We love being blown away by good branding, even if the companies aren't our clients. It happened recently for our Agency Chief Gaëtan Fraikin, inspiring us to shine the spotlight on Virgin America. This innovative airline created clear differentiation and generated high customer support in a brutally competitive market.
Establishing a difference
Breaking new ground is a familiar feat for companies bearing the Virgin Group corporate name. Though the company only owns 25% of the airline, Virgin Group founder Sir Richard Branson is well-known for challenging established ideologies. So it should come as no surprise that the California-based Virgin America airline capitalized on the brand equity of its namesake and followed a similar corporate strategy—gaining attention by being different.
If you haven't had the pleasure of hopping on one of the customized red and white Airbus A320s yet, you're in for a treat. Comfy seat? Check! Personal entertainment? Yep! An inviting and funky atmosphere? You bet! Here's how Gaëtan described his first experience flying with Virgin America:
“Walking up to the gate and the podium, there's music and I think, 'wow this feels really good.' I feel like I'm walking up to a lounge. A smile is greeting me, and everyone seems happy. It's 6:30 in the morning. Hard to believe they are happy, but they genuinely look happy."
From the elegant staff uniforms to unique pink and blue mood lighting, all the way down to a groundbreaking and immensely entertaining music video-esque safety film, Virgin America has gone the extra mile to secure its place as the fun, different and customer-first airline.
Right place, right time
Americans like to fly. According to the U.S. Department of Transportation (DOT), we spent approximately $195 billion on air travel nationwide in 2012. But do we love to fly? Not exactly.
Chances are you've grumbled about airline annoyances like baggage fees, vanishing amenities, grumpy customer-service agents and ever-shrinking legroom. And you're not alone. Americans have been generally dissatisfied with the state of air travel in the U.S. since, oh let's say, September 11, 2001.
Playing off pain points
Both brands generated strong customer loyalty by identifying specific customer complaints and offering options that were either not available or not free on large carriers. The example these airlines set, identifying differentiators and building their brands off of them, established a precedent that Virgin was able to exploit.
Immediately after the terrorist attacks, several airlines (specifically the big players such as United and American) reacted to lost revenue and lower passenger numbers by cutting back on services and support. These moves created gaps in the market that opportunistic airlines were able to take advantage of.
Customers returned to air travel quickly and began looking for improvements in cost, comfort, convenience and customer support. Where they found these options were with low-cost carriers. Prior to Virgin's entrance into the airfield, two airlines had been reaping the rewards of this altered landscape for several years: namely Southwest and JetBlue.
When this fledgling airline entered the scene in 2007, it went after the full scope of pain points, and they did it with style! The little cousin airline to the more established international carrier, Virgin Atlantic, claimed it planned to “make flying good again." The key to this mission statement is “again" as it politely nudges the competition, highlighting the fact that the status quo is not what passengers wanted.
As stated, Virgin is known for addressing customer needs, by creating a comfortable airline that's competitive on price and offers unique extras that keep passengers coming back again and again. From leather seats to entertainment on demand, to music in the bathrooms, Virgin hasn't skimped on anything.
And customers responded. Take a quick scan of customer reviews on Yelp and you'll find statements like: “Thanks Sir Branson, this one is truly for the people and it shows," and “They take such good care of you that you do not miss home."
The branding home run
In Virgin America's case the airline's success is ALL about optimal branding. To do this, they followed three key branding principles:
1. Be different: Virgin knows who it is and maintains that distinct personality. Just like Sir Branson, Virgin has maintained a clearly differentiated personality (fun, energetic, youthful) across all properties.
2. Be consistent: The iconic red branding, that's used in marketing for ALL Virgin products—from cell phones to wine—is familiar and recognizable.
3. Be essential: Virgin America identified key customer pain points and addressed them head on. It made itself an invaluable player by offering more than the competition.
By following these steps Virgin America has successfully built equity in the brand, resulting in the die-hard customer loyalty mentioned above.
A winning strategy
In an article published by The Wall Street Journal (Nov. 12, 2013), Virgin America had reached a point where its financial results were finally meeting with its branding savvy. By the end of September, the company had posted its second consecutive profitable quarter in a row, and was on its way to closing out the year in a positive position.
According to the article, Virgin America's Chief Executive Officer David Cush predicted 2013 will be the airline's first profitable year ever. In addition, there are rumblings that the company is prepping for an IPO sooner than later.
The profits reflect what the customers already know—Virgin has staying power. As Gaëtan stated, “My personal opinion is, I don't want to fly any airline other than Virgin. That's my airline, I'm done, sold. They've built equity with me all the way to the top of the pyramid. I'm part of the club."
While Virgin America operates in an entirely different industry than most of our clients, these basics of branding transcend the boundaries of that market. Health and life science brands can definitely learn from the example Virgin has set, by adopting key differentiating branding strategies and confidently following a winning path to building brand equity and ultimately a loyal customer base.