promotion that caught my attention is JetBlue Airways’ All-You-Can-Jet Pass.”  Everyone knows airline pricing is super competitive and equally difficult to figure out for consumers.  Instead of the typical price-point competition on a specific destination, the JetBlue team has devised a different approach.  Here’s how they explain it:

“Enjoy unlimited travel with our All-You-Can-Jet Pass!  For just $599* you can take JetBlue anywhere you like, as often as you like, from September 8 to October 8, 2009.  Use your All-You-Can-Jet Pass for business, for pleasure, to visit your favorite cities or to meet with a client.  You might as well just do it all! With more than 50 cities to choose from, and for just $599, it’s a deal you can’t pass up.”

Jet Blue - landing_780_allyoucanjet

Figuring out a new and different way to use pricing as a marketing tool is smart.  “All you can” offers are not new, but I don’t remember this approach used for air travel.  This is a clever idea, especially in a recession, although it may benefit frequent business travelers more than the average consumer.  A quick check shows that a round trip fare from Newark, NJ to Orlando, FL during the promotion period is $239.20 with taxes and fees, so if you can fly more than 2.5 round trips in a month you’re ahead of the game.  Another thumbs up.

Headline

First, don’t let pure marketing discipline get in the way of achieving business results.  Understand your reality and be pragmatic.  Would Nets management like to see everyone in the arena and people in local communities wearing Nets apparel?  Yes, but it’s not going to happen.  They realized that fans are coming to see their team and the opposing stars, and not necessarily in that order.  So they came up with a creative way to make the best of it.  Second, strive to find differentiating ways to market your products and services.  If you can get the end-user excited about your offer and switch his/her focus away from just a direct price comparison with the competition, even better.  With everyone surfing the Internet trying to find the best deal, airlines need to find a way to stand out.  JetBlue took the “all you can” concept and applied it to their business to create a competitive advantage and publicity opportunity.

Harvey Chimoff is a hands-on marketing leader and business-wide collaborator who builds marketing capabilities in B2B/B2C organizations that drive customer success.

 

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