Wednesday, April 20, 2016

Allegiant Air softens image as it moves into larger markets

Allegiant Air McDonnell Douglas MD-83 (53469/2116) N876GA holds short of Rwy 30 at Long Beach Airport (LGB/KLGB) on October 26, 2011.
(Photo by Michael Carter)

Las Vegas-based Allegiant Air is increasing its marketing budget and investing more in customer service as it moves into larger markets, such as Pittsburgh, Cincinnati, Baltimore and Memphis, executives said in a briefing at the carrier’s headquarters.

Five years ago, Allegiant’s marketing strategy was simple. It would start a new leisure-focused route from a place like Casper, Wyoming, and perhaps spend $25,000 to tell local residents about it. Consumers would be so excited about any air service that they would book flights. It did not matter that Allegiant would launch only two weekly flights, or that passengers would have to adjust their schedule to match the carrier’s service pattern.

“Just by us showing up, it was news enough to get the word out,” COO Jude Bricker said.

But a couple of years ago, the airline’s network team realized it was running out of logical small-market routes. The team suspected Allegiant’s low-fare, leisure-focused network would translate into larger markets, as long as customers learned about Allegiant’s value.

But Allegiant’s senior executives knew they would start from scratch in markets where customers had options. They feared they might not be successful.

“We were always concerned that without the advantage of GDS [global distribution system] distribution, we would have a really hard time building up customer awareness,” Bricker said. “What we found out was that the product is well received in these communities.”

Winning new customers

The new markets “build more slowly,” Bricker explained, but most have been successful. The airline’s upcoming growth will occur mostly in larger markets. “We found a new pot of gold with these middle markets,” CEO Maury Gallagher said. “Five years ago, we would have told you we would never go there.”

As Allegiant entered larger cities, it has used a multi-pronged strategy to win new travelers.

• First, it spent more on advertising, adding national commercials mainly targeted to women, who are believed to control their families’ budgets.

• Second, it focused on customer service, adding a 24/7 call center, updating its website, increasing its customer care team 22% and adding a post-travel survey for passengers.

• Third, it simplified how it marketed itself. Allegiant’s official name is “Allegiant Travel Co.,” and at times it has taken that moniker seriously, expending a considerable effort selling vacation packages. But in the new, larger markets, Allegiant is advertising itself as an airline.

“Introducing ourselves as ‘Allegiant Travel’ was causing confusion,” among consumers, Allegiant VP-marketing and sales Brian Davis noted.

Just as in smaller markets, the bulk of Allegiant’s passengers are families traveling on the occasional vacation to popular spots like Las Vegas and Orlando, Florida. But being in larger cities has allowed Allegiant to carry different demographics, Davis said.

Now, Allegiant’s fastest-growing segment is younger people with disposable income and an appetite for travel. Davis calls this group “Erica and Brian.” The segment, he said, accounts for 15% of Allegiant’s business. “The key to understanding ‘Erica and Brian’ is that . . . they will watch prices and when the price is right they will spontaneously take a trip,” Davis added. “[They will say,] ‘We’ve never been to Austin. Let’s go spend the weekend.’”

(Brian Sumers - ATWOnline News)

No comments: