To be (premium) or not to be (premium)

With air travel down an impossible-to-imagine 96% and no end in sight, leadership at each airline is grappling with two pressing questions:

1. When will it be safe to travel again?
2. What will make passengers feel safe while traveling?

No one knows the answer to the former and so most airlines are focusing on the latter.

While many airlines have gone in the obvious direction of lowering prices to try to bring back customers as quickly as possible, Delta has pivoted the other way.

In this article I’m going to explore price and its relation to storytelling within marketing.

Premium experience

Ed Bastian, Delta’s CEO, made this statement in April 2020:

“We’re going to spend the time in these next few months as we build the company we want for the future, not necessarily rebuild what we had… That’s going to be an opportunity for us to focus on a more premium experience.”

I learned about it via ThePointsGuy.com in a post on their Facebook page, so I immediately scrolled down to the comments. Sure enough, there was an outcry.

“Premium experience means premium prices.”

“Get ready for price hikes!”

“Delta is already too expensive. Guess they won’t be getting my business!”

That can’t be the response Ed Bastian was hoping for, right?

‍

What exactly does ‘premium’ mean?

Marketing is storytelling.

Not “once upon a time,” but the process of weaving a compelling narrative to the right person, and in the right moment.

As Seth Godin so eloquently points out, Fancy Feast Gourmet Cat Food is not for cats, but for people. You have no idea if super expensive cat food is better or worse than the bargain brand, because you’re not the one eating it. But the story Fancy Feast tells in their marketing is designed for people who pride themselves on pampering their pets. If you’re the kind of person who treats pets as kids, or puts pets needs above your own, you’re probably willing to pay a premium price to feel like the world’s greatest cat owner.

And there’s nothing wrong with that.

The point is, pricing is a component of marketing. It’s not the only component, but it’s a pretty big one. If I quote you $100 for my magic show and the next magician quotes you $1000 for his show, you are absolutely going to have a different opinion about the two of us, just based on price alone.

You’ll ask yourself, “Why is this magician 10x the price of that magician?” Forcing you to ask that question is, in-and-of-itself, marketing.

Whether you can afford or are willing to pay for the more expensive magician depends on a host of other factors, and is the topic of a different article about attracting the right audience. But the crucial insight here is pricing influences perception.

That’s precisely what Ed Bastian is counting on.

‍

The Story of Price

Delta was already the most expensive domestic airline in America. His strategy, it seems, is to lean into that differentiating factor. By removing the middle seat on every flight and reducing overall capacity Delta will have to make up the lost income somewhere.

But instead of slashing services or firing employees to find that money, he’s almost definitely going to increase the price per seat, and justify it by telling the right story to the right person.

That story is: Expensive but worth it.‍

‍

The experience determines the customer

Business is hard, no matter how you slice it. It’s hard to be a multi-million dollar corporation, and it’s hard to be a $50,000/year freelancer.

One thing we can agree on, however, is it’s easier to sell to someone who can afford your asking price.

No matter how hard the Aston Martin salesperson works, how good the car is, or how convincingly she weaves a story, I’m not going to buy an Aston Martin.

If Aston Martin somehow got me on their lot, they’d exert a tremendous amount of effort dealing with my countless objections to even have a conversation about a car I was definitely not in a position to buy. I would be a nightmare customer, because an Aston Martin is a premium experience that I am not interested in.

For Aston Martin, I’m not a premium customer. If anything, I’m a nuisance. A distraction. A complete waste of time.

Now imagine instead Aston Martin got Daniel Craig on the lot. This is a man with $130 million who has played James Bond on the big screen for 15 years. Not only can he afford an Aston Martin, but he’s exactly the sort of person who desires the premium experience.

And that makes him a premium customer.

Daniel Craig would probably be an absolute joy to work with during the sales process. He’s not inhibited by price, and so his ‘objections’ become preferences.

The salesperson will still have to work hard to earn his business, of course. But the process of trying to come up with precisely the right package to over-delight Mr. Craig would be exhilarating.

Premium customers inspire businesses to do better work. And the easiest way to attract premium customers is to offer a premium service.

‍

It’s not for you

Aston Martin doesn’t care that I don’t want to buy one of their cars. Delta doesn’t care that they’re about to lose a portion of their previous customer base by raising prices in conjunction with a more premium experience.

And they shouldn’t.

I’ve been a loyal customer of Delta for a long time. But when air travel becomes a regular part of my life again, I’ll have to weigh their new pricing against my interests as a frequent flier.

Maybe I’ll decide the premium experience is worth the price, and Delta will be thrilled to continue doing business with me, someone who fits the story they’re telling and appreciates the value. Or maybe I’ll decide I don’t need the new frills, and am therefore unwilling to pay significantly higher airline fees than I’m used to. In which case Delta will gladly send me to a different airline offering a price and service in line with my interests.

What would be foolish is for Delta to try to convince me to pay higher prices for a service I wasn’t interested in.

And it would be foolish for previous Delta customers to complain about paying higher prices for a service they aren’t interested in.

Ed Bastian is, in my estimation, making the only smart move for his brand and the journey he wants to take his customers on. Even if I need to find a new airline in the end.

‍

Greatness Upon Graduating: Free resource for college seniors

My little sister graduated from college last week, alone during quarantine, via a virtual ceremony on her computer. Such is the case for an entire generation of students for whom this strange year will shape their entire lives.

Internships were cancelled. Job offers were rescinded.

It needn’t be doom and gloom, however. For within every obstacle lies an opportunity. Most 2020 college graduates are understandably depressed, anxious, and scared about the uncertain job market.

But a select few have realized that they can choose to go in the other direction and stand out among their entire graduating class. This is a chance to be a premium job candidate during a time when excellence is the only way forward.

I’d like to help those students… for FREE.

This June 2020 I’ll be leading a group of no more than 20 current grads and incoming seniors on a 4-week accountability journey. Members will discover their true value in the marketplace, develop self-confidence as an individual, and build a network of trusted peers.

Each member gets:

• Four group video sessions;
• One 30-min 1-on-1 private coaching session with me;
• Save recordings of all sessions for future reference;
• Access to private Facebook group for sharing resources and continued development;
• Cohort for life.

Can you think of at least one 2020 graduate or incoming college senior who would be perfect for this program?

Send them here to learn more and apply.

It is FREE. No upsell, no course at the end, no pitch of any kind. This is just my way of giving back to a generation who is collectively facing a scarier and more unpredictable future than any other time in modern history.

ENROLL HERE