June 3, 2012 at 7:15 pm | Blog
A recent article in the WSJ on the ascendance of Spirit Airlines highlighted many of the features that have come to represent the race to the bottom in the airline industry:
- No more meals, drinks, or service of any sort
- Pay extra for luggage, checked and carry-on
- Less leg room/comfort
- Poor on time performance
Spirit is the airline version of a low-cost competitor. In fact, their market niche is defined in the WSJ article as being “ultra-low cost.” Every market has their version of a Spirit Airlines. In construction, they’re the company who win bids by quoting a price so low that they can’t possibly make money, and then adds change orders that continually raises the total price. Need your car’s oil changed? Spirit is the equivalent of the oil change place that offers $9.99 oil changes, and then charges $15 more for oil designed to work in your car.
Ultra low cost providers can be frustrating to long-time stable businesses because their sales tactics so often work. Many buyers are enticed by the low up-front cost, and fail to consider everything else that goes into the transaction.
As someone who travels quite a bit, I’ve flown Spirit. Like everyone, I was enticed by the low cost, but there was another factor that influenced my decision to try them. When I had flown other low cost airlines such as Jet Blue and Frontier, I had decent experiences. In fact, with Jet Blue, I had free access to TV the entire trip – something I have to pay for with many of the legacy airlines like United, American, and Delta (that’s if they even fly planes that have TVs, which seems to be rare). My perception of the airline experience was that once you got on a plane, there really wasn’t much difference between any airline.
Until I flew Spirit.
Every airline seems hell-bent on giving you less leg room. This trend is part of what makes a supposedly higher-end airline experience feel like a low-end experience. A Spirit seat is extremely uncomfortable. Like many buyers, it wasn’t until I tried the low price provider that I understood the full value of what I was getting before.
After flying Spirit, I began to look at flying and have asked myself – what else am I willing to pay extra for? Herein lies the problem for the airlines, as my list is surprisingly short:
- Frequent flier miles
- Flight schedules
- Non-stop, or direct flights
Some of the other items that I wouldn’t be willing to pay more for include:
- Baggage check-in
Stop Differentiating – Start Selling Relevance
Take baggage fees as an example of a differentiator. Southwest has an ad campaign built around the fact that they don’t charge baggage fees. Am I willing to pay more for that? As a business traveler, I rarely check in a bag (I almost always carry on my luggage), so the fact that some airlines charge a fee whereas others don’t doesn’t factor into my buying equation. This doesn’t mean the Southwest campaign isn’t effective in pointing out a differentiator. Were my priorities correlated to those of the buying public, Southwest’s ad campaign would be a perfect example of what Jaynie Smith says in her new book, Relevant Selling, “differentiators are not competitive advantages unless they are relevant to the customer.”