Welcome to the second installment of my visit with United’s management in Chicago. I know you’ve been sitting on the edge of your seats, waiting to hear the rest of my conversation with Scott Wilson, VP eCommerce and Merchandising, so let’s get right into it. (See Part 1, Part 3, Part 4)
[Disclosure: United paid for my flights and hotel]
Unbundling and Rebundling Again
Scott and I moved past change fees and started talking about fees for other services. He shared something that might surprise you. Excluding bag and change fees, those people who pay for ancillary services have higher satisfaction ratings. That shouldn’t actually be a surprise because they’re paying for what they want and getting something better than the base offering, but it doesn’t seem intuitive at first blush.
With that in mind, will United be looking at additional products and services to sell? Yes, of course. Will United also look at branded fares like Air Canada or, more recently, American? Yes again. Scott showed me a little demo of the new United.com which should debut early next year. (I’m afraid I don’t have images I can share on that.) There is a placeholder for fare bundles, but United actually wants to offer dynamic bundling. For example, if you’re an elite, you won’t be offered a bundle with bag fees or Economy Plus because you already get those things. For non-elites, however, you can most likely expect to see Economy Plus and baggage offered in a bundle. Why? Because apparently there is very little overlap between those who buy Economy Plus and those who check bags today. Another interesting little factoid.
A Much-Needed Change to United.com
The new website looks really fantastic from the demo I saw. (For those at investor day, it’s the same thing they showed there.) The look and feel is consistent with what we’ve seen from the apps, and that’s by design. The experience across platforms and apps should be similar.
I like the filtering options they’re putting together. Today, United (like many other airlines) gets a ton of results and then picks the top handful to display based on the initial search criteria, discarding the other options. On the new website, United will hold on to all options. When you adjust your filters, it will go back into the full result set to return the best options. And filters can get incredibly in-depth. That means better, more tailored results. Huzzah.
With the new website, United will be able to do a lot more of what it wants with ancillary services, and that’s good because the airline’s big investor plan puts a lot of faith in merchandising to increase revenues. A piece of that means more variable pricing for ancillary services instead of just having a flat fee. They’re doing it already with Economy Plus on a seat-by-seat basis today and it will likely spread elsewhere.
They’ll also continue looking to add new ancillary products. One that was “purely hypothetical,” Scott said, was the possibility of paying a reduced amount in advance to avoid a change fee. That’s what American does with its branded fares today (though I really have to question the pricepoints that American uses).
Mobile App Awesomeness
Before I left, we talked a little about apps. The new iPhone app is excellent in keeping the most important information right on the homescreen. I’m not an Apple guy, so I have to wait until early January when the Android version comes out to use it myself. (Apparently 75 percent of United’s downloads and 85 percent of usage comes from Apple products, and it worked so well that they were able to move up the release for Apple.) But even the previous version of the app has been wildly successful with a high percentage of repeated use.
As with Praveen, my meeting with Scott also ran long (they really should have scheduled more time), so I had only a few minutes to talk to Mark Krolick, Managing Director of Marketing and Product Development.
Flying the Friendly Skies, Part 1
Mark’s office was full of references to the rebirth of the Friendly Skies campaign, so that’s where I started my line of questions. In particular, I wanted to know why he thought the time was right.
Mark said that customer satisfaction scores had been rising consistently, and the operation had improved. (There’s no doubt the latter was at least a partial cause of the former.) From United’s perspective, things were running well and it was time to talk about it. They “had all the proof points. Now it was time to convince people.”
I focused in on the part of the campaign that talks about wifi onboard. Since United had only 130 airplanes out of its much larger fleet equipped at the time of our meeting, didn’t that seem to overpromise? Mark didn’t seem surprised by that question and indeed, they had considered it. They decided that it was still a good claim to make but they had to be careful.
In the voiceover, it says they “are installing” and not that it’s out there. (Whether people will differentiate between the two statements remains to be seen.) But United also wanted to make sure people knew that it was making a significant investment in wifi, and the team didn’t want to let competitors get all the credit for installing wifi when those competitors would have an inferior product.
The Promise to Coach Passengers
I asked Mark what they want to promise to people flying coach. What’s the product message they want to convey? In inflight entertainment for short haul, the promise is that there will be wifi plus some sort of entertainment, usually streaming video through your own device domestically and in-seat video on long haul (in addition to streaming). Today that’s the product offered on the A319/A320/747 fleets. Most of the 737s will have Live TV onboard but not all. The remainder will have streaming video and I’m not sure that you’ll be able to know in advance or not what your airplane will have.
I asked specifically about power, and he said that power is being installed in much of the fleet. Even the 747s have now been slated for power. That’s incredibly important for airplanes that go long haul. But it won’t be on the whole fleet. Some airplanes will have it in some seats and not others. It may be tough to reliably know if you’ll have power.
Beyond inflight entertainment, what else is in the promise? They say they’ll have the best food for sale and they’ll offer the usual basics that every airline wants to offer — safe, clean, and reliable transportation.
After these conversations, it was time to get dorky. (I’m well aware that 95 percent of the population thinks this got dorky the second I walked off the elevator.) At my request, I was given some time with Brian Znotins, VP of Network for United. But that discussion will wait for a special Wednesday post tomorrow.
To bad no news on How any of the fleet will Have Ch-9 if they keep putting streaming and Wifi in like they are doing to the 320/319 fleet and Jeff said it was going to stay at this point I just do not know anymore
If you have wifi, you have at least access to liveatc.net. Not quite the same, but at least you get takeoff and landing.
Henry – Can’t use wifi below 10,000 ft on United. At least not yet.
I’m curious when they’ll move that 10,000 limit. From a purely technological perspective one would think they’d be able to get coverage at 5,000 or 8,000 feet. I’d be curious to know what Gogo’s testing shows as the minimum viable altitude for Wifi..
“Huzzah”….I feel like I’m watching The Big Bang Theory…..lol
So just how many VP’s of some made up name does United have?
That question will be answered in a very, VERY special post on Friday when Cranky speaks with the Managing Director and Senior Executive Vice President of Human Capital Title and Branding Marketing. Right, Cranky? ;)
David – There are a lot of VPs. I couldn’t believe when I saw the chain on some of these. I believe Praveen Sharma (VP Loyalty and Business Development) reports to Tom O’Toole (SVP Marketing and Loyalty and President Mileage Plus) who reports to Jeff Foland (EVP Marketing, Tech, and Strategy) who reports to either Jim Compton (Vice Chairman and Chief Revenue Officer) or Jeff Smisek (President and CEO).
And then there are there directors below Praveen Sharma? I know airlines by their nature have to have a few more layers of management, but some of this is damn insane. I think the worry here is folks spend so much time talking inside they forget to get outside of the damn building.
That much is abundantly clear!
This helpful if you like to know which United plane you are on, usually you can see the plane number/flight status 72 hours in advance at united.com:
Stop it you’re making me laugh too hard… OMG a
day in never never land….Did you go to Church
to cleanse your soul after those meetings ?
United makes anybody
and everybody a VP just like the fake
ones in the Banks. Now back to reality…..
This is my Last year as a 1 K ; as the new
Money spent restrictions are just another
way to thin the herd of elites…
Food…. Oh boy I totally avoid the Breakfasts
as they have been the same thing in first class
for years…. Some of the lunch meals are OK
and Dinners are for the most part not rejected..
WiFi and power source has been a very good addition.
Friendly skies… Say What ? did anybody tell
the employees that by chance ?
The employees have been screwed over so much
they just do their 7-8 hours and get out of Dodge.
Most Airlines new motto should be
“Judge Bring your Wallets” We will lighten the load..!!
I agree with you complete, Rich. I have one more trip already booked on UA, and for 2014 I am taking my status elsewhere. I’ve been loyal to CO (then UA) for 20 years last month. It was hard to finally decide I’ve had enough being treated poorly for going out of my way to choose them (they don’t even fly out of my home airport).
What about the onerous point of having to pay for an alcoholic drink (wine, g&t etc) on International flights, when just about every airline (that I have flown on) they are free!
“Dorky”? Do you know who your readers are? “Dorky” is our middle names!
Air Philippines, a division of Philippine Airlines, offers different fare classes based on how much luggage you think you will bring, 10, 20, or 26 kilos on their short haul flights. If you go over, they charge you an arm and a leg (sometimes a foot too). This does allow you to save money by predicting what you will bring and allow them to try to predict how much cargo they can sell to put on these smaller planes.
I think the last place United (or any other airline) should go for ancillary revenue (or “provide added value to customers” in United-Speak) is the deep, dark world of predict your future pricing. Pay a little more for checked bags at purchase, but if you are wrong, pay a whole lot more at the gate like Spririt.
Fees and fare structures should be simple for things that people can understand and compare across airlines. Unpredictable items are annoying and will cause problems in the future. People will get fed up at some point with arcane policies like: pay a purchase fee unless you come to the airport to purchase your ticket in cash, but then pay a fee because you didn’t print out your boarding pass at home before you came to the airport to purchase your ticket !?!?
the willis tower must be filled with unicorns, four leaf clovers and magic pixie dust because each one of these myriad ineffectual vice presidents is delusional bordering on psychotic. the only othe rational explanation is that each of them must do a great job of convincing the others about what a bang-up job they are doing. the friendly skies ad campaign is so insulting to so many people because there is nothing remotely friendly about most of their employees, in-air service, elite programs, frequent flyer redemption policies, fees, pricing, etc. gershwin should sue for defamation.
put another way – united won the race to the bottom by a mile. the fact that they are self congratulatory when a few things improved only marginally, with “improvement” defined as going from abysmal to merely lurid, tells you everything you need to know about this pathologically delusional cast of characters.
i know he can’t say this but, if i were him, page one of the cranky concierge instruction manual would say something like “united? book away, book far far away”
That’s stark language there in Bill’s post, but I’d agree in general. Mark Krolick does come across as either delusional (terrible character trait if you are in a role of responsibility in senior management), or, well, as too ‘slick’ for my tastes: “[..] From United’s perspective, things were running well and it was time to talk about it. [..] it was time to convince people.” On the upside, if Mark is getting ‘retired’ soon when Smisek sacrifices another pawn, he’s got future in politics. Mitt Romney was absolutely convinced he’d be the next PotUS, right up until the first tally was published.
While I admire the enthusiasm of good people like Praveen and Scott, it does beg the question of focus at the top. Is it wise to toy with intricate and highly complicated schemes to extract ever last $$ out of each paying customer, if they still can’t assure a plane gets from A to B on time, with the assigned seats, working interiors and friendly, accommodating crews? Maybe sort out the basics first? Otherwise their won’t be many customers left to gouge. I’m not flying them anymore. Not last part of this year, not next, and I can’t think why that should change.
Amen. That’s exactly what I meant… only with 90% less snark. Kudos!
Cranky, does the new UA website still allow one to do a search via the calendar of lowest fares and specify a booking class and the number of days for the trip? For example, one can currently do a search LAX-LHR, specify 7 days. and W fare class.
chitownflyer – The demo I saw was only a video of functionality so I couldn’t actually play with it and see full detail.
I think IFE is a point where United could really shine. For example, my wife and I just flew from IAD to HNL. On the way there we had my ipad with 20+ movies loaded, a headphone splitter so we both could watch and hear. This was critical since all UA had was the same movies we saw previously on a separate flight. On the return we had the individual IFE systems with a zillion movies to choose from. Fantastic!
Its sad that the passenger has no idea what kind of IFE (if any) they will have, if there will be power, etc. I so over prepare for a long flight that I am excited when I get what seems standard on other airlines.
I think we will find that the streaming service is the wrong way to go. If I have to pay and there are any glitches, I want a full refund. If my movie stops and stutters I will want a refund. The problem with charging ancillary services is any service below acceptable standards will result in refund requests or refusal to use that service in the future.
One correction – I’ve recently discovered that UA’s longhaul international 747-400s do NOT have in-seat entertainment – which is ridiculous for those of living in Australia/New Zealand who make the long 12-14 hour flight to California, in coach.
How does united with arguably the worst product in the industry get off on charging fares today of up to $3300 first class with stops SFO to Tampa. FYI delta is $650.
A year later and this website still hasn’t appeared. United continues to have the worst website of any US carrier….