United Airlines announced last week a new cheap fare that does not allow ticket holders to carry on any luggage. Their reasoning is they want to attract customers who are now attracted to the ultra low fare airlines like Spirit.
Check out at this link a great article by Benjamin Zhang at Business Insider regarding United Airlines’ announcement.
Let me call United’s decision what I believe it is… STUPID!
United is trying to attract a segment of the flying public they feel they aren’t attracting now. On the surface it sounds logical, but what they’ve done now is take their basic product and segment it enough to attract everyone.
The idea is stupid, because for the increased revenue they might get, they are willing to put all of their other revenue at risk. We maximize our opportunities when we do what we do best and that means not trying to do it all.
Spirit Airlines, an ultra-low fare airline, is able to execute their “no carry on” type of ticket, but that’s because they don’t try to also cater to other classes of flyers. Spirit knows what it does best and sticks to it.
I don’t see Walmart trying to go after the Nordstrom customer base. They know it simply would not work and ultimately would be unprofitable.
We maximize product when we know who our customer is and stick to taking care of them in the best possible manner. Yes, this is what Walmart does, and it is what Nordstrom’s does too.
How this concept is lost on somebody like United Airlines blows me away. Yes they can do whatever they want, but I’ll say they are risking their core business. They are thinking they can add a couple of pennies to the bottom line, but fail to realize they risk the dollars they already have.
P.S. As one who has logged more than 2 million actual air miles, I’ll admit this idea by United turns me off to them even more. But that’s OK. They were already my flight of last resort.
Copyright 2016, Mark Hunter “The Sales Hunter.” Sales Motivation Blog. Mark Hunter is the author of High-Profit Selling: Win the Sale Without Compromising on Price and High-Profit Prospecting: Powerful Strategies to Find the Best Leads and Drive Breakthrough Sales Results.