Customer Manufacturing Group
Customer Manufacturing Update )
Creating Competitive Advantage Through Marketing/Sales Process Improvement

December 2010
in this issue
  • Do you need a mobile specific version of your website?
  • To bundle or unbundle: that is the question
  • Find a need and fill it...
  • Marketing 101: The "Complete" Product
  • Closing Thoughts
  • Dear Mitchell,

    Here is your December Customer Manufacturing Update. We did not issue a new white paper this month, since it is the holiday season. However, we do have several short articles included in this Update for you.

    If you have friends or colleagues who would appreciate receiving this Update, feel free to forward a copy to them using the "Forward e-mail" link at the bottom of the page.

    Do you need a mobile specific version of your website?

    That is an interesting question. As more people access the web via mobile devices, is your website working in that environment? Or are your prospects and customers even wanting to access your site via a mobile device? If you don't know, you may be missing out. Dennis Erokan, CEO of Placemaking Group (the leading Marketing Communications firm for "places"), wrote a great (short) piece on this topic.

    And if you're ready to look at your web presence from a web-based marketing perspective rather than just an SEO perspective, read for the first time or re-read our white paper on Web-based Marketing.

    To bundle or unbundle: that is the question

    Spirit Airlines announced earlier this year a policy of charging for carry-on bags. Horrors, is nothing sacred? At first glance this approach might seem harsh. Or mercenary, or stupid. On further observation, maybe not.

    The goal of most air travelers is to get from point A to point B as quickly as possible. The days of luxury air travel ended decades ago. Carry-on bags cause longer boarding and deboarding times. In addition, dealing with last-minute bags that don't fit in the overhead also causes delay in departure. Logic would suggest that it would be in everyone's best interest if the overhead bins were not needed.

    However, in a logical progression that only an airline executive could follow, the airlines started charging for checked bags. The result? Two negatives: More carry-on bags and more carry-on bags that needed to be gate checked at the last-minute. (Indeed, you can avoid the checked bag fee if you just check your bag at the gate at the last-minute.)

    The obvious solution would have been to incent people to check their bags and carry nothing on the plane that did not fit under the seat. To do that would have required either a carry-on bag fee or a MUCH faster baggage recovery process at baggage claim, or both. (Losing fewer bags would also have to fit in there somewhere.) Again, however, the airlines are not known for their customer-centric thinking.

    Spirit has recognized a few things:

    • Fewer carry-on bags helps the airline be more efficient, which ultimately helps passengers.
    • People with carry on bags prefer to get on the plane early so they get their overhead bin space. People are willing to pay a premium for that. (Southwest, which has eschewed unbundling, charges a higher ticket price for an earlier boarding slot. While this might get you a better seat [exit row] on a initiating flight, it for sure gets you overhead bin space.)
    • This reduced "chaos" at boarding gets them out on time, with less ground time. And, as Southwest Airlines is famous for saying: "Planes on the ground don't make money."
    • Unbundling services is appreciated by many people

    Will this work for Spirit? Don't know, can't say, hard to tell as our Principal, Neil Reckon, likes to say. However, it is a bold, customer-centric step. At least for those customers who want it that way. And truth be told most other airlines are all the same anyway. So a difference can matter.

    What are you doing to think outside-in (customer-centric)? What are you doing about your pricing strategies? Are you consciously bundling or unbundling? Or is hope your strategy?

    Find a need and fill it...

    Many people teach the basic "marketing" or business tenet of "find a need and fill it." Well, Bart Centre has done just that in a novel way. Bart has started a service called Eternal Earth-Bound Pets. What does this business provide? Simple, care for your pet after the Rapture comes and you are saved, but your pet is not.

    The premise of Bart's business is quite simple. If you are a pet owner and believe in the Rapture, then you have a problem. Your pet will be stuck here on Earth without you, with no one to care for it; or people of dubious character anyway. Bart's solution: He has recruited a group of animal loving atheists. He guarantees they will not be saved in the Rapture and will thus be left here on Earth to care for your pet.

    His website states: "Our representatives have been screened to ensure that they are atheists, animal lovers, are moral/ethical with no criminal background, have the ability and desire to rescue your pet and the means to retrieve them and ensure their care for your pet's natural life. "

    The fee for this service is $110 for a 10 year period. That is, for the next 10 years, should the Rapture occur and should you leave the Earth as part of that, his people will make sure your pet is taken care of. If you have additional pets, it is $15 additional per pet.

    His business model is, of course, based on his belief that he will never have to deliver the service. He is quoted as saying: "If we thought the Rapture was ever going to happen, obviously our rate structure would be much higher." In the mean time he appears to have found a need...

    Marketing 101: The "Complete" Product

    One of the things you learn in basic marketing is the concept of a "complete" product. That is, making sure you can offer your customer all of the "things" they expect with a product such as yours. This might include a service package to support the product, or guidance on how to use it, technical support, or whatever.

    The City of San Jose, or at least the politicians who run it, seem to have missed that class. They are investing over $1B in an airport upgrade that is really excellent. The new airport is a delight for travelers. However, we need flights to make the airport useful. Traffic is down at SJC because airlines are reducing their flights. (Sure some of the reduction is economic, but SFO is up while SJC is down, so it is more about flight availability than the economy.)

    Since the airlines are really the airport's customer (they pay the fees the airport needs to survive), Marketing 101 says that the city needs to offer the airlines a "complete" product. The upgrade is just one part of it. The rest includes the ability to fly internationally. (SFO has kept many of its flights because people connect internationally thru SFO.) Why can't SJC attract more international flights? Simple, apparently. The building height limit in downtown San Jose is too high, making it difficult for larger (long distance) aircraft to use the airport safely. Could the City Council limit the height of downtown buildings. Sure. Will they? Apparently not.

    Then there is the curfew. Larry Ellison, CEO of Oracle, embarrassed the city by winning a law suit several years ago regarding the arbitrary nature of their curfew law. He and a few other flights come and go a bit later than the old curfew, but longer distance flights won't risk the penalties of coming in late. Could the City Council fix that? Sure. Will they? Apparently not.

    So, the citizens of San Jose are spending $1B on a new airport that the "customers" don't find a "complete" product. This limits the number of airline flights in and out and limits the traveling public's use of this wonderful new facility. Too bad nobody at San Jose City Hall took Marketing 101. Had they, they could have either skipped the $1B investment, or built a complete product.

    We trust you know better than to do this.

    Closing Thoughts

    We appreciate any feedback you can provide to help us make sure these Updates give you value each month. Feel free to respond to this e-mail with any comments or suggestions for future topics or ways we can make these Customer Manufacturing Updates more valuable to you.

    Thank you for your interest, and if we can provide any additional assistance in sales, marketing, strategy, or innovation to help you increase your sales, let us know.

    Our mission is to help you improve the performance of your System to Manufacture Customers.

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