Archive for the ‘Mktg – Revenue Mgnt’ Category

Gotcha: Now, even Southwest is charging for “luv”

January 4, 2013

I used to be a big Southwest fan.

image

I used to perversely enjoy watching the clock tick so I could get in the “A” boarding group by hitting the enter button exactly 24 hours before flight time.

Then the jabrones at SWA  took the fun out of the process by letting online slackers buy their way into the A group for 10 bucks … an “early bird” check-in.

Worse still, when my friends would flaunt their AMEX black cards, I’d charge everything to my SWA-Visa … earning a free flight for only a gazillion “flight legs”.

Then, the SWA  jabrones changed their credit card program … making it less lucrative and way more confusing.

(more…)

Filling movie theater seats … at a discount, of course.

November 21, 2012

DealFlicks.com offers movie goers lower prices for to fill seats that would otherwise go unused.

image

Similar to the old Priceline hotel model, users select their neighborhood, movie and showing time, and once they’ve paid, the location of the theater is revealed.

Discounts range between an average of 40 and 60 percent off typical ticket prices.

Users can also take advantage of Super Deals – offering the greatest discounts – when they enter two possible screening times and allow DealFlicks to choose which one they see.

Fexible consumers benefit with large discounts.

Theaters benefit by selling more seats (and popcorn).

Source

Thanks to MC for feed the lead.
* * * * *
Follow on Twitter @KenHoma

Remember when getting upgraded to a bigger rental car was, well, an upgrade?

March 13, 2009

Excerpted from Direct, “Thrifty Marketing for Thrifty Times: A Car rental case history” By Ken Magill, Dec 1, 2008

* * * * *

When gas prices skyrocketed this summer, Dollar Thrifty Automotive Group — along with the rest of the car-rental industry — faced a tough marketing challenge: What to do when customers’ demand for economy cars soars and the fleet simply isn’t built to meet that demand.

“Consumer behavior has really changed a lot for us with high gas prices,” says Chris Payne of Dollar Thrifty … “There are road warriors who like to get the best deal they can. [Before gas prices went up] they would reserve a smaller car than they really needed knowing we’d probably sell out and they’d get a bigger car at no extra cost. Now people are saying, ‘Wait a minute — I reserved a smaller car and you want to give me that gas guzzler? Forget it, I don’t want it.’ Four-dollar gas definitely was a tipping point.”

As a result, the company found itself in a rough spot. “You just can’t change your fleet overnight … It’s the same issue the manufacturers have had, where for a while Detroit was pumping out all these SUVs and minivans and everybody thought bigger was better.” Moreover, he says, the cost of cars to rental companies has gone way up, so these firms have been forced to keep their vehicles longer, making fleet changes even more difficult.

“Think about running a business where the cost of your commodity has gone up by 50% twice in the last two years … All the companies have been holding on to cars for from 12 to 14 months. It used to be we’d hold on to them for about nine …”

To overcome the challenge, Dollar Thrifty began running regular e-mail promotions on larger and luxury vehicles … the company’s two brands — Thrifty Car Rental and Dollar Rent a Car — have 1.8 million and 1.3 million opted-in e-mail subscribers, respectively … The average opt-out rate for a Dollar Thrifty mailing is .12% — “which is amazingly low … we’re reaching a very targeted audience … ” Also, he says, the average mailing generates most of its activity within 72 hours and brings in over $1 million in revenue.

“Dollar Thrifty is a perfect example of a company that’s built a successful permission-based marketing program … By providing subscribers with content that’s directly relevant and valuable to them, Dollar Thrifty is able to increase revenue while keeping opt-outs incredibly low” … 

Dollar Thrifty also created a chart to be given to customers at rental counters. With it, customers can cross-reference the gas consumption of smaller vehicles against larger ones and figure out how much more they’d end up spending on an upgrade.

“What we’ve found is that consumers’ perceptions are way out of whack on the gas thing … families of five are showing up having rented an economy car because it was the best price they could find online … They’re forgoing comfort to save a few bucks, but they’re not saving as much as they think. In some cases, they’re literally spending a dollar or two more for the entire rental.”

Anecdotally at least, Payne says the program is working … As of this writing in October when gas prices had dropped, Dollar Thrifty customers remained cost conscious and the chart was still being used.

“It’s still helpful,” Payne says. “People are getting hit in a lot of areas and anything they can do to cut costs, they’ll do …”

Edit by SAC

* * * * *
Full Article:
http://directmag.com/email/1201-thrifty-email-promotions/

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Revenue Management: Dark Skies Ahead for Airlines

February 23, 2009

Excerpted from WSJ, “After Rough Year, Airlines Bet on More Fees, Lower Fuel Costs” By Susan Carey, January 30, 2009

* * * * *

Four more U.S. airlines reported fourth-quarter losses, capping a tough year, but the industry is hoping that new fees, higher ticket prices and lower fuel bills will bring improved results in 2009.

Airlines have begun boosting revenue by raising their fees for incidental services and charging for perks that were once included in the price of a ticket … US Airways Group hopes to generate as much as $500 million of such ancillary revenue this year.

So far, the industry’s capacity reductions have enabled carriers to raise prices and report fairly healthy gains in unit revenue, or the amount taken in for each seat flown a mile.

But gyrating oil prices and the recession continue to cloud the industry’s outlook. Volatile crude prices gave airlines fits last year as oil’s descent in the second half led to losses on hedging contracts they had entered to guard against rising jet-fuel costs …

 

The industry faces headwinds, including the challenge of holding down unit costs as capacity is cut and previously profitable international routes turn weaker. The International Air Transport Association … said passenger demand fell 4.6% in December and international cargo traffic dropped more than 22%.  Continental said it is concerned about a deterioration in its premium international business, its business bookings and even some leisure markets.

While Continental, the fourth-largest U.S. airline by traffic, figures its annual fuel bill will drop $2 billion this year, it said it is anybody’s guess whether oil will climb to $150 a barrel or decline to $20 a barrel …

US Airways, the No. 6 U.S. carrier by traffic, reported a net loss of $541 million … with $234 million in losses reflecting adjustments to its fuel hedges. The company expects it will pay $1.7 billion less this year on fuel than in 2008. US Airways plans to reduce its mainline capacity by nearly 6% in the current quarter …

Edit by SAC

* * * * *

Full Article:
http://online.wsj.com/article/SB123315725894024393.html

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Uncertainty Fuels Airline Price Cuts

January 14, 2009

Excerpted from the Miami Herald, “Airlines cutting prices to stay aloft during recession, ” By Harry Weber, Jan 7, 2009


* * * * *  

A wave of fare sales has spread across the airline industry…as the weak economy continues to put pressure on carriers to fill seats even after they drastically reduced capacity and some expressed willingness to cut more.

Many experts and even executives at some airlines had expected that after deep capacity cuts went into effect starting in September, the number of fare sales going forward would be fewer and farther between. But fuel prices have come down significantly, and the weak economy has eroded demand for air travel…

It’s not unusual for airlines to announce fare sales in January…but what’s different for several carriers this year is that the discounts are for travel extending as late as April, May or June..The sales last January were typically for travel through March, he said.

Seaney said he believes uncertainty in the economy is the reason for the change…A handful of major carriers and discount carriers have launched fare sales since Dec. 31. Others are expected to follow with sales of their own, or to at least match discounts offered by rivals on competitive routes…

Discount carrier AirTran Airways said Tuesday it was offering a nationwide sale with one-way fares starting as low as $39…”We are uncertain about the economy and we are trying to build business on the books for the winter and spring,’

Edit by SAC


Full Article:
http://www.miamiherald.com/business/nation/story/840842.html
* * * * *

Want more from the Homa Files?

Click link =>
The Homa Files Blog