Brad Seitz @ Topaz

The Image of Low Fare Airlines (and other companies): Is it Fact or Fiction?

It is amazing to me the ability of companies to create good (and bad) images about themselves.  It happens all the time due to various factors - leadership, customers, reactions, non-reactions - all factoring into how they are perceived in the market.  As a leader of a small company I strive to always ensure we never shoot ourselves in the foot by providing the hghest level of service.  But what about low fare airlines?

We have done studies in the past, and will do more studies in the future about this subject, but I really wanted to write about this today - and just look quickly at what happens in the market.  So this morning I priced two trips - and this is what I found:

Boston - Los Angeles - Departing on a Monday as early as possible and returning on Friday, again departing in the morning.  Southwest Airlines (the low cost carrier) was $613 round trip.  That would involve a stopover.  An alternative itinerary on United and American (one airline each way) would cost $429 round trip.  Those flights were non-stop.  Now if we factor in baggage fees, the difference is not as great (Southwest allows a free bag check, American and United would charge us $25 each way).  But even factoring in that, the low cost carrier is not really that low (at least in this market).

Phoenix - Dallas - Departing on Monday morning and returning on a Thursday at the end of the day, this example had similar results.  Southwest Airlines with a connection was going to cost us $473 while non-stop travel on US Airways would be $282.  We have the same implications for the baggage fees, but the low cost carrier is not really the low cost.

Thinking back a few years I remember that upwards of 60% of the time the low cost carrer was not the best deal.  Today, whether we check a bag could influence our decisions - but in the end the real influencer of prices is the market - and how the airlines are driving their market share with the movement of their prices.  But we perceive that Southwest is in fact a low cost carrier, so therefore they would always be cheaper than a United, American or US Airways - but that is not always the case. 

For business travelers, you could do all this research, but that ultimately takes you away from your paying job, so you must rely on your managed travel program to do the work for you, and they will make sure the performance is there when obtaining the best itinerary at the best price.

Measurements: Why you should care!

This will be a quick post.  Simply put, in business you need to measure performance.  If you do not measure, your competitors will.  If you do not measure you will not perform the best you can.

I hear all the time about people in corporate travel management talk about how they do not measure.  They do not measure the performance of their vendors, or their spend, of anything.  I even know of consultants who say just do your thing and do not worry about measurements or comparisons.  They are a waste of time.  Really?  A waste of time?

Xerox thought that too - then they saw the light.  They measure everything.  They wanted to reduce meeting time - put a process in to make them more productive - and shorter by measuring - and the net result was better performance.  Companies all over the world measure to make sure they are doing the best they can.

How about you?  Are you measuring everything about your travel program?  Are you comparing your program to others?

Do it.  Now.  It will do the following:

a) Make your program better

b) Make you a better employee

c) It may save your job from the chopping block.

The salesperson is dead. No more selling. Selling sucks.

I have come up with the conclusion that selling is dead.  The idea of a salesperson is now officially a dinosaur.  They are (or should be) extinct.  Maybe this is just semantics – maybe it is how people sell that is dead – but just hearing the word salesperson makes me cringe.

What is now happening and what should happen with everyone is the ideal that the service or product you offer is something I would like you to consider, but only if it meets your customer requirements.  I am not going to sell you – I want to explain what we do, why we do it, and where it might help you.  I am not going to sell you something you do not need.  Why would I ever want to do that?  I have to give the customer more credit than that – and can only imagine someone selling me (and I mean convincing me) that what they are selling is something I really need – and then to find out I do not?  Wow you would hear a lot about that here, and it would not be nice.

This is what is wrong with selling today.  People sell me something I do not need.  But what I want to hear is why I should use your services – or maybe not because they are not needed.  I want honesty.  I want reality.  I want to be treated right.

Let me share an example.  My best friend sells large, cardboard containers that hold liquids (with a plastic liner) and they generally fit onto pallets.  He is in a competitive industry.  They compete on service and price, and probably a few other things.  He understands what the competitors do and how they do it, he knows what they charge, and he learns other things that may help him differentiate what he sells from his competitors.  But he does not sell.  What he does is inform, share, and deliver service.  He wants to tell as many potential clients as possible why he is better.  Why paying a little more is worth it in the long run because of quality.  Why having a contact who understands the importance of the product to the customers value chain results in quick action.

I never sell.  Anyone who talks to me about Topaz International and what we do understands I give them the straight answer on what we do.  I believe in what we do and want to shout to every potential client and company what we can do to make your travel program better.  But in the end, sometimes companies or individuals just do not see the same benefits that I do, and I must live with that.  I even believe that TMC’s can benefit from our services – but sadly most don’t get that either.  But do I sell?  Nope.  I share.  I educate. I inform.  I am a resource.  I am a partner towards making them better.  No excuses.  No BS.

The salesperson is dead.  Selling is dead.

Why are there so many professionals with no listening skills?

When I was a freshly minted graduate of Babson College, and ready to take on the world, I received a job offer from Xerox and moved the family to Rochester, NY to start my new career.  I envisioned the satisfaction of corporate life and all that came with it - the ideals of the living the American Dream.  Now while I can look back and say most of my dreams were not achieved, I learned a skill at Xerox that I believe is lacking today in the world of business.

People do not listen.

Somewhere along the path of working at Xerox, a manager suggested I take a course on listening skills.   I am pretty sure this suggestion came out of the annual performance review which to this day, I detest.  But at the time it allowed me to get out of the day to day pressures of the job I was doing, and that was a good thing!

And honestly, it might be the most valuable class I have ever taken.  It taught me a simple skill, of emptying the mind of all thoughts and distractions, and focusing on the person you are listening to.  It was about not being judgemental, but always seeking clarifying questions.  And many times it was about not saying a word.  I always try to use this skill, but I must admit when speaking to those that do not listen, it can be hard to listen to them.  And thus, all hell breaks lose.

But, in the end, it pays to work on this skill.  We have so many distractions that it can be hard - but I will say it is also very refreshing to focus on the person or people you are engaged with, and truly listen to them.  You may hear (or see!) things you never thought of before and that can be pretty cool!

How did I buy my ticket to Scotland?

I am going to Scotland this spring.  I've never been, so I am looking forward to visiting Edinburgh as well as the countryside of England with family.  I will be trying various whisky's (as known to the locals) and may even purchase a scottish outfit (imagine what I could be talking about).

But this is not about that - it is more about my shopping experience with purchasing an airline ticket for my wife and I to Edinburgh from Portland, Maine.  There are a lot of variables that one must consider when getting a ticket.  Think about this:

a) The lowest fare was a British Airways ticket from Boston via London.  However, to get a seat assignment would have cost me additional money.  A lot more.  Add that in (because I do NOT travel in middle seats) it became the most expensive.

b) Some airlines would charge for a checked bag.  While I may not need to check a bag, I was not sure.  Eliminated all those guys.

c) I have a Continental Mastercard - which gets me preferred seating and free checked bags.  Tipping point.  Portland - Newark - Edinburgh.  Done.  Got good seats (in advance) and I know I can check my bag (which I may do just do I do not have to deal with it).

The world of buying a ticket is changing - and the surprises that we hate at the airport when we get dinged for fees must be taken into account.  Business travelers may not care - but leisure travelers usually do care (very price sensitive).  Topaz can customize a solution to your business travel audit, so please feel free to ask us for advice or for a customized solution!

In the end do not forget to look closely at bag fees, seat assignment fees, carry on luggage fees and requirements, etc.  It may make a difference to the happiness of your trip!

Distribution of Travel: Where are we today

I write on this subject frequently because it is, well, kind of fun in our world of corporate travel.  Whether you call what we are experiencing at the moment as a revolution, evolution or maybe just a storm, it may be reshaping how travel managers think about purchasing their travel.  My take on the world of travel distribution:

a) GDS Distribution:  This is the classic manner in which airlines selltheir tickets.  Maybe old, but working quite well to consolidate and sell tickets based on a complex combination of availability, price, and the sheer number of travel airlines, hotels and car rental companies available.  The GDS is almost always behind what the customer sees, running the process to find your travel.

b) New Channels: The new channels are alternatives to the GDS's that are using new technologies and cheaper cost structures to lure the airlines away from the traditional ways of selling tickets.  Hey, if you could sell your product cheaper, wouldn't you?  Then, if you could sell the tickets plus sell the extras as well, why wouldn't you give it a shot.

c) Google: What if we could build a vehicle to sell the same tickets but not charge you anything?  The google way - based on a belief that they can sell advertising to support such an initiative.  Classic Google (really, Brad, Classic and Google in the same sentence?).  But this could really shake up the world.

Thoughts for the Travel Manager:

a) Choices:  The biggest issue I see for Travel Managers (and the advantage for the classic GDS channels) is that they have a lot of airlines (and hotels, etc) in their system.  So, this makes it easy for a travel manager to feel like they are seeing what they need to see.

b) Pricing:  This is a tough one - fragmented pricing is the best way to describe it.  Do you care about getting the best price?  If not, you have nothing to worry about.  If you do, you probably want to implement a strategy of multiple channel access to obtain what is available from a variety of sources.

In the end, you will have to look at each of the alternatives and understand what they have to offer - and it is best to obtain an unbiased, un-selling type of view.  This will be the most objective way to make the best determination for you and your company.  You can obtain this type of analysis from us at Topaz, or from a variety of travel consultants or even your peers.  Most everyone else in the field of travel may have a biased view point that will skew their suggestions.  So be careful.

But embrace it - these changes are happening right before our eyes.  We have yet to understand if this is revolution, evolution or just a little storm.

TSA Laptop Seizure: Fight it or find a solution?

Some of you may know I teach a college course in Entrepreneurship.  One of the things I tell the students, is that your business idea must solve a problem or pain.  Sometimes the customer knows about the pain or sometimes they do not.  It got me thinking about the long standing debate about laptop seizures by our border police and the Traveler Security Administration.  There is a pain that needs solving.

You see, they are doing their job of protecting us, and protecting the flying public.  We can critisize them for their methods, but their goals seem ok.

So what is a traveling business person to do?  Use the cloud.  Put those documents in a save place in the cloud, and travel with your laptop.  Then who cares if you laptop gets taken away.  There should be nothing of importance on there.

Of course, you need not comment if you believe they should keep their hands off your stuff.  I agree.  But at least it solves one problem for businesses.

Does the lowest logical airfare matter anymore?

I have read with great interest lately people writing about the demise of the lowest logical airfare for business travel.  I have read and thought about this subject for many weeks, thinking about whom writes this, and the reality of it.  Could it be true?  Is the end of the low airfare near?

I do not think so.  And let me share with you why.

The basic premise of running a business is to create profits.  Profits are created for the shareholders or owners (I know they are really the same) by increasing revenues and decreasing expenses.  Leaders and owners of these companies have been known to be the most frugal humans on the planet.  By example, Warren Buffett drove a used car for years until just a few years ago when he purchased his first new car, a Cadillac (paid in cash, of course). 

The premise that employees would be allowed to travel on more expensive airfares to accommodate things such as airline preference, shorter flight times, non-stops over connections, class of service, to name a few, just does not sit well with me.  Every corporation I have worked with has a policy based on a set of standards and preferences that balances cost with employee preference.  To let everyone do what they want has proven to increase costs and reduce profits, a violation of business 101.

In addition, I believe every business travel policy is evolutionary.  It changes, it grows, it gets smaller - it adapts to the environment of the company and the outside business environment.  When the largest expense item after personnel and cost of goods sold is left un-managed or left to the decision of employees, you are faced with increased costs and decreased profits.  But a travel policy and the adaptation of lowest logical airfare ensures that when employees do travel on business they are doing it at the lowest possible cost to the company.

So who writes all this stuff about the demise of the lowest logical airfare?  I'm not sure - new players in the industry, or maybe business leaders who are trying to sell their product based on a new set of parameters.  In the end, what I write or what anyone writes really has nothing to do with what will happen - because, like always, the one writing history will be the customers - and the ones that pay for business travel are the leaders of the companies that pay for the tickets.

I expect that in the end the ideal of lowest logical airfare will remain the standard for business travel.  It will get more complicated with various channels and ancillary fees, but flying on business must be at the most cost effective manner possible for the businesses of the world.

My life as a supplier and buyer in corporate travel

I have a new found appreciation for the effort it takes for both suppliers and buyers to figure out the mess we live in called corporate travel.  Buyers are looking to create the best travel program for their company, by putting together a group of suppliers that meet their needs.  They want good airlines, hotel, car rental companies and others.  Then they want the infrastructure to ensure it gets pulled off.

Then there are the suppliers - all of which have something good (or maybe not so good) to sell and make these travel buyers the best they can be.  And then there is the value - the value achieved by buying whatever it may be.  And I make a very minor point here - value is not cost.  Value is the perceived benefit to the corporation for the products and services they are buying. 

The mess is the over complication of the products and services.  What should one be looking at?  What are the values that mean something to you or mean something to the company that you work for?  Do you care about what something costs?

The life of travel is evolving right before our eyes.  Where we buy and how we buy seems to be changing, and the words of pundits and pontificators flood the web, but it really does not matter.  In the end, the customers will determine value and they will determine the fate of our industry.  And hold on, because I think it will be a very interesting ride.

Southwest Airlines and the response to the Arizona Accident

Those of us in the travel industry watch and read everything when something happens to a plane or hotel in the world.  We want to know what is happening, and hope that whatever happened, it is corrected.  For some reason, Southwest Airlines makes me feel like they are doing everything possible to ensure this does not happen again.  And since I am flying them in a couple of weeks, that is a big deal.

I also like what they did to the passengers on that flight from Phoenix.  Now we can all say they should have done more, but I am not sure any of us really knows what is enough - but a full refund, two tickets for future travel, and an apology - right after the incident - seems fair to me.  This may not even be an issue with Southwest but something related to the manufacturer.  But they stepped up and did the right thing.

That is what makes them a little different than a lot of the other airlines in our world.