Southwest Keeps Fans From Straying

SAN FRANCISCO In its signature folksy manner, Southwest Airlines over the last two years has used techie social marketing tools, including a widget and a blog, to inject itself into customers’ everyday lives.

As other mainstream marketers are now discovering these marketing tools, Southwest shares the insider knowledge it has gained from its long-term efforts. Its experience offers first-hand evidence of what works and what doesn’t for a discount-oriented target market.

The company introduced its online “Ding” service in February 2005, before most marketers or airline customers ever heard of marketing widgets.

The Ding is a computer application—or widget—which consumers can download on their personal computers. Whenever exclusive discount fares are offered, the program emits the familiar ringing sound of the in-flight seatbelt bell. The discounts last only 6-12 hours and can only be accessed online by clicking on the Ding application. The audio cue is the same sound used with the slogan, “You are free to move about the country,” in the company’s TV campaign, which ties the service to the airline’s brand advertising.

In its first two years, the Ding application was downloaded by about 2 million consumers and generated more than $150 million in ticket sales, said Kevin Krone, vice president of marketing. While Southwest has been steadily increasing its Ding promotions with e-mail, direct mail and TV advertising, the most effective marketing method has been word-of-mouth referrals, said Krone. “The ratio of referred [Ding] installers to total installers is very high, which tells us that people who download the program often convince their friends to do it as well,” he said.

He added that the pace of both monthly Ding downloads and ticket sales has steadily increased each quarter. However, the Ding application’s effectiveness as a launch pad for the company’s Rapid Rewards loyalty program and other services has remained fixed, he said. The company declines to give conversion rates, but industry sources say 45 percent of Ding users come back to book again, compared to the industry rate of 27 percent repeat ticket sales.

Based in part on the success of Ding, the airline in April 2006 launched a “Nuts About Southwest” blog, written by employees and soliciting comments from the public. An internal search engine helps visitors zero in on the topics that interest them. Designed to give customers an inside look at the company and access to 30 cross-department employee bloggers, the blog generates a decisive response from Southwest loyalists. In July 2007, the blog attracted more than 100,000 total visits and more than 40,000 unique visitors. A blog post by CEO Gary Kelly about the airline’s consideration of assigned seating drew more than 600 comments, mainly in support of the current non-assigned seating practice.

Over the last 12 months, the blog has featured 260 posts, and has received about 6,200 comments, or about 20 per day, said a company representative.

As a result, Southwest is committed to digital social marketing as a way to drive business, said Krone. For instance, the airline is considering other online widgets that could provide travel services to customers, he said. All future initiatives will be informed by the evolution of these early efforts.

For instance, the Ding program showed that digital interaction operations must be easy. Over time, the company repeatedly simplified the Ding installation process to prevent any customer frustration. It also made the deals more selective. “Customers felt overwhelmed when we showed them all the Ding discounts to all the cities we serve. So we allowed them to filter which cities they wanted with each session,” Krone explained. “That evolved to the present system, in which customers identify the 10 cities that interest them when they sign up for Ding.”

From its blog, the company learned that talking directly with customers requires a more honest, direct approach than typical marketing. “If there is something that customers demand and you can’t change it, it is best to be transparent,” said Krone.

For example, Southwest expanded its time frame for booking advanced tickets due to customer comments, but did not go as far as some people wanted. Rather than ignore that unsatisfied minority, the blog explained company policymakers understood some customers wanted to book further ahead, would study the issue and might later expand the time window. The blog showed the marketer that “explanations and transparency are as important as solutions,” said Krone.

A McKinsey report supports Southwest’s firsthand experience with social marketing. “How Businesses Are Using Web. 2.0” states that marketers find online discussions using collaborative and communications technologies “offer immediate value for their organizations.” Blogs, in particular, “help engage prospects and detractors in a positive and productive discussion,” thus helping brands manage their reputations, according to the March 2007 study.

Southwest says that online social marketing is a natural extension of its offline efforts to connect with customers. “It fits like a glove on a hand. We were doing social networking long before it was cool and digital,” said Krone. “If customers are digital, we will be digital. If they are online, that is where we have to be,” he said.

Travelers’ migration online shows no sign of abating. Eighty-one percent of leisure travelers and 90 percent of business travelers are shopping online, and those e-consumers are demanding both control and customization, cites a June study by Forrester Research.

A year ago, online marketers were advised to listen to online conversations to gauge what was being said about their products, said Rob Crumpler, CEO of BuzzLogic, “but as social media matures as a marketing channel, now it’s more important for brands to actually engage in the conversations.”