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.
