Posts Tagged ‘Advertising’
No More Asterisks On Fare Ads
Say what you want about big government consumer watchdogs – increasing information transparency in business transactions makes markets more efficient. Telling someone that they can fly from Albuquerque to Tucson for 59 dollars only to find an 80 dollar fare plus add-ons for everything from baggage, talking to an agent, to requesting a paper boarding pass – this just goes over the top of any ethical disclosure standard.
* additional fees and taxes apply
According to a recent article from the L.A. Times: New rule requires air fare ads to include taxes and fees, starting Jan. 26, no more asterisks. A new U.S. Transportation Department rule requires all advertised air fares to include any compulsory taxes and fees, including fuel charges and the Sept. 11 Security Fee.
At Social Flights, we go a step further – we will tell you the time tax that you pay by not using point-to-point direct private service. For example; if your cheap fare takes two connection flights, with long waits, parking and airport fees plus extra overnights, we will happily tell you that if the value of your time is more than X dollars per hour, then we are cheaper. We can take you there in 3 hours instead of 13…but I digress.
“The price advertising provision was adopted to make sure passengers know the full amount they will have to pay for air transportation when they buy a ticket,” said agency spokesman Bill Mosley.
It’s all about money and time
If anything, quoting a true cost in any form – dollars AND time – provides the traveler with a broader way of thinking about competing options. Many short flights have a true speed of less than 60 miles per hour. The customer needs to be able to compare with the cost of driving. If there are several overnights involved, the traveler needs to be able to measure those costs against taking a train and sleeping car. Of course, private air travel on a shared charter jet holds a distinct segment of the value proposition.
The airlines also described the new rule as “arbitrary and capricious” because the practice of advertising fees and taxes separately has been used for years by “virtually every other industry in the United States.”
Passengers held captive
The airlines may have a good point – although we would prefer that they held themselves to a higher standard than “every other industry”. The fear is that if they quote the true cost, then people would look for alternatives while they still have time … before they are held captive. See, it’s all about money and time.
What’s it worth?
In our business, every day we have to sell the value of what we do.
If you base that value on our rates compared with coach class airline fares, we can’t compete on the seat price alone. In some cases, with four or more travelers going on the aircraft, we can get close; but, most of the time, you can buy a seat on airlines a lot cheaper than you can charter a business class aircraft.
So, when a business person makes the decision to spend more money on a chartered flight than they would on airline seat(s), how do they make the rational decision to do so?
This week, I was talking with a client of ours who runs a successful advertising agency in Nashville. He is a true entrepreneur who built his business from the ground up. When he decides to spend a dollar on something, it is his dollar; so, he thinks in terms of ROI on every decision.
Over the past few months, he has taken six trips in our aircraft, all of them for business and all to places that did not have non-stop airline service. In a few cases, his destinations had no airline service at all. By chartering an aircraft, he was able to take his staff with him to meet the client and he was able to complete the trip in a single day - no wasted time or overnight expenses that would have been required had he traveled any other way.
What’s it worth to him? Here is what he had to say:
“I have spent years working all the hours necessary to build my business. Now it is about relationships. Relationships with my clients all over the country AND relationships with my family at the dinner table and at bedtime. While there is rarely economic justification for the additional expense of skipping security lines, connecting flight issues, and playing hotel roulette… there is certainly reward in the immeasurable joy of lunch with your client in Terre Haute and being home for dinner with your family in Nashville. Both rewards produce profit that propel my business and my life.”
Arnie Malham, President – CEO, Malham Leverage Group
The productivity gains of flying business aircraft buy back the most precious commodity we possess – time! Time with our clients on one end of the day and time with our family on the other end.
It would be great if we could figure out how to place a true monetary value on our time. It would be even better if we could monetize the gains we get in productivity and creativity when we experience a different form of travel that does not add stress to our already busy lives and that gets us home to family more often.
Plane Guilt: The Unfortunate Stigma of Aviation
Recently I was having a conversation with a Charter Operator’s team about possible ways to increase their visibility and market share. I mentioned the use of customer testimonials as part of their advertising. They responded, “But our customers won’t do it. They feel like people will judge them negatively because they used a private charter.”
I haven’t been able to get that thought out of my head.
There is a stigma about general aviation- that somehow these planes are the wasteful toys of the “rich”. To admit to flying one or utilizing one for business seems to be tantamount to admitting you have stock in Exxon, own a Hummer, or that you were involved in clear cutting a rainforest. There’s a stigma. And ironically it doesn’t matter if you’re flying a Cessna 172, a Cirrus, Baron, or a Phenom. People will look sort of sideways at you and wonder if somehow you’re the clandestine “millionaire next door”
There are several things that we need to understand about “Plane Guilt” if we hope to overcome it:
The relative nature of the argument. When someone uses what is perceived as “rich toys” either for pleasure or as a part of their business, there is a judgment that happens in many people’s mind. “Mr. Jones is so extravagant and wasteful to be using that business plane. ” And many clients/owners/operators are very aware of this stigma. The argument that aviation is simply an extravagant and wasteful tool for the wealthy is completely relative. It’s relative based on one’s perception of affluence and wealth. What is extravagant to one may not be to another. In many ways Americans have blinders on and miss the fact we are, in general, an affluent people. Consider the fact that Americans and Europeans spend enough on ice cream and pet foods to provide water, health, nutrition, and education for the entire planet. Also, consider that 80% of the people on the planet live on less than $10 a day.1 Of course Americans are a generous people too. Even in the economic hard times we are facing at home, over $200 million was raised in short order for the victims of the recent earthquake in Haiti. 2 But realize that this relief was only possible because we, as a people, are successful. And never mind the crucial role, dare we mention it, that private aviation continues to play in that recovery effort. Nonetheless, we need to understand the argument that somehow Aviation is more wasteful than something else is really to give in to a selective form of logic that ignores the larger picture.
In fact, most of the pilots I know are far from wealthy (including yours truly). Most would fall into the middle-class. They work hard, have families, and developed their flying hobby. Even professional pilots aren’t soaking up the dollars. The average salary for a new corporate pilot is $32,500. Flight Instructors average about $25 per hour before taxes (at 30%).3 Of course these can increase with seniority, but very few are making anywhere near the six-figure income many people wrongly assume. Somehow people have gotten it into their heads that pilots and those involved in GA are wealthy (which equals ‘suspect’). Those who work in the industry know better. Flying has a wonderful cross-section of people. Yes, there are celebrities and wealthy people, but by far most GA patrons and operators are not.
There are plenty of other expensive hobbies that consume thousands of dollars in discretionary income each year. Is golf looked on with equal disdain? What about bass-boat owners? Or Harley-Davidson riders? There was a time when it was a bit pretentious to have a cell phone (remember when they came in those gigantic brief-case-sized bags?) Not that long ago to have more than one car or a flat-screen television was a sign of excess. But times, and stigmas can change.
The Expense of Charter? Charter flying can be expensive. But it can also be surprisingly affordable. As I was working on this article I looked at what the cost difference was between airline and charter flights for a trip from Evansville, Indiana to Atlanta. The average price for the airline ticket was $800. The charter price was around $780 in a modest Cessna 310. For a bit more speed, a King Air was $944. Jet service in a BeechJet was $1300. This illustrates the idea that charter can be had for less than most people realize. Perhaps that would be worth the cost to avoid the hassle and extra fees of today’s airline travel.
But it’s the perception, right?
Overcoming the Stigma by Stories How can we overcome the stigma of Charter/Corporate flying? We tend to argue from the statistical side, particularly the cost and relative affordability of flying. But there’s one critical feature missing: emotion. People often pay for a good or service because of emotion and perceived value. One of the most effective means of doing this is through the use of stories.
Aviation needs a Jared.
When Jared Fogle was a junior in college he weighed a whopping 425 pounds. His father, a doctor, warned him of his weight and the dangers it posed to his health. After his roommate noticed signs of edema (fluid retention that can lead to diabetes) Jared decided to get serious about losing weight. He discovered Subway’s new line of low-fat sandwiches and developed his own diet based on eating one veggie sub for lunch and a turkey sub for dinner. The rest is history and marketing genius by storytelling. Most of us have seen Jared’s commercials and know that dropped to 180lbs. The story caught on, despite the initial resistance of Subway’s marketing firm.
In their book Made to Stick, Chip and Dan Heath make the point that this serendipitous campaign contains all the things necessary to be successful and “sticky”. It is simple, unexpected, concrete, credible, emotional and given by a story. They note, “Inspiration drives action, as does stimulation.” Later they note the surprise in the story, “[Jared's story] violates our schema of fast food…the guy who wore 60-inch pants is giving us diet advice!” (Heath and Heath, p222)
Can we find a story like Jared’s? We need a story that violates the schema, the stigma, currently popular about flying. Aviation has tended to depend on celebrities to make its case. That has its advantages. But perhaps a far more effective and change-inducing idea is to find the “ordinary person” who is utilizing and benefiting from charter aviation and has the courage to tell their story.
Because, we have a story worth telling. Can we find our Jared?
What The Heck Is An Asset?
When you go into a store to buy anything, the rational person will always compare the quality of the object against the price of the object versus any alternative products or markets.
When you buy a home, the property is characterized by descriptions for “quality” (construction, neighborhood, schools) and a series of ”quantities” (number of bedrooms, square footage, price)
When you cross the road, you look both directions in order to assess the quantity and the quality of the traffic that may or may not kill you. Are the traffic slow moving pedestrians or are they fast moving trucks?
When a bank makes a loan, they “quantify” all of your valuable things like your home, cars, 401K, and personal income and they use the credit score to measure the quality of your finances (debts, credit pulls, past history, bankruptcies, etc).
Supply and demand cannot, absolutely cannot, be determined by any other means other than by measurements of quantity and quality.
In fact, economics is the science of incentives where the fundamental graph is the supply and demand curve. Both supply and demand behave according to inputs of quality and quantity, specifically price and availability. Supply and demand for anything absolutely cannot be determined by any other means than by coordinates of quantity and quality.
Investors manage risk.
Risk is an asset, if it weren’t, insurance companies would not exist. There are three things that an investor must know in order to manage risk. 1. They MUST be able to identify their exposure to peril. 2. They MUST be able to estimate the probability that the peril will or will not impact them. 3. They MUST be able to determine the cost of the consequences in the event that the peril happens.
Again, within the definition of risk – to which ALL INVESTMENT RESPOND, are the characteristics of an asset; what is the quantity (1) and (3) and what is the quality (2) of the peril. If the investor does not CLEARLY SEE these three positions, they will not invest. Period.
This is what drives successful markets and what kills unsuccessful markets.
To ignore the fact that all rational human behavior, intentions, decisions, reactions, conversations, relationships, education, ideology and every other state of human consciousness in a market, corporation, community, family, or social network ARE NOT characterized in the form of a quantity and a quality, is frankly, ignorant to ones market, irresponsible to one’s community, and incompetent to one’s profession.
Yet so many people do not see themselves as an asset. Maybe someone should give people permission.
Social Media and Business Aviation: What if?
Part 4 in a Series on Social Media and Business Aviation: Written In Collaboration with Jay Deragon
Over the past few weeks I have posted several articles on social media – the new method of communicating to the market. I am an admitted novice in the world of social media and technology, but my eyes are starting to open to the possibilities created when social technology and business aviation collide.
We have discussed the opportunity social media presents to fight the war the airlines have declared on general aviation by getting our message out in an unfiltered way. We have also discussed social media as a means to increase our visibility to the market as well as to communicate with that market in order to innovate and better meet its needs on its own terms. All of these are game changing strategies.
So now I want to ask some what ifs!
What if there was a social grid or network built for the purpose of becoming the e-marketplace for private and business aviation travel solutions? What if this social network allowed, encouraged and facilitated the market to come together to aggregate a demand that is currently outside of the supply that traditional channels of distribution make available to the market?
What if the market could then go to the suppliers of private aviation and request trips or routes of travel where individual travelers could buy seats, filling the aircraft, driving the price down? Maybe the price would still not be as low as mass transit airline travel, but still would be much lower than today’s pricing of private aircraft flights.
What if travelers could input their travel profiles into the social grid in such a way as to speak to the entire market and to form affinities around common travel patterns? Would travelers be willing to share their travel information with the market in a profile, sharing where they go, when and how often? Would travelers talk to each other about their travel needs if those conversations led to more new, innovative and efficient travel solutions than have ever existed before?
What if all air charter providers and small scheduled airlines (niche airlines) could input supply into the grid, including empty legs? What if on-demand charters were quoted instantly so that the market had real time visibility to the solutions they need? What if all of these suppliers could participate on a level playing field and in a system that costs the users only when a transaction takes place?
What if the other parts of the business travel supply chain were able to participate as well? Would the hotels, resorts, rental car and limousine services have an interest in participating in the grid?
What if private aviation operators could collaborate to create a bigger market? What if we woke up someday and realized that we’ve been monopolized by technology controlled by some organization that isn’t even in our business? What if we all created a new collective “social grid” in which the general market of travelers realized they could use our system rather than the old commercial system?
What if we could collectively reinvent ourselves as an industry with the aim of serving the larger market? What would be required? Who would agree to collaborate? Who would agree that if we don’t, someone else will? And we’ll all lose when we should have been leading all along?
If we could simply start to build a dialog around all of these questions what could we do? Should we do it? If not, then let’s not even try to answer these questions. Let’s keep doing what we’ve been doing. Einstein once said “insanity is doing the same thing over and over and expecting different results.” What happens if we all decide to be sane?
If you think we need to do something else then join me and invite others to join us in creating a new future where we can all win.
Who will jump into the dialog? Who will invite others to do so as well? Is there anyone out there?
Where are the answers to all of these “what ifs”? Could they be out there in the market of conversations that could create the new system that creates the answers?
The answers are out there in the minds of people wanting to create a new future. Are you one of them?
The Role of Mainstream Media and Advertising in the Private Jet Industry
We have done a considerable amount of thinking lately about the role mainstream (or traditional) media and advertising plays in our industry of private aircraft travel. What are they (the media) saying about us? What are we saying about us? What is the value of advertising in traditional media? How do we track the effectiveness and measure return on investment for the advertising dollars we spend?
That last question posed is something that has been bugging me for a long time. After years of running a business and trying to spend dollars wisely to promote our business, I can tell you that, to date, not one single advertising salesperson has really answered that question for me.
Before I was recently introduced to the world of social media and the tools that it brings with it, I had never seen a media form that we could use to bring customers to us and really know how good we are doing at attracting them by its use. We have always thought ourselves pretty adept at getting our message out through the traditional press – news print and television news, but we have been at the mercy of the mainstream media’s perceived level of interest in our story of the day. They controlled when they talked about us, what they said about us and whether they decided to say anything about us at all. And what about readership, shelf life and viewer ratings? In the old world order, you had to catch it on the evening news or read the Friday business section to see what the media had to said about general aviation.
Not anymore. Unleash the power of the blog, Youtube, Twitter, Facebook, Linkedin and other platforms that seem to be growing out of nowhere daily and we now have the opportunity to speak for ourselves. We must communicate well because, if we don’t, then who can we blame for messing it up? Furthermore, if we don’t listen to the feedback from the market, and make the communication a two-way street, we might wake up and find ourselves grounded due to lack of interest.
We are in an exciting and dynamic business that can change the way people spend their most valuable commodity – time. People want what he have to offer, but at a better price! Technological innovation will drive down costs. Innovation on how we deliver our service will drive down costs. Innovation on how the market finds us and buys from us will drive down price. Less wasteful spending on advertising results in a lower cost model.
Are we in business aviation up to the challenge of changing our way of doing business by communicating to the market with the new media available? The mainstream media forms never did serve us well, and besides, they are in a fight for their own survival.