Fox News vs Spirit Airlines

[Bryce]

Fox News has been waging a small war against Spirit Airlines over the airlines' refusal to refund the cost of a man's airline ticket. The 76 year old man, Jerry Meekins, is dying of cancer and was once a Marine. He made his grievance public several days ago and Fox News went to battle for him. I find this remarkable not over the 'victim' being referred to as a Marine or dying or elderly but in the airlines' steadfast refusal to issue him a refund. And I am not, in any way, being shocking or sarcastic: I think it's rational. It feels good (not his ailment). Good for Spirit Airlines and to hell with the idiots.

Spirit CEO Ben Baldanza:

“A lot of our customers buy that insurance and what Mr. Meekins asked us to do was essentially give him the benefit of that insurance when he didn’t purchase the insurance,” Baldanza said. “Had we done that, I think it really would’ve been cheating all the people who actually bought the insurance … and I think that’s fundamentally unfair.”

Now that's a man who knows the definition of fairness. And after being asked again about giving him a refund, the company (if I remember an earlier article correctly) said "No." Just no! I think the practical solution was to issue a refund. But practicality doesn't equal right and I think the company would rather be right than politically correct. Further down the article are a couple unrelated gems:

“Please respond, Pasquale, but we owe him nothing as far as I’m concerned," the email read. "Let him tell the world how bad we are. He’s never flown before with us anyway and will be back when we save him a penny.”

Asked by a reporter last month from FlightGlobal.com if the airline’s additional domestic routes versus international locales are a sign of what’s to come, Baldanza replied: “Our strategy is simpler than that. Our strategy is to make money.”

I wish my employer had this kind of tenacity.

There are a few more articles on this man on foxnews.com.

[Bryce]

I was just searching for that "No" comment and came across this:

http://www.ksee24.co...-149077895.html

So Meekins stood outside Tampa International Airport on Tuesday with signs that say "Corporate greed is spelled Spirit Airlines" and "Spirit Airlines tells dying man no refund."

"I'm hoping I can cost them $20,000, $30,000, $40,000 in revenue for that lousy $197 and no compassion, that's the important word," Meekins said.

What a hero.

[Michael Stuart Kelly]

Spirit has a great attitude about making money, but a crappy public image attitude.

This thing was so easy to handle, it's painful.

Spirit could have easily told the dying serviceman that it does not issue refunds for the way he bought his ticket and there is a a no-exception company policy, but given his state and the fact that he can't fly, Spirit wants to do something.

So it can make donations. Spirit would donate a couple of hundred dollars to the guy (maybe in a Wallmart card or something like that so it would not look like a refund), or maybe hire a car with driver to take him where he wanted to go or whatever, and donate a parallel amount to the Wounded Warriors Foundation or some similar charity for ex-military people.

Then Spirit could make a PR campaign out of it ("We care about our customers and go the extra mile when things go bad") and get endorsements and praise from celebrities for the kind act. This would be all over the news for a while.

The buzz alone would be more than worth it in increasing and/or maintaining paying customers. I would wager Spirit would get a spike in traffic for a while. Even if that only lasted for the duration of the PR buzz, money-wise, it would be a great investment.

The way this thing is playing out, Spirit could actually lose money by projecting an image that it doesn't give a damn about its customers if something goes off-script. When customers think you don't give a damn about them once you have their money, they will tend to seek producers who do, even if they have to pay more for it.

That's the essence of why marketing exists.

Michael

[Selene]

The way this thing is playing out, Spirit could actually lose money by projecting an image that it doesn't give a damn about its customers if something goes off-script. When customers think you don't give a damn about them once you have their money, they will tend to seek producers who do, even if they have to pay more for it.

That's the essence of why marketing exists.

Michael

Michael:

Extremely poor decision making internally.

Another exposure that they have is from the regulatory statists. You can be sure that someone in the psychotic O'biwan administration is licking their bloodstained chops with another chance to slam big air.

Adam

Post Script:

Since Romney is going to be accused of politicizing every action from here to the election, I would have him announce that he is going to do what Spirit should have done a la your suggestion Michael.

Additionally, I would use this to make a speech about reawakening the civil society where all Americans support each other as best we can.

[Bryce]

The way this thing is playing out, Spirit could actually lose money by projecting an image that it doesn't give a damn about its customers if something goes off-script. When customers think you don't give a damn about them once you have their money, they will tend to seek producers who do, even if they have to pay more for it. That's the essence of why marketing exists. Michael

I bet they know it. I got the impression that they don't want to capitulate. I wouldn't. I don't (sometimes, but not usually). Besides, the airline didn't cause the bad press. Fox News, a spiteful old man, and the idiots who support them are doing a smear job. What is Spirit Airlines doing? Fulfilling its contract.

My point is that the long term benefits of defending a rational position outweigh the short term publicity or profit loss.

[Dglgmut]

The way this thing is playing out, Spirit could actually lose money by projecting an image that it doesn't give a damn about its customers if something goes off-script. When customers think you don't give a damn about them once you have their money, they will tend to seek producers who do, even if they have to pay more for it.

I don't get it... This could have been a scene from Atlas Shrugged, why are you criticizing these actions? So they don't care what people think of them as long as they provide the service they're paid to... what's so bad about that?

I agree with the OP, I wish every business was run with this mentality.

[anthony]

Yes, I also read a AS moment into this - and there isn't a corporation existent today

that doesn't pay careful attention to the PR consequences of their actions. (I've been involved with publicity campaigns.)

Point is, isn't it this sense of entitlement that got us into the statist mess?

From government to Big Business, everyone's expecting something they do not deserve.

If being an ex-serviceman, and having a fatal illness, merit one to special treatment, there'd be endless lines at supermarkets, and so on.

It's an unpopular but principled stand Spirit are taking, and the 8/10 respondents who denigrate it, would perhaps be upset if it - a low cost carrier - went out of business, leaving them only more expensive options of air travel. Just pc outrage and hypocrisy.

Demanded charity is a slight contradiction in terms.

[merjet]

I believe a $100 voucher towards a future flight would have been better spent by Spirit than $100 on advertising.

[Michael Stuart Kelly]

Besides, the airline didn't cause the bad press. Fox News, a spiteful old man, and the idiots who support them are doing a smear job. What is Spirit Airlines doing? Fulfilling its contract.

Bryce,

This is a common problem with people attracted to Objectivism--they confuse competence at producing with competence at selling. They take a commodity approach to things that are not commodities.

And they invent scapegoats to prove it when things go sour. Yeah, Fox is probably hammering the Spirit no refund story too much, but if not Fox, than another news outfit could easily pick it up. Besides, if people don't like Fox's message, they can simply change the channel. Isn't that the free-market way? Freedom of speech and freedom of choice and all?

But I want to get back to commoditizing as a marketing approach. This is the worst approach possible, but it is the only one many people in our subculture understand. (They're only used to looking at this from the perspective of the producer, not the seller.)

For instance, we all have to eat. So if you are selling beans to a population that eats beans, qua commodity, you try to provide the best bean for the cheapest price until you reach a limit of viability. With stiff competition, meaning lots of competitors all doing the same, you can count on low profits.

But it's worse. Think about this. After a certain point, you can't really improve on a bean. And after a certain point on lowering prices, you go out of business. People just don't think much about beans (so you have to do it for them and get them to come along). The way most people think, the beans are either good or poor. They're just beans, after all.

Thus, a bad approach would be, "Yum! Blowhard Beans are so much better because they are always fresh, more nutritious, and at such a low price they are easy on your pocketbook."

I seriously doubt this message would influence anyone's buying behavior one way or another. Beans are beans and nobody pays attention to the writing. Besides, all the competitors are basically saying the same thing.

Now, let's push some marketing buttons and see what happens. I'll limit myself to the Cialdini six. so let's look at authority, liking, consistency, reciprocity, social proof and scarcity. This won't be the greatest marketing message since I'm doing it off the top of my head, but I'm sure you will see the difference.

First, you hone in on housewives as your demographic target. (You have done some studies and surveys along these lines, right?) But your main problem is you want to charge double the price others are charging. Now see how this plays. (If you imagine it with pictures and all jazzed up, it becomes even more powerful.)

It's a little tongue in cheek and the transitions are clunky because I started getting bored writing it.

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See?

Price is not really an issue. Hell, I didn't even talk about taste. And there are oodles more marketing triggers to pull.

If you get the marketing right, you can charge a ton-load more and people buy. If you get the marketing wrong, often you can't even give away a good product.

Rand didn't help much in her writing with understanding marketing and putting the customer first, but she did acknowledge this early in her fiction (in The Fountainhead) with Henry Cameron's administrative assistant. Once that "self-effacing" but iron-willed man left (or died--I don't remember correctly and don't have time to look it up), Cameron lost all his customers.

(Incidentally, Rand was pretty good at marketing herself. She just never talked about it. One day I am going to serve up a lot of examples with explanations.)

Selling 101 says that--in addition to a good product--people have to know you, like you and trust you for you to become successful at selling. You might sell some stuff by offering a superior product for a cheaper price while being indifferent or hostile to your customers, but if your reputation tanks past a certain level, you will not be in business for the long haul (without, of course, government help and favorable regulatory laws that strangle your competitors).

People in O-Land often oversimplify things and treat good marketing as Peter Keating second-hander stuff. The truth is, it can be, but it doesn't have to be. Marketing is a learned skill just like any other. A top-notch marketer has every reason on earth to be proud of what he does.

In fact, I'll go you further. If not for in-depth marketing where people are induced to "become aware" of problems they didn't even know they had, we wouldn't have nearly the amount of produced wealth in the world that we currently enjoy.

Think about the following for a real quick real-life example. What's the difference between a normal mp3 player and an iPod?

Better product for cheaper price?

Heh.

It was the marketing. In fact, the whole design and concept came from marketing studies.

Michael

[Bryce]

I get it. Fox News is the leverage certain authors or editors are using to punish Spirit Airlines. I don't think that the powers at be at Fox News give two shits about that guy. They're using it to make money because that's what sells.

So I think we're talking about Gail Wynand. To quote Wikipedia:

While Wynand shares many of the character qualities of Roark, his success is dependent upon his ability to pander to public opinion, a flaw which eventually leads to his downfall.

Now consider Apple. Thinking of that quotation, do you see the similarities between Wynand and Apple? Apple doesn't make particularly good product. Apple products are expensive and not as feature-packed and/or advanced (particularly iPhones) as their competition. But Apple makes a lot of money because their marketing is ****ing great because their marketers know how to pander.

People in O-Land often oversimplify things and treat good marketing as Peter Keating second-hander stuff. The truth is, it can be, but it doesn't have to be. Marketing is a learned skill just like any other. A top-notch marketer has every reason on earth to be proud of what he does.

I don't have a problem with that... sometimes. I'm conflicted because I often think of humans as resources rather than rational beings. I could (theoretically) exploit the exploitable and deal rationally with the rational. But can you blame me for thinking that way? Some go to great lengths to prove to me how irrational they are, so sometimes I just can't help it. But the rest of the time I think about how idiots stop being idiots when no one lets them act idiotic.

What do you think marketing would look like in a mystical fantasy land where every human acts as rational as he can? I think it would look like it did before Bernays: dull.

I'm very interested in the psychology of marketing and salesmanship so I'm going to research "Cialdini six."

[Bryce]

Spirit bows to pressure: Airline CEO to refund dying veteran's fare

Dying Vietnam veteran Jerry Meekins is getting his money back from Spirit Airlines' tightfisted boss after all.

After a week of criticism from veterans around the nation, Spirit CEO Ben Baldanza issued a statement Friday afternoon saying he would personally refund Meekins' $197 airfare, and that the discount carrier would make a $5,000 donation to the Wounded Warrior Project.

"He called me personally, and I'm going to take him at his word," Meekins told FoxNews.com. "He was apologetic and said he'd made a mistake."

The move was a sharp reversal for Baldanza, who as recently as Thursday had stubbornly refused to refund the cancer-stricken Marine's money, even though Meekins' doctor told him he could not fly.

"Sometimes we make mistakes," Baldanza said. "In my statements regarding Mr. Meekins’ request for a refund, I failed to explain why our policy on refunds makes Spirit Airlines the only affordable choice for so many travelers, and I did not demonstrate the respect or the compassion that I should have, given his medical condition and his service to our country.

http://www.foxnews.c...dying-vet-fare/

Heh. Serves me right for speaking too soon...

[Selene]

Bryce:

Don't be so hard on yourself. I think the owner used good common sense and he was very open about how he came to his decision.

Business is a process. The customer may not always be right, but sometime they are and this was one of them.

Adam

[anthony]

Mmm: back-down. We might have guessed.

Then they should've just paid this fellow out in the first place, quietly, without fanfare.

That'd been of more integrity than bowing to pressure like this.

There are times I don't like Public Relations much.

Never mind Spirit's contribution to the economy, the hefty taxes they pay, their employment of thousands of personnel, or their service to millions offering value for money - what counts is they also have to show the public they are a corporation with a heart of gold.

[Michael Stuart Kelly]

Bryce,

Marketing is not pandering.

That's a gross oversimplification.

Put it this way. Suppose you have fond memories of a time in your life when you drove around in a vintage Mustang with someone you loved but who has passed away. Now suppose you come across a vintage Mustang in near-perfect condition, displayed to evoke that bygone era and push all the buttons of someone like you, but the price is $75,000.

You gladly pay it.

However, later someone else finds out that the seller got it for a couple of thousand dollars and put in, say, 4K on overhauling it and 4k on displaying it all jazzed up to target people like you. Now suppose that very person accuses the seller of "pandering" to you just to get your money (10k to 75k is one hell of a markup) and implies the seller is exploiting you. And he claims you can get a much, much better car--a new one--for 75k.

Are you interested?

Hell no.

You can get a new 75k car any day of the week.

That vintage Mustang brings back memories that no money on earth could buy. And the one you bought runs well to boot.

In my view, in this scenario, the seller served the buyer in the best manner possible--and got paid well for it, as he should. Both seller and buyer are enormously satisfied.

Apple does something similar.

(btw - Apple has great products. But in technical terms, they are fundamentally no better or worse than their top competitors.)

Pandering would be when you replace quality with marketing (instead of adding marketing to quality) and sell any old crap hyped up to suit a profile--or change fundamental principles frequently depending on the person you are addressing. Pandering is sleaze. It's trying to fool customers whereas marketing is trying to serve customers in a manner best suited to their profiles (thus best suited to their interests).

(Dishonest marketing does become pandering, but good marketing rocks with solid constant win-win for all.)

The best way I think about this is like a Venn diagram with two circles. The left circle represents the interests and principles of the seller. The right circle represents the interests and principles of the buyer. A seller with integrity and marketing competence focuses his efforts on the overlap of the circles where the interests and principles are the same for both.

So the seller's preparatory work is to study his customer and study himself.

The larger he can make the overlap--i.e., the more in common he can identify between himself and the customer--and the more the seller makes efforts to include as much of that overlap in his approach:

1. The more the seller is going to bond with the buyer,

2. The better the seller will serve the buyer, and ultimately

3. The more products the seller will sell to the buyer.

And on the buyer's end, the more the buyer is going to feel satisfied with the business.

People buy experiences with their products. That's just the way humans are. So give them a good experience--one they want and find valuable--along with the product. If you give them a bad experience or no experience at all, they will find someone who will give them what they want and buy from that person. That's the way the free market works.

Understanding this reality does not compromise your integrity in any manner whatsoever. On the contrary, a seller of high integrity will serve his customer well--with greatness in both product and experience--and charge good money for it. He knows that providing a great experience is something his customer values a lot, even when the customer is not consciously aware of it.

Some people feel that providing experiences the buyer is not conscious of is manipulative. It can be (or not). but fundamentally, how is that any different from providing a great product that is built with a lot of details the buyer is not consciously aware of?

I will get to this later on and give you some information and some places you can check out to learn more about this stuff if you are interested.

Michael

[Dglgmut]

Michael, I'm starting to agree with you. However, the aim of marketing today seems to be to exploit impulsiveness or to fit a company into an image most acceptable to the public.

They say there is no key to success, only a key to failure: Try to please everyone. The marketing trends of today show complete disregard for this advice.

Impulsiveness is punished and hopefully learned from in an economically free society, but when everyone is economically connected by the government's control of the money supply and wealth redistribution an individual's mistake is everyone's misfortune...