Ultimately, the true test of an airline’s success is the number of bums on seats. And, given the continuing consumer penny pinching around the world and the doubling of fuel prices in the past three years, the fact that Air New Zealand has made a profit each year for the past decade in very tough operating conditions, and was named the Air Transport World Airline of the year in two of the past three years, means it is passing with flying colours.
A lot of that success can be put down to the airline’s local and international marketing strategy, its company-wide focus on creating a point of difference through service and innovation, outgoing chief executive Rob Fyfe’s belief in the power of marketing, and the evolution of its business to help, as the brand mantra goes, “liberate its customers from the ordinary”.
Over the past three years, all of Air New Zealand’s brand association measures have increased: it now has the best reputation of any company in New Zealand; it was voted first in the Star Alliance customer satisfaction survey; it took out the Roy Morgan Australia Customer Satisfaction Award; and it has had a ten percent increase in customer recommendations.
But long before anyone sets foot on one of its planes, a large part of the equation is creating demand. And in New Zealand, its successful More Deals Every day retail platform has done just that, delivering significant sales and return on investment and increasing the number of people who felt Air New Zealand had competitive airfares (up from 37 percent in 2010 to 52 percent in 2012).
In the Trans-Tasman market, which is contested by eight different airlines, it has increased revenue through innovation with the creation of Seats to Suit, which is a full-service product and a low cost carrier product within the same cabin.
Creating demand and awareness in larger, international markets where it’s impossible for a relatively small airline like Air New Zealand to buy awareness has led to the airline fully embracing social and digital media. Along with its own Flying Social Network, the strategy was designed to integrate with customer service, product innovation and marketing initiatives across the business and, as a result of its massive success, Air New Zealand was ranked 11th in Klout’s Travel Influencers metric and earned global recognition as a leader in creating conversations with consumers through the likes of body-painted staff, zany in-flight videos and spokespuppet Rico, which have clocked up millions of views on YouTube between them.
Converting discerning consumers requires more than an entertaining, well-seeded viral video, however. It also requires a world-class website that makes it easy to find special offers and deals on everything from flights to campervan rentals. And Air New Zealand’s website, which was built in-house, now brings in one third of its revenue, with conversion of visitors to sale up by 24 percent year on year since implementation in 2006.
The wider digital strategy has also helped convert consumers over time, with tools such as When’s a good deal? How far can I go? Low fare alerts, Special deals, [email protected] Deals and the Air NZ Twitter Fairy. Grabaseat also continues to be renowned for its innovative and engaging marketing and has become so successful it is now a fare type.
Air New Zealand has also recognised the importance of partnerships, as evidenced by the Air New Zealand Holiday Stores and BNZ tie-up, a store-in-store retail offering that offers customers the convenience of travel and banking services in the one location. The airline’s international reach and reputation has also been enhanced over the past ten years with a strategic partnership with Tourism New Zealand, one of the world’s most admired tourism organisations, and having the All Blacks on board certainly hasn’t hurt either.
While Air New Zealand has had inspirational leadership in the form of chief executive Rob Fyfe, who is departing at the end of the year after nine years with the airline, all employees are encouraged to understand and live the brand values and showcase the best of the country by following four rules: welcome as a friend; be yourself; share your New Zealand; and can do.
To succeed in an industry that is highly regulated, highly competitive and in many ways undifferentiated, Air New Zealand has focused on being distinctive, creative and desired above the competition. Sometimes that takes the form of exemplary service, at other times it may be the creation of a new product to cater to everyone on the plane, from families to business travellers to holidaymakers. And this innivative attitude led to it researching, testing and developing the world-leading premium economy SpaceSeat and economy SkyCouch.
Both products have contributed to Air New Zealand’s brand reputation internationally and have won a host of design awards. They have also increased revenue, with the SkyCouch selling out much faster than the rest of the economy cabin on the key international routes, and also captured the attention of other carriers, with the airline said to be in discussions with 12 other carriers interested in licensing the IP for use in their fleets.
Despite the high levels of customer recommendation, emotional and behavioural loyalty is also crucial and it has referenced that by creating a world-class loyalty scheme for every type of customer. It now has 1.2 million members and its latest loyalty innovation was the OneSmart technology built into Airpoints cards, which has been developed to make it easier and cheaper for customers to take money overseas, enables them to access better rates on foreign exchange, reduces the fees charged when using a card for international purchases and also lets them earn Airpoints Dollars.
While the health of the brand is obviously central to the health of the company, it isn’t solely a brand story. It is also inextricably linked to a business goal of delivering sustainable, profitable growth and, so far, so good, with domestic and international passenger numbers increasing by 6.3 percent since FY10 and a total of 13.1 million passengers being carried in FY11.
Over the past ten years Air New Zealand has worked tirelessly to deconstruct the total customer brand experience and reconstructed one that, through savvy marketing, a focus on customer service, product innovation, industry leadership and ambassadorship for New Zealand, has helped turn it one of the world’s best airlines—and one of the world’s best examples of inside-out marketing excellence.
Winner: Air New Zealand
The people: Rob Fyfe
Judge’s comment: “Air New Zealand is an amazing example of marketing leadership from head to toe of the organisation and I think the best example of that is the fact that the people on the ground, in the planes, in the Koru lounge, everywhere at every touch point, live their brand.”
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