Flying into Heathrow Airport this week I was struck by the vast array of unique logos on the tails of planes and a variety of airline names, several of which I didn’t recognise. It got me thinking about the choice we have as consumers – Why do we choose to buy one product over another? What price premium are we prepared to pay for our preferred product when we have lots of choice? What level of customer service do we expect if the product or service falls short (as they often do)? What extent will the brand go to restore customer confidence & loyalty? Many of these questions figure in the consumer buying decision – well mine at least! The “price” is often the top factor in the decision-making process but it’s not always the deciding factor in my view, particularly when there is perhaps less than 15% price difference between two competing brands.
Then my thoughts turned to the companies behind the brands trying to retain us as customers. Do they think of their customers as IP assets? What information do they collect about us? Our buying preferences? Our average spend and preferred payment methods (PayPal vs credit card vs apple pay vs debit card)?
How long we typically spend online and what we ultimately buy and at what time of the day or week ? Good quality data like this can influence marketing strategy and a timely “offer” email or pop-up at that time we are typically online can prove to be effective. It can ultimately secure margins for certain products whether they are presented online (usually) and offline (occasionally). Having clear assumptions about customers, churn rates, average spend and then making the critical connection as to how they impact related business cash flows can provide investors and lenders confidence in both the business they are backing and the IP assetswhich are often viewed as “behind the scenes” contributing to these revenues. The risk of course is how well are these assets protected – does the brand record the data and analytics and use it in business decision making.
I recently flew San Diego to Boston with @Alaska Airlines because their flight times East coast to West coast were attractive. It also has an Eskimo in its logo but I’m certain that didn’t influence my decision, although it’s been suggested it is in fact @Jimi Hendrix, @Abraham Lincoln, @Bob Marley or even @Johnny Cash, all of whom I like. Anyway, my first flight with them was a great experience, so much so that I chose to fly with them again in preference to #United or AA with whom I’ve flown many times, despite Alaska Airlines being marginally more expensive for the routes I was flying. I also signed up for the Alaska loyalty programme. You may ask why is my loyalty building already and how do Alaska tap into future profit from me, well it was because the first flight I took with them a few weeks back, during which I explained I was a virgin (never flown Alaskan before) was great and I got the best service ever on an airline that day. Maybe I was lucky, maybe it was because I was an Alaskan virgin or maybe there’s some Eskimo blood in me I didn’t know about, they do say the Scots diaspora goes far and wide, but that’s maybe stretching it!!
So until my next Metis Letter from America I hope you have a great weekend!