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How Southwest Made Hay With "Bags Fly Free"

The conventional wisdom in the airline industry is that product differentiation doesn't work when it comes to coach flying. Many airlines have used half-hearted efforts to promote their offerings, but nearly every single one has failed. (Remember American's "More Room Throughout Coach"?) Southwest (LUV) has been fighting the most recent differentiation battle with its refusal to give in and start charging for checked bags like most of the rest of the industry. So far, Southwest is happy with the results, but much of that may be thanks to relentless, and creative, communication efforts.

The problem with offering bags for free is that most people don't take that into account when they buy their tickets. When travelers go to buy tickets, there is nothing that talks about checked bag costs. A traveler might see a Southwest ticket for $400 roundtrip and a ticket on any other airline for $380, so he'll take the cheaper one, right? Often, yes, that's what happens. But it fails to take into account luggage costs.

If the traveler is checking one bag, that cost advantage disappears and in fact, the Southwest flight becomes cheaper. That makes a lot of sense when looking at it objectively, but few people shop that way, so it has become an education effort for Southwest so that it can justify its stance on fees.

At first, Southwest seemed hesitant to do anything about it. The "campaign," if it could be called that, limped along without much effort. Then Southwest realized that was a mistake and it crafted the "Bags Fly Free" campaign.

As the largest sports league sponsor in the US, Southwest began plastering the country with its no bag fee mantra. According to the airline, this has paid off and customers are switching to Southwest more often. It fits quite well with the airline's customer-friendly brand, and it has created a halo over the name as being a champion of the customer.

But Southwest didn't just stop there. The airline has now started putting designs on airplanes and bag carts noting that bags fly free. As I mentioned in a previous post, this was a great strategy for reaching people right when they're angriest about bag fees - after they've had to pay them on another airline.

And now, some of Southwest's employees have started to get creative as well. A recent post on the Southwest blog tells a story of one ground operations agent who got on the plane just before it was ready to push back and hammered home the "bags fly free" message.

Ladies and Gentlemen, can I have your attention please. My name is Jay, and I am the Operations Agent for your flight to San Diego today. I want to give a shout out to my math teachers for teaching me how to do the following math: I show 137 passengers had 125 bags checked in today for this flight ... with what the other airlines are now charging for luggage, I come up with at least $3,250.00 that you all did not have to pay EXTRA today to travel. Thanks for flying Southwest Airlines.
Talk about a great way to relate the savings to customers. People on that flight checked 125 bags, so it was a highly relevant statistic. This type of creativity is helping Southwest try to prove the impossible - that people do care about fees above and beyond paying lip service.

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