04.01.2009 Aviation, Sales

IATA says Aviation declines. Really?

“Our Heads Are Round so our Thoughts Can Change Direction” [Francis Picabia]

According to IATA General Secretary Giovanni Bisignani, aviation warns of a decline in global aviation. But is that reasonable? Yes, global economy suffers. But look at the global maps and you will find a clear relation between airport and decent aviation and the size of cities. Aviation is a key motivator for business, but the travel industry suffers from a major inferiority complex:

Travel Agents: Any financial consultant who at the end of the year gets you €1,000 interest a year will be decently paid, but the consultant where you spend €5,000 for a vacation shall work for free?

Airlines: Global economy needs aviation. But thanks to price dumping (and not only since “low cost”), airlines operate for years at the edge of commercial harakiri.

In December, I was asked by an airline manager, what I would change in the airline industry if I’d have a chance. What I mentioned, many of you heard from me before again and again:
Remove the price tag from the tickets! No other industry in the world provides the information about the price the seller pays for the product. Or you would not buy a car or even a yoghurt without arguing with the cashier about a discount! This is a relic from the decades when airline tickets were decently priced and the travel agent truly was an agent, receiving 9% commission. At the time, many agencies cross-financed other business with their airline sales. An Economy Class ticket for €2,000 at 9% was a nice deal… The hotels, at the time frequently not paying the commission were “negligible”. That’s “the good old days”! Gone.
But if the travel “agent”, or better the travel consultant sells today, they get no commission. Then why do the airlines show the price? It is totally outdated thinking that must be addressed.

The second thought I had in mind I mentioned last week: Airline sales is “suddenly” en vogue again. The managers promoting sales-free and sales-independent “self service” and “internet” without a strategy find themselves the most hit by the financial crisis and the recessive commerce. Because cheap flights sell themselves, but they are also the most vulnerable. Selling a product is a question about long-term relation. So better have or build a sales team with a personal reputation in their market. As they represent you.

Food For Thought. Please share yours 😉

28.12.2008 Aviation, Sales

Revival Of The Sales Manager

In the past months, IATA secretary general Giovanni Bisignani has published one horror scenario for the airline industry after another. At the same time, I have worked with an airline that had always addressed e-Commerce as a part of the sales portfolio and in the past year increased their sales force beyond the airline’s growth figures. At the same time, they announced record revenue and earnings where their direct competitors struggle to survive.

The following focuses on airlines, but is similar in other industries (i.e. hotels).

Since 1994 I address Airline Sales & e-Commerce in my annual ASRA-presentations… One concern I try to communicate ever since is the need for airline sales managers to adopt the new technologies into their product portfolio. The stronger e-Commerce gets, the more important that knowledge becomes. But just lately a friend of mine, being Manager Scheduled Flights Procurement – sitting on the other side of the table – complained that many airline sales managers have no idea what their company does in regards to e-Commerce… Say what?!

In fact there are two issues I see in need to be addressed:

1. The new role of the airline sales manager
In a highly dynamic development on Airline Sales & e-Commerce, the new airline sales manager has to be fit to not only know what the own company does in that field, but he is also the scout to monitor what goes on in the market and report it.
But: Few airlines have yet build the structures and hirarchies to promote a cooperation between the IT and sales department! In many airlines, IT is higher valued than sales, so IT projects are pushed forward without sales justification. Say what?!

2. The new value of the airline sales manager
Why is it that companies like Easyjet or Southwest Airlines operate a network of sales managers and lately increase their sales forces? Might it be possible that “traditional sales” has an impact to their revenue…? Isn’t it enough to focus on Google Adwords? And why the heck are these airlines having a sales force continue to have the higher service classes (First, Business) and fill them? Could it probably be that the sales managers can sell these “high end products”, where e-Commerce competes mostly on the price level? Exclusively on the price level?

As I emphasized in the past years: Everybody can “sell” cheap. You do not need a sales manager for that. But to sell out of season and to be able to sell at higher rates, it is reasonable to look at all distribution tools and channels: IT/e-Commerce, Yield Management, Sales and Marketing. And run them in a concerted way to assure best outcome. And hey: This is called “Sales”… Say what?! 😀

Food for thought! What do you think about this?

21.12.2008 IT

Social Networking

As Blogs are a part of “social networking” and as I follow several blogs like the German Tourismuszukunft, I thought to share some thoughts. As usual, I do appreciate your feedback. This blog is meant to trigger thoughts and make you ask me. My statements are thoughtful, but not necessarily the only truth. Often enough, I do learn better from the exchange with you.

In November, I finally signed up for Facebook and Plaxo, finding old and new friends active in these networks. As of my “troubled history” with Xing and as a majority of my friends are international, I moved my private activities to Facebook and focus professionally on LinkedIn. Oh yes, and my reviews I add to Qype, though I did not have much time for that either lately. I publish once a week in this blog, try to think a bit about the philosophical blog on Sapphilosophy, try to answer on LinkedIn and communicate with my friends and update them on Facebook. Now I want to install WordPress on my website to move my blogs away from Big Brother Google, and my website needs some updating too… Information Overkill…

In an interview, I was just questioned that I do so much “business related activities”. But don’t we all have our hobbies? Business Development, Aviation and Hospitality are my business. And my hobby. My life. But we need to find the time first we can then invest into business and hobbies alike. On- or offline. And in honesty: I appreciate being a lot easier in touch with you than 20 years ago. And I appreciate a phone call (Skype?) and e-Mail. But isn’t a personal meeting definitely more valuable than any electronic exchange. Isn’t that, why we all appreciate opportunities like ITB to meet face to face with many in a short time? Isn’t that the same true for Sales? Yes, once a contact is established, e-communication is okay. But it does not forever substitute for personal meetings.

Food For Thought! (Share your thoughts with me)

14.12.2008 IT

Paranoid: Big Brother’s Watching Me

The Association of Corporate Travel Executives (ACTE) is requesting that the use of a controversial identification document reading device, being deployed at U.S. borders, be temporarily halted until thorough testing can determine if it is a potential source of traveler identity theft. According to published reports, the new device can remotely read highly personal data as an individual approaches U.S. border crossings. If traveling in a car, the device can read data on every individual in the vehicle, using Radio Frequency Identification (RFID) chips embedded in passports, passcards, and drivers licenses.

ACTE is concerned that unauthorized individuals could either resort to electronic eavesdropping at the border, or use similar devices that could extract data from RFID chips at other locations,” said the association’s Executive Director Susan Gurley.

Some of you remember my ASRA-presentation 2007, where Christoph joked about me being paranoid? Yes, I am! Not paralyzed, but careful. My life is largely “online”, I use Social Networks, have my own websites and blogs. But yes, I do consider who gets access to what and I do distrust companies like Microsoft, Google, Yahoo & Co. I have to use them. Some of their stuff is simply great (Google Earth + Maps), but these corporations have stronger power today than a president of the United States. Do I use Facebook or does Facebook use me?

Food For Thought!

07.12.2008 Aviation, Hotel, IT, Sales

Lately major discussions in Germany and online are the various public “rating” sites. Using Qype myself and HolidayCheck for the hotel ratings and reviews, I am a mature online user, able to read as well between lines as when I read the catalogue of a tour operator…

From many of my replies here the extract: It’s hyped. So to get the right perspective, sit back and think about it for some minutes. As you hopefully know Shift Happens, we are facing an information flooding. Where in the “good old days” it was necessary to know the restaurant and hotel critics, the authors of the major travel guides, it is now necessary to also know the major online portals. But it is not necessary to search and review all and any blog entries somewhere. That is “lost in the noise”, just as it was without Internet, where the noise existed (called “word-to-mouth-propaganda”).

Where in the good old days, the books and critics published in print had the main impact to day-to-day operations, the Internet offers another advantage. If you had a bad reputation in the past, it took you at least a year to get an update (new management, renovation, …) into the next edition. In the Internet, this can be promoted much faster.
But as fast, a bad rating can be outsmarted by good customers. If you have a problem with service, it is not the rating that sucks, but you better improve the service quality and proactively market it. Like the good old “We listen to our customers”…

Everything becomes public (and published) these days. But the users resort back to “trusted brands”, of which some (like HolidayCheck) are new, but don’t ignore the value of printed travel guides. It’s a shift from “search available information” to “select”. Where information was rare, it is now flooding us: “Select” means to be able to qualify the valuable information from the noise. And for the rated company to learn, what information has impact on the customers – and which are “just another one” with minor impact.

Do not ignore them. But don’t let the makers of these sites qualify their importance for you. The only ones who can are your customers and you. So if approached by another of these important experts telling you what you have to do: Don’t let them unsettle you. Sit back, think about it. But keep in mind: These tools do have their value and after a hype peak and a disillusionary phase, they’ll be here to stay…

[Update: I did not move from Qype to Yelp, there’s many other such “tools” meanwhile and I was unhappy with the user management of Yelp]

30.11.2008 Aviation, Values

Old School – New School

Some of you have already read the Sapphilosophy-Blog I created in September as a result of another discussion with friends on philosophical issues like love, friendship, honor.

Very famous in Germany on the topic is “the Knigge”, his book “On Human Relations” being considered to date the guideline for respectful interpersonal relations.
In the past weeks, I was told to be “old school”, namely for the respect I have for people, but also about topics like loyalty or (personal) honor. These values are in short supply these days, but I am convinced it is the more necessary to hold up the flag.

Once more I was told this is my main weakness. Right. But being a weakness in business, I found it my great strength in life. I stay errect and look into the mirror with pride. Sure I made my share of mistakes, but is there anyone flawless? And I stand up to them. The same friend questioning this “weakness” asked me, how I could be so optimistic despite the treatment I received throughout my business life. That is because of my friends – mostly people like you, reading this blog. For you I am grateful.

I thought about it quite a while if I should address this topic in the Food For Thought blog, but the world is changing. Greed, arrogance and egomaniac arrogance are going out of fashion, the global financial crisis and people like Barrack Obama make us reconsider our values. In aviation and travel industry, we shall also consider how we treat our own, business partners and staff alike. And if it makes sense to save money at all cost.

Robert “Bob” Crandall was my topmost boss when I started in the airline industry back in the late 80s. He shaped the entire industry, but having met him just briefly, he has been a role model for me ever since. Under his management, the entire company was a family. Everyone worked for the benefit of the family. Suppliers were happy to deal with American Airlines. Sounds strange to you these days? Yeah. The bean counters took over.

Food For Thought: Can you look at your life with pride?

23.11.2008 Values

Debugging Six Sigma

If you don’t know what Six Sigma is about, read this Wikipedia-article first.

I had some discussions lately about sense or nonsense of Six Sigma. Part of the information flooding today is that there are a lot more variations of “best practices”. So I do not disagree with Six Sigma, but there’s two points you should keep in mind with their or any other best practices. They are guidelines. Not a panacea. And with all such best practices, they are about what you make out of them.

For Six Sigma especially, there is a point I found far to strictly adhered to: The financial focus.
In most jobs I have done in my life, I was the fire fighter for managers who did not understand the value of a fire fighter. Because a fire fighter is paid like an insurance. You are happy if you never need it.
We call it the Saint-Florian-principle:

Oh dear holy Saint Florian,
Don’t burn my house
take the other one…

There are many such jobs in any company, but that’s the jobs, most often the first ones being cut by Six Sigma disciples. Service, support. They are cost factors, they do nothing but cover for the mistakes done up front. As there must be no mistakes, there’s no need for service and support. It’s a very typical trend for any company where managing responsibility is transferred from the entrepeneur to the finance, money driven folks.
Good ideas are declined as they are risky and you got to believe in the idea. Speaking to the financial guys, my experience is that you hit a brick wall. The same is true if you talk about “non-essential” services. Like service. And my experience is that the entrepeneur has a total different understanding of Six Sigma or other such best practice principles, than financial bean counters.

So it is not about Six Sigma or not, but what you make out of it! I think, we just learn, what bean counters got and get us into. I call it greed and fear. “CYA”: Cover your ass. I learned that from a CEO with finance background. I may live better if I would live their way. But I sleep far better trying something and standing up for my own mistakes.

What a chance the U.S. to have a president-elect who is creative and open to change = risk? I hope the focus of companies shifts from a conservatory play-it-safe back to a search for creative new ideas and do some trial. Sure, not everything will work out. But I predict: The survivors are the ones that move.

16.11.2008 Aviation, Sales

Business Development in time of crisis

Looking at the financial crisis, many companies reconsider their sales focus. What I addressed in my ASRA-presentation this year suddenly seems to trigger. Everyone can sell cheap. So if you are in sales, you need to focus your attention on the products that need sales support.

This week, I had quite a discussion about the validity of my sales strategy and business development. Interesting enough, my supporter was an airline that just recently anounced another increase in net earnings. Their German team has also exceeded sales targets. The offense was voiced by an airline sales manager, who’s company just published another loss for the last quarter and is expected to accumulate overall losses this year.

The focus of the successful airline is on the specialists: Tour operators, travel agencies, corporates.
Anyone not having a focus on their destinations is serviced with a lower priority. Effort is only targeted to the specialists who they pamper and invest time to visit and invite. The elephants (consolidators, internet portals) producing large but price-driven turnover are running aside.

What we wondered is the focus of many managers on turnover, volume and market share, not on revenue. That’s the managers impressed by “large numbers” and quick volume, not caring about cost or long term relations. How long has the sales manager been the same to the customer? How experienced is the sales manager? What is your strategy?

Food For Thought: Especially the aviation industry is in need for a reevaluation of values. If I hear IATA-secretary general Giovanni Bisignani anounced a drop in passengers by 4.8%, in Asia even 7.8%. The airline industry is predicted to accumulate losses of 5.2 billion dollars this year?!

So if passenger numbers are going down, a logical consequence is to focus an increase in yield!

Do I miss anything? Want to change? Interested in Business Development?
Contact me.

09.11.2008 IT

Information Overkill

FVW Blog just mentioned a senior travel industry manager asking, who has time to read all that information published “Web 2.0”.

In the good old times, we had no control on who said what. But it did not matter much, as the word was forgotten quickly. Today, thoughts are not voiced, but published. So word reaches more people. But similar as in the good old days, the word gets lost. In the noise of flooding information, to find the interesting part becomes valuable.
Consultants recommend to keep control on what is said and published about your company. But where do you start, where do you end? Inflation of the value of the written word. So the good old paper publishing companies recover their value. Not limited to the printed issues. But to have editorial teams that built a reputation of “quality”.

Shift Happens » It’s all about control of the information flood. Information overkill. If I seek one information, I limit myself before on how much time I invest in it. I use a timer. Usually the time is gone by faster than I anticipated…

Google was founded in 1998. Before Google, there was Yahoo. I do miss the old Yahoo. I do miss a solution that qualifies the information that I get. I get too much crap searching Google. So as Google revolutionized Internet search, what will come after Google? In 1998, Google started with 24 million indexed pages. In 2004 they had already 8 billion pages in their index. (Source: Wikipedia) That means: These pages existed. How many today? Google doesn’t tell…
[Update 2016, Wikipedia says: “In 2012, Google has indexed over 30 trillion web pages, and received 100 billion queries per month”]

So if a consultant recommends you to keep an eye on the information published about you in the Internet, better ask him/her how. To date, I have not received a decent answer. So I keep 10 web pages and 10 Blog Feeds as my personal maximum. You want me to read your blog? If I do, I ask myself, which other blog I delete from my RSS-reader (Thunderbird). Interesting, more and more friends tell me they do the same. The more IT-focussed their business is, the earlier they limit their monitored information to the valuable ones…
And on top of that list are: The company’s own website. The renowned, famous references. Blogs or independent websites? Only if I don’t find the information elsewhere…

Food For Thought.
How do you handle it? What’s your experience? I’m curious. Let me know 😀

02.11.2008 Values

Value of Time

Having linked Momo last week, I know the book is worldwide not as well known as in Germany. It is the story about a little girl fighting the Grey Gentlemen, who live of time and suck it (just like vampires) from us. We have less and less time to be happy. People themselves become grey. “Time is money and we don’t have any” is a joke I increasingly hear. Itself and it’s variants. Seminars in “time management” are said to be a cash cow.

Time is the only commodity we cannot replace.

What good is it, if you are wealthy but lack happiness? Friends wonder that I take one hit by Murphy after another, still smiling, still happy. A question of priorities: I am happy. Yes, I can live of Hartz IV if I have to. No, nothing I fancy. But we are lucky to have such a fail-safe! I visited Russia lately. The average income in the city I visited is 10-15.000 Rubels (350-500 Euros). No real social security. The average cost for a one-room apartment is 10-15.000 Rubels. Oops…? I have met people living there. Happy people. Not rich. But happy. Something becoming rare as people gain wealth…

Money ≠ Happiness?

Do I want to be wealthy? No. Yes, a decent monthly income doing a decent job would be great. And I love to do a good job. I am happy.

Food for Thought

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