April 13, 2016

Maximizing Yield

The airlines have certainly figured out the formula to increase Merchandise Productivity, haven't they?

Take my flight back from Boston a few weeks ago. A standard economy seat cost just $150. Cheap!

But there were opportunities to improve the experience.

For just $83, I could increase the amount of space between my seat and the seat in front of me. I'll take it!! And look how much additional leg room you get for $83:

I mean, imagine if I didn't pay for additional leg room ... then what?

Look at how spacious and luxurious my world was, for just $83.

That's an elbow in my ribs ... you get that as part of the $83 upgrade. Fortunately, the flight only lasted six hours, so we're not talking about prolonged discomfort.

For $31, I could purchase early boarding - allowing me to get my one piece of luggage overhead before the masses consumed all available space. I didn't pay $31, and that was my loss. Because I was in Seating Group 29, the overhead bins were full by the time I got to board. My luggage was checked ... free (#thanks) ... and when I got to my seat, of course, there was plenty of space in the overhead bin for my luggage (#poorcommunication).

Food cost $8, assuming you wanted to eat during the flight.

There are many ways to manage the Merchandise Productivity process. Take McDonalds, for instance. They offered a limited breakfast menu all day long, and their sales increased by five percent. Customers were happy. And customers didn't have to pay more.

Then we have the airline in question above. Fees on top of fees on top of fees. The customer pays more, and is rewarded with a less-than-optimal experience. I know, the Optimization folks (formally known as the CRM folks before that term became a four-letter word) love the $150 flight and $83 seat upgrade and $31 early boarding opportunity. 

It's important that the customer enjoys the experience as well.

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