Replying on existing brand name vs adopting trends
178 years of history, 8 Million passengers and 39, 512 flights in 2018 alone. 22,000 staff members working to build one of UK’s much-loved travel brand. They said, “Don’t book it, Thomas Cook it”
But last month, £10 billion worth of credit claims, 150,000 British holidaymakers stranded abroad, and a group that exists no more.
At a time when brands closely follow the concept of segmenting, targeting and positioning to successfully create customer-centric offerings and strategies using both traditional and digital methods, Thomas Cook only relied on its waning brand name and footfalls to stay relevant in the market.
Did they fail to re-invent themselves in a changing world? Offering set packages, worked out in advance, remained a stark contrast the personalised experience with the power of a “click” backed dynamic airline inventory pricing and unlimited price comparison tools.
EU is hub to over 135 airlines, and its five biggest firms control approximately half of the market. However, high costs, overcapacity, razor thin margins and competition are some of the reasons why airlines are finding it difficult to survive.
”Reinventing the wheel can only help airlines take off but how do they deal with turbulence?"
The basic lesson in Business School 101 is not to maximise profit; it is to survive. And to survive, businesses must change and adapt with the times.
It’ll probably get harder before it gets easier. Rising costs and overcapacity are big problems. And yet, as in the case of Thomas Cook, it is arguable that, in their search for mitigation, airlines have been slow to reach the digital frontier.
This sounds like a paradox: don’t low-cost airlines use websites to keep their costs down? Yes, they do. But there is so much more potential.
The importance of following trends fast enough
Digital transformation is an umbrella term: there are myriad ways it can be put to use. Fundamentally, though, it is about improving productivity, boosting operational efficiency and increasing profits.
If margins are being squeezed, it stands to reason that there might be less investment in IT. However, IT investment would be a higher priority for an airline whose business model is predicated on digital; as investment goes, developing fun, interactive and relevant UXs is a cost-effective way of improving the customer experience.
As the demise of Thomas Cook shows delivering a brand experience with relevant innovation is critical, as is having a true point of difference. That’s where the emotional connection with customers is built.
Airlines need to find cost-effective ways to make customers feel special. Focusing on the customer – in particular their behaviours and attitudes – and showing a willingness to adapt are the best ways to survive and prosper.