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The airline CEO's guide to social networking and the new customer relations paradigm

The evolving world of social media creates some basic and irreversible changes.

Customer service threats and opportunities cannot be ignored; neither can mini-crisis management possibilities. The marketing and branding potential is vast but still undefined; equally, the new media are going to upset the distribution equilibrium. And there is always the key question: Does the income justify the expense of participating? This second part of our report attempts some answers and looks at some of the market leaders.

INDUSTRY LEADERS JETBLUE, THE NEW YORK JFK-BASED LOW-COST AIRLINE WITH A HIGH-QUALITY PRODUCT, HAS EMBRACED SOCIAL MEDIA FASTER THAN MOST. The LCC today boasts the largest airline following on Twitter, of more than 1.8 million across their main account and JetBlue Cheeps, a separate low fare marketing medium. Seeing the role as essential for customer servicing for a "listening airline", JetBlue has 17 dedicated staff responding to tweets and other social media needs, up from 12 last year. Even CEO Dave Barger (@DavidJBarger) joins in with regular tweets. There is no uncertainty about management buy-in there. It does have a financial cost, but it has value: one JetBlue customer, after rebooking through Twitter no less than four times when flights at New York JFK were cancelled in last December's snows, blogged about being "fairly star-struck by this rock-star quality treatment!"

Southwest, always the great innovator in real social communication, is now a big player in this "virtual" world, with more than 1.1 million Twitter followers. It too focusses more on using the Twitter channel to monitor and defuse potential mini-crises and to keep tabs on bigger issues. This information can then be fed back to staff at the airport and to other operational and customer relations teams. Here, the potential for numbers getting out of control is greatly reduced. At the same time, the airline aims to maintain credibility by not overpromising.

After JetBlue and Southwest, the follower numbers drop off steeply. As of mid Apr-2011, Virgin America was next with 190,000, although newly merged United and Continental nudges ahead with 320,000 followers if their numbers are aggregated. Out of the top 10 in follower numbers, eight are US airlines.

Twitter as a mini-crisis management tool

There are multiple shades to the use and impact of these new media. From promoting cheap fares, through responding promptly to reservation-related issues, to major events such as Qantas' A380 "crash", exploration and experimentation is continuing.

As the Qantas example illustrated in Part I of this report, traditional mass media now rely heavily on first-hand reports from Twitter and Facebook. The "news" picked up from these sources is avidly, and too often unquestioningly, pumped out verbatim, in the urgency to break a story. Within seconds of an event, the information can be in the hands of a news outlet. An incident can become a temporary crisis in one click of a phone key.

That was a Eureka moment for Qantas. But there are less spectacular uses. The most durable evolving category of uses will be as part of an airline's overall crisis management activity.

Twitter's most valuable and uncontroversial role emerges when things go wrong – and in the airline industry, things go wrong very, very often. Unhappy grounded passengers sitting around in an airport are prime users of mobile devices to communicate among themselves and with conventional media outlets. In those circumstances, things can quickly get out of control.

Most airlines today have crisis response strategies and teams, but there are so many day-to-day "mini-crises", such as delays and cancellations, that these tend to become run-of-the-mill.

Frontline staff are often left to handle the problem, relying on their experience, meaning that someone good on the ground can struggle through. If, as often happens, the staff are not well experienced or trained, they can alienate hundreds of your customers faster than the refunds can be made. There will always be someone on the spot to tweet the news and to tell their followers on Facebook, post it on YouTube and generally create embarrassment.

This can quickly deteriorate into an "I hate X Airlines" because "they left us all hungry and in the dark" when a delay or cancellation occurred. Frequently, the really alienating issue is that "nobody cared; nobody told us anything; no-one seemed to know what was happening". Meanwhile, however, across various parts of the airline, all sorts of actions are in reality under way to reschedule, rebook or accommodate. But no effective system exists – between the operations "silo" and the communications team and ground staff – to keep the traveller informed. Few airlines have that sort of communications coordination in place.

In the past, this didn't matter so much. Back then, by the time the discontent spread, a solution was being provided and the public damage could be contained more easily. Today, the discontent can spread instantly and, the longer it remains unanswered, the greater the indelible damage, creating a host of customer relations troubles. This should be a relatively simple institutional issue to fix – but airline silos are remarkably rigid. In a perverse way, social media lessons are pushing airlines to rectify this shortcoming.

Where the airline has a naturally consumer-sensitive attitude, like JetBlue (especially after the Valentine's Day blizzard of 2007!) and Southwest, this comes easily. But for larger and older airlines, the mere fact that Twitter is there should be a wake-up call to improve mini-crisis communications. This medium offers an easy way of doing it, by simply working the way back up the communications-operations chain to make sure the central office staff transmit back down the line, at the same time ensuring the battlefront soldiers are kept well in the picture.

Passengers feel empowered if they have information about a problem – and the information is vastly better if it comes directly from the horse's mouth than from the numerous, usually unfriendly messages that circulate among dissatisfied passengers sitting around in the informational dark. As anyone in customer service knows only so well, the brownie points to be won from handling bad situations well are even bigger than performing well all the time.

In cases where things go wrong, simply sharing the problem with the passengers and letting them know what is being done can be a real comfort. Even if they don't like the situation, they will feel you are with them, not against them. You still have to fix it, but you have eased the immediate threat.

In other words, every "crisis" is actually a great opportunity to shine, and the instancy of Twitter can be particularly helpful. Social media communications tools make the opportunities to shine so much greater. On the other side, failure to use this resource also means that the travelling community shares its own "news" with each other, and most of it will be uncomplimentary.

SCALING UP IS NOT SOMETHING THE AIRLINE SOCIAL MEDIA ENTHUSIASTS DWELL ON. BUT THERE CAN ONLY BE SO MANY ROCK STARS. Faced with the potential of several thousand customers simultaneously wanting instant responses to their messages, there is simply no possible way of scaling up, at least on the present terms. Most messages will need more than an answer – they will first need action to rebook a flight, or find out other information.

It is clear why today's airline Twitter response activity can hardly be more than a holding pattern, a learning process. For the first movers, such as JetBlue, Southwest and Delta, it is generating a lot of goodwill, and for passengers, a sense of being cared about ("reached out to"). But, as the volume picks up and the airline increases the number of staff involved in the responses, those ripples spread wider and wider. That is not to say this is a false dawn; it is real. It is instead a beginning.

What comes next, however, demands versatility and nimbleness. And the assumption is that an airline that has been through this learning curve will be better equipped to meet the new needs and to adapt. Even if that isn't so, chances are that the advantages gained as a first mover will have generated sufficient goodwill to make the process worthwhile. In a commoditised world, even the smallest difference can be a useful differentiator.

Perhaps, with some originality, the scalability issue is not insurmountable. One way to scale up relies on cultivating a creature of this new generation of communication, the independent "brand ambassador", or high-profile communications leader, to carry the torch for the airline. In good times, these supportive bloggers, Facebook users and twitterers can spread good news about the airline; in troubled times, they can help get messages out quickly, with the added value of an arm's length interpretation. Their voices will usually carry authenticity, even where the airline's word might be doubted.

Another, somewhat ironic option – having only recently moved as far as possible away from this personnel-costly activity – is to refer many tweeters to a new call centre, where they are handled by reservations specialists. Important too is sorting out who is really worth talking to – or not. One company, Simpliflying, is marketing a package to help sort the wheat from the chaff.

Social media as distribution tools

Twitter was designed as a means of sending sms (text messages) by phone to multiple recipients – one-to-many. Hence each message has a cap of 140 characters, to stay underneath the single-page sms ceiling.

Twitter's most popular early use was for old-fashioned uni-dimensional transmitting of (usually) low fares. This is a fairly user-neutral and less popular role, acting merely as a transmitter and not a responder. It can also become a form of low-fare frequent flyer programme, where Twitter-only fares are offered, or are offered to twitterers and Facebook friends before the fare is launched publicly. This offers recipients a feeling of exclusivity and, hopefully, of loyalty.

Singapore's Tiger Airways, for example, has fares that are "exclusive to Stripes members". Membership is simply a matter of signing up to pay a fee of about USD30, to receive the first bite at some very attractive prices, such as a one dollar fare for one leg of a return trip. In the process, Tiger accrues a very healthy source of ancillary revenue, very much along the lines of a frequent flyer programme, but without the frills. But Twitter's immediacy and simplicity limits its potential independent role as a distribution mechanism.

Facebook plays a very different role in airline social media strategy. It does not provide for blanket direct selling in this way, but it is still a good and relatively versatile platform for marketing, in the widest sense of the word. Numerous airlines have, for example, held Facebook competitions designed to promote their brand and specific products.

Facebook online reservations are now a reality. Late last year, airlines first began to use Facebook in the reservations and check-in process, a sign of a flurry of future developments. Initially – Delta was first – the company Facebook page allowed a full search of the airline's inventory, but bookings had to be redirected by clicking through to the airline's website.

In Mar-2011, Malaysia Airlines, using a SITA–developed system, became the first to provide both online booking and seat allocation directly through a feature, MH Buddy, on its Facebook page, as well as the ability to check in online on the page. Another tab allows the passenger to tell friends he or she is on the flight so they can arrange to select adjacent seating, or not, if information is defaulted to non-share to protect privacy.

Others are sure to adopt this approach, attractive to airlines because it partitions their product from competitors'. As the novelty wears off, consumers will, however, quickly want to have some guarantee they are still getting the best deals. Transparency remains king – and so the fashion adapts.

But, despite a proliferation of debate about how the new media might challenge conventional distribution, few airlines are ready to suggest they would rely on them in a commercial sales role. They may be wrong, but for now, the primary role is in customer relations. Change will almost certainly come. How and when is less clear. Enormous vested interests have a stake in the status quo, or at least in an orderly evolution from today's situation. And, as the market leaps ahead, they will be buying into these developments in unpredictable ways.

Meanwhile, the Google-ITA combination of the leading search engine and the industry's source of airline fares is a potential distribution avenue. But that is another story in itself.

Indirect marketing through social media channels is also a growing strength. Malaysian based LCC, AirAsia, whose market straddles many languages and cultures, is an active user of social media. The CEO of long-haul arm AirAsia X, Asran Osman-Rani, says that the carrier tracks approaches to airasia.com from the social media platforms. Its "direct sales conversion is not big, but it's bigger than we get from GDSs!". The carrier ranks second, just behind Xiamen Airlines, in terms of followers in China, with 47,000 followers on Twitter-like Sina. The Chinese major airlines are very slow to discover the new media. But they will get there, and then numbers will blossom!

Other media, such as LinkedIn and YouTube, also have a powerful influence. With more modest numbers and a more considered tone, LinkedIn is a medium for professionals and for discussion, usually of business related issues. It has developed a valuable role in executive search and many of its participants actively use LinkedIn as a means of perpetual job hunting. Employers increasingly find it valuable for this purpose, to such an extent that executive search firms, in the US particularly, are feeling the downdraft.

LinkedIn's user profile contains a valuable demographic, describing itself as having an "affluent and influential membership". Each of the US Fortune 500 companies is represented and more than one million companies have company pages. Of the Fortune 500 companies, 69 used the platform's "hiring solutions" last year. The website's media releases are preoccupied with employment issues and with career opportunities, but LinkedIn can also be a useful tool for disseminating concepts and in-depth information among a member's user group.

JetBlue, for example, uses its LinkedIn page to promote product, with a separate dropdown showing employment opportunities.

Then there is the ubiquitous YouTube. How much damage did the historic catchy baggage song do to United? First posted on YouTube, "United breaks guitars" caused the airline endless grief, or, according to some, generated publicity that did the airline no damage at all in a commoditised business. They argue that responding to this sort of criticism is not worth the trouble. The view might contain a grain of truth, but hundreds of person-hours were spent responding to media and trying to contain the news. Only a brave customer relations VP would take the tough course of simply ignoring a critical video that has been viewed more than 10 million times.

The passenger was upset that his guitar was broken, but – and here is the current core of the Twitter "reaching out" strategies – mostly that "nobody cared or would listen". A now Jeff Smisek-led United Continental would probably not have allowed this sort of issue to get out of hand, but these attacks can appear from out of the blue.

YouTube is used by some airlines as a means of getting a visual message out, either as presentations or commercials. YouTube is not instantaneous like Twitter, although its visual nature can create a strong and enduring impression. Amusing or catchy commercials can be viewed millions of times. Air New Zealand has been a standout in this regard. Imagine 12 million viewings of inflight safety videos!

The numbers around YouTube are, like much of the whole social media movement, astonishing. It receives more than two billion visits each day, 24 hours of video are uploaded each minute – so being heard is not a given – and, significantly, 70% of its traffic comes from outside the US, according to ViralBlog.com.

As a result, YouTube has become a useful marketing and branding opportunity, as well as an information medium, linked to Twitter and Facebook – so it too should become a part of the mini- and maxi-crisis management strategy.

But it can also be used equally well to illustrate shortcomings of airlines. Any traveller can film a sequence and almost instantly upload it via Twitter or Facebook onto YouTube. Once images are on the web, retrieving them is near-impossible. Regaining credibility also takes time.

Airline safety demonstration/viral videos on YouTube:

Delta's "absolutely no smoking" video.


United breaks guitars: United broke a passenger's guitar and refused to compensate him, inspiring a song about the experience.


A Southwest flight attendant raps the airline's safety demonstration.


Virgin America: "Mood lighting makes everything better"


Virgin America: "Find what you fancy"

 
Cebu Pacific's safety demonstration dance


Air New Zealand staff have "nothing to hide"


MadTV's parody of airline safety demonstrations.

And now for the crunch: Is it all worth it?

There is a common theme with the missionaries of social media – they are filled with enthusiasm, even passion. They are doing a public service, actually helping people! This delivers a good message to all employees. But are they helping the airline, giving it an edge? Importantly, are they earning it money?

The bottom line for a business must always be balancing the cost-benefit equation in favour of the benefits. In estimating the strategic course to follow in social media, the airline CEO, just as with any other activity, needs to be looking objectively at both the cost and the likely return for the company's actions. The CFO and board should, meanwhile, be supportively critical of any expenditure, demanding to know the payback for any investment.

But estimating either side of the equation in these social media activities can be complex, because:

1. There is no road map, in an area where most companies are still feeling their way. For example, American Airlines recently launched a campaign on Facebook, offering 100,000 air miles for the lucky winner from among those who said they "like" American on the airline's Facebook page. When the campaign launched, the page showed 2558 friends. Within a little over two days, that climbed to 210,000. Suddenly American had a problem, in some ways an embarrassment of riches – but what to do next? Developing a coherent and flexible strategy is essential. Building expectations and not delivering is not a good place to be. But being "nimble" is the key. As all of the more active social media users will say, this is a learning phase, probably a road to somewhere, but we don't yet know where;

2. The new media environment can raise new demands on costs. Those demands will grow most where the investment in social media is least controversial: customer relations. The important thing here is that an airline's cost base will increase even if no specific social media strategy is adopted, simply due to the heightened challenges created by today's empowered customers. As that consumer power grows further, failure to upgrade customer support activities will result in costly backwash when things go wrong. In other words, this will not be an optional activity for much longer. It is probable that not engaging will actually cost more. But the interim issues of scaling up to meet fast growing instant message demands will raise real issues;

3. On the other side of the ledger, the likely benefits, in the short term at least, are mostly "soft" and consequently difficult to quantify. This can make presentations to a sceptical board difficult, when they frequently have little or no personal experience of social networking. Benefits may consist of testimonials from Twitter correspondents and even favourable mainstream media commentary. They will commonly generate new passion and pride among (some) employees. Facebook – and possibly other media – may, in future, become a useful distribution tool. But not yet. There is a valid case, as with the Qantas A380 example, for ensuring that social media are ready as protective weapons. And mini-crisis management is the growth area to be addressed.These activities in airlines are presently cost centres anyway, so trying to place a financial price on the social media elements may be inappropriate.

These are still early days in the growth of this 21st century communications revolution. Outside the US and a handful of other countries, the commercial impact of social media has not yet been substantial. But it will come, just as surely as their international airlines fly in the same skies.

And chances are it will happen much faster than experts predict. After all, no one predicted that, in less than seven years, Facebook would progress from a university dorm dating concept to embracing nearly one person in every 10 on the planet – and it has barely touched India or China yet! Twitter and Facebook have enabled regime change. Google has become a verb. Fads they may be. But the world is different today as a result. Consumers have become greatly empowered and the breadth of impact of social media will only grow, accelerating as the numbers explode.