When price wars flare up, staying competitive means cutting costs sometimes. In these circumstances, savvy brands shall maintain quality and reduce the quantity, once we see in this example from the meals industry when Breyers Ice Cream reduced their carton size to compete without sacrificing ingredient quality.
On the other hand, some brands take the wrong route of reducing their quality, which becomes dangerous for an ongoing company like Alaska Airlines with a long-established reputation for customer support. 2017 wasn’t an excellent year for the airline industry with regards to customer support performance, and Alaska Airlines was no exception. Moreover, a decline in customer support, their challenging merger with Virgin America, and operational difficulties at subsidiary Horizon Air left many employees dissatisfied.
A Closer Look At A brand Cutting Down Too Deep
A recently available Seattle Times article sheds some light on what’s been happening that puts the brand at an increased risk. Disgruntled pilots unhappy with management’s handling of contract negotiations last Fall are purposefully slowing Alaska’s traffic in minor but perceptible ways. This article continues, “in December, flight attendants rose up against the latest small cost-shaving measure that had been planned for January – taking away the free Biscoff cookies on flights leaving after 10 a.m., a move that would supposedly save $3 million per year.”
Apparently, employees dubbed this Cookiegate, and even though the airline rescinded the measure after flight attendants complained it could upset passengers, this article shares that management insisted the cabin crew still make an effort to spend less by handing them out only when requested. As a flight attendant said, “Man, it is a race to the bottom. I feel that we are devaluing our product.”
Price Wars Are not Won By Weakening Your Strengths
When competition is increasing, and price wars are setting in, there’s a real danger in gambling with brand value. Alaska’s merger with Virgin America allowed it to expand and link, learning to be a dominant west coast network, preventing rival Jet Blue from doing the same. However, Delta, also, has established a significant presence in Alaska’s hometown of Seattle offering 53 routes out of Seattle that overlaps with Alaska. Also, because they are a significant carrier, they can do things such as introduce their premium transcontinental product, Delta One, on the Seattle-New York route along with offer service on major international routes.
Mark Di Somma outlines 38 ways brands generate “bad will”, and it’s sad to see a lot of what Mark cites happening at Alaska. However, there’s hope. Regardless of the difficulties, CEO Brad Tilden says, “I have been with Alaska for nearly 27 years, and in virtually all of those years, we have been fighting for our future. The next few quarters might be tough, but I do not doubt that we will come out on top.” He also acknowledges the issues happening internally and writes, “It never feels right when the People part of our business is not running smoothly.”
brands ARE DESIGNED From The Inside-Out
Alaska offers a real-time research study of brand expansion intersecting with market volatility and mounting competition. Without every brand is expanding, almost all brands need to deal with market volatility and competitive threats while providing shareholders with the very best returns. Here’s what we can study from this:
Whenever your internal team is not happy, they can air their grievances with all of those other worlds easily. You can find no secrets anymore, but that is not just a negative. Being transparent with an idea of action and results regularly shared can help empower teams to go forward with the brand rather than against it.
Sometimes a robust differentiator could be small. Alaska’s customers are not searching for the brand to become a major airline necessarily or contend with lie-flat high-grade pods. They appreciate small, unique elements that distinguish Alaska from both majors and the low-fare brands. Even junk food chain Chick-fil-A is differentiating by training workers to say “please” and “thank you”.
Ensure that your leadership team is hanging out “on the ground” with individuals who constitute your brand and customers. IT show Undercover Boss showed us how executives who are distant from their brands could learn a good deal by getting at their employees’ or customer’s level.
To prove this ongoing works, look at Amazon. Every year within an exercise session, Jeff Bezos asks a large number of Amazon managers, including himself, to wait two days of call-center training. The thinking is that simpler to understand customers once you pay attention to them.
In general, way too many brands delegate this sort of work to internet surveys that pester website visitors and app users with incessant requests for feedback that’s never properly analyzed for insight.