Michael O’Leary, CEO of Ryanair famously said, “What’s brand? Brand is nothing. Price is the product.” Whether you agree with O’Leary or not, there is slight confusion and debate about what a brand even is. We would categorise a brand as your company’s personality, and that covers everything from how you look, how you communicate, what your core values are and what you stand for. All these features will distinguish your brand from rival brands and affect everything from how you market yourselves to the types of people you employ. Take a look at Ryanair and Emirates – at a snapshot glance, they both fly planes and transport passengers from A to B, but their brand identities tell very different stories – and that is what makes them instantly recognisable in the eyes of their customers.
Does an airline with a strong brand make it more profitable?
In 2016, Shashank Nigam released his latest title, ‘Soar: How the world’s best airline brands delight customers and inspire employees.’ Nigam muses in his author’s note that the original intention for the book was to explore how different airlines, from low-cost airlines to legacy carriers, have built a long-lasting brand. That was until Dr. James Pearson, Senior Lecturer and Course Director of Aviation Management at Coventry University posted on LinkedIn “I’m always wary of such books as I like numbers. Who cares if an airline has a brilliant brand with exceptional buy-in if it makes a loss or underperforms financially?” A question which piqued Nigam & Pearson’s curiosity, so they set about finding out if a strong brand really does make a brand more profitable by analysing the financial figures of the 8 airlines listed in the book. They found that between 2006 and 2015, the average operating margin was 5.9%, compared to the global average of 3.4% in this time period. That was a collective margin of 73.5% higher, and this was also in a time of record fuel prices and global financial crisis. The figures spoke for themselves and only reinforced the notion that having a strong brand matters in business.
Building your brand
Building a brand isn’t easy and it takes years to cement a companies reputation in the eyes of its customers. When building your brand, you need to establish your target audience, define what your mission statement is, outline what your brand offers which is unique, form your tone of voice and what your brand looks like aesthetically. Once you’ve done that, it takes a long time and consistent reinforcement of everything that the brand stands for. The CMO at creative consultancy Lippincott, Heather Stern suggests that the age of cold, faceless institutions is rapidly fading and claimed “Companies need to communicate like humans” and that “being human means not only allowing people to see and hear the brand, but also to feel the brand.” Creating a brand isn’t just a case of posting a mission statement on your website and then not reinforcing those beliefs. According to a Marketing Week report, 58% of adults don’t even trust a brand until they’ve seen real world proof that it has kept its promises. Consumers now place higher value on recommendations from family, friends and online reviews, more than the companies advertising. You only have to look at the rise in popularity in sites such as TripAdvisor and Trustpilot to see that shift in mindset.
Attracting the best talent
A brand that is recognised as a great place to work will always attract the best talent. Southwest (formerly known as Southwest Airlines) has become famous for being a great place to work as they believe that employees embody the brand. The airline’s ethos is ‘everyone cares, everyone is cared for,’ a motto which has helped Southwest to consistently win awards for being a great company to work for. A positive work culture starts from the top and you would often hear the former CEO Herb Kelleher making statements such as “Our people make us who we are, and our people can deliver what our customers want and need.” Southwest claim that their staff encapsulate ‘warrior spirits, servant’s hearts and fun loving attitudes,’ and that they would be unlikely to employ anyone who didn’t fit that mould. As a result of becoming known for looking after their staff, Southwest now have the the ‘pick of the crop’ as they are inundated with applications for their vacancies. In fact, in 2015, Southwest reviewed over 351,000 CV’s and interviewed over 130,000 candidates. From those 130,000, they hired 6,300 new employees. A fact, that is often repeated with pride is that statistically it’s harder to get into Southwest, than it is at Harvard University. While the aviation industry in itself is fairly volatile, working for an airline with a strong brand can offer you more job security. Kelleher said in 2017, “We’ve had years when earnings were down, but we’ve never had a loss for a full year since 1972, and we’ve never furloughed an employee at Southwest Airlines.”
Happy employees equals happy customer experience
Virgin Atlantic founder, Richard Branson, has built his brand into a global powerhouse by focusing entirely on customer service, and by putting his employees before his customers. While you might think that Virgin should focus on putting their customers first for better a customer service experience, Branson believes the opposite to be true. He said, “”It should go without saying, if the person who works at your company is 100 percent proud of the brand and you give them the tools to do a good job and they are treated well, they’re going to be happy.” Branson maintains the brand ethos by walking around the cabins and speaking directly to his staff to collect feedback to ensure that they are happy. Branson continues, “If the person who works at your company is not appreciated, they are not going to do things with a smile. By not treating employees well, companies risk losing customers over bad service.” Furthermore reaffirming his gratitude to his staff,after winning $945,000 in damages from a lawsuit in 1993, Branson distributed it between all of his employees. Because the bonus was at christmas time, the employees fondly remember the money as a ‘BA christmas bonus.’ Branson famously cited that employees come first, customers second and shareholders third. Why? If happy employees make a great brand experience for customers, shareholders will ultimately do well out of this equation.
An epic mistake
The world is connected more than ever before and every customer has a voice and a platform (via social media & review sites) on which to air their thoughts and opinions. Companies, now more than ever before have to ensure their brand is protected by pleasing customers as there are plenty of people who are more than willing to call out a company who fall short of expectation. Since April 2017, United Airlines name and brand reputation has been tarnished by an unfortunate incident that took place aboard flight UA 3411. When a 69 year old Vietnamese-American doctor, David Dao refused to leave the flight (after more tickets than seats were sold,) United’s employees proceeded to drag him off the plane. Mobile phone videos taken by other passengers soon began to circulate the internet and instantly damaged the airlines brand reputation. There were calls for the airline to be boycotted and social media channels were filled with damaging comments such as, ‘not enough seating, prepare for a beating.’ The PR disaster escalated further when CEO, Oscar Munoz congratulated the crews behaviour for removing a passenger who they claimed was ‘disruptive and belligerent.’ A few weeks after the incident, Munoz made a dramatic u-turn after he was hauled before Congress to explain himself. He went on to accept responsibility for what he called ‘an epic mistake.’ However, the damage was already done. Following the incident, United’s shares dropped by 4.3% and they subsequently lost more than $950 million in market cap, along with leaving their brand in tatters. The incident left a lot of unanswered questions into why the employees acted in such a brute way, and why the CEO publicly praised their actions. According to Fred Kofman, author or ‘Leading with the power of purpose,’ he claims that the events unfolded due a ‘dysfunctional culture’ whereby ‘sound decision making, autonomy and responsibility were not a priority.’ He furthermore suggests that United have indoctrinated their employees to ‘blindly follow the rules and procedures rather than training them to think on their feet and deal with situations on their merits.’
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