The CMO Interview: Roger Frizzell

Navigating Recession With CRM, Direct, Online

American Airlines' Roger Frizzell on Staying Steady in a Tough Economy

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NEW YORK ( -- Roger Frizzell knows why you fly. He also knows you're frustrated by it.
Frizzell: 'We are taking a lot of steps, whether it's at the airport itself or messaging from the gate agents or flight attendants or pilots. The idea is more and better information.'
Frizzell: 'We are taking a lot of steps, whether it's at the airport itself or messaging from the gate agents or flight attendants or pilots. The idea is more and better information.'

Not long after joining American Airlines as VP-corporate communications and advertising in late 2003 -- a period of time he describes as the beginning of American's "turnaround plan" from its near bankruptcy earlier that year -- he and his team came up with the "We know why you fly" campaign.

But the economy has since intervened. In May, American found itself squarely in the crosshairs of the media and angry travelers when it introduced a $15 first-checked-bag fee in an effort to thwart the economic pounding it was taking from rising fuel prices. Nearly every other airline followed suit and began introducing fees for bags, bottled water and food. But American was first out of the gate and took the brunt of the "nickel-and-diming" charges.

And turbulence remains. In an interview with Advertising Age, Mr. Frizzell describes his outlook for the airline with a phrase every marketing executive seems to be using with great frequency: cautiously optimistic.

Ad Age: What are the biggest challenges you face from a marketing and competition standpoint?
Mr. Frizzell: There is a growing feeling among customers that flying is a grind, it's lost some of its luster and that and all airlines are becoming more or less the same. One of the things we're trying to highlight and will be doing more of going forward is ... investing millions of dollars in new planes and upgrading our Admiral's Clubs and our next-generation business-class seats. Because of all the things that have happened in the airline business over the last couple of years, especially last year, we have to convince our customers that we are a cut above.

Ad Age: Are these problems that marketing and communications can fix?
Mr. Frizzell: Marketing, advertising and PR and internal communications are all part of that mix. Our customers want to know more about their travel experience, and they want more communications from the airlines. So we are taking a lot of steps, whether it's at the airport itself or messaging from the gate agents or flight attendants or pilots. The idea is more and better information.

Ad Age: Most people just want to know you can get them from point A to B on time. Has the messaging changed to simply, 'We can get you there'?
Mr. Frizzell: It will be part of the message but I don't think we will eliminate the other key messages, which are things that are also important to customers. We're also going to be doing merchandising in 2009, as American Airlines has unbundled its product to go to more of an a-la-carte pricing strategy in a number of areas that's been critical for us to survive.

Ad Age: As the economic situation evolves and worsens, is there a part of the marketing mix that's becoming more important, such as CRM, customer analytics or TV?
Mr. Frizzell: If it comes to market stimulation, CRM and direct are going to become more critical. We're looking at 2009, and we have invested heavily in our CRM capabilities in the past and will continue to invest going forward with new tools and abilities. I believe our promotional opportunities have increased because some of the tools are better and there's greater CRM expertise around the company and in the industry and I look at that as a great new frontier of tomorrow.

Ad Age: Has there been a shift in marketing dollars that reflect that?
Mr. Frizzell: There was a shift a couple of years ago of more investment in CRM as part of the mix and that will be a continued trend. The same is true for the investment ... in online media. You're not always going to increase your pot, so you're going to have to have some hard discussions on where you put your resources and your dollars.

Ad Age: Does that mean you scaled back on the less-targeted activities such as TV or print?
Mr. Frizzell: In 2008, we scaled back a little bit on print and moved more towards our broadcast and our online audience. I always worry when you move back on print too far because I think it's a great vehicle even in this online world. I think there's a role for all the media depending on what marketplace you reach out to, but in 2008 there was a scale back in print. Looking at 2009, I don't have the full plan completed, but I'd love to at least keep my toe in the water in as many media as possible. But, at the same time, we can't neglect online and broadcast still plays a huge role.

Ad Age: So will the 2009 media/marketing plan look significantly different than your 2008 plan?
Mr. Frizzell: What I'm going to have to do is play it in halves. The first half may look a lot like the 2008 plan but leaving contingency available for the second half and contingency dollars ready in case you need to have a lot of investment and market stimulation if the economy really turns in a negative direction. I think you need to do more in the promotions space to stimulate the market, and at this point promotions is part of the mix, but it's not leading the mix, and it will play a bigger role.

Ad Age: Have you had talks with your agencies about cutting back?
Mr. Frizzell: We had a cutback in the fourth quarter of 2008. It was a difficult reduction, but at that point, fuel was way up, and there was no opportunity to do anything but that and so we took some reductions and it was not easy.

Ad Age: What did you cut back on?
Mr. Frizzell: It was really in my broadcast buys and international purchases and some production.

Ad Age: You guys were really first in that firing line on the fees issue. What's your take on how that all played out?
Mr. Frizzell: We believe there's an opportunity to improve overall our customer communications. It's an area that has opportunity for improvement, but there's also a real payoff in the end. If we had even more-robust customer communications, we could have done more to talk about why we were making those changes. Delivering bad news is not the fun part of the job, but we did our best to explain the circumstances behind it to ... our customers even though they didn't like or understand it. There was a general understanding by the marketplace that this wasn't a step we wanted to take, but it's one we had to take and we had to do something to change the model.

Ad Age: So is that to say you were happy with the way you handled it?
Mr. Frizzell: I never say those words, but I can say, under the circumstances, we did the best we could, and there would probably be things I would adjust going forward but it was a difficult time and very difficult circumstances, and you try to make the best out of a bad time.

Ad Age: With the price of oil dropping are there are any thoughts about rescinding some of the fees?
Mr. Frizzell: While fuel prices have gone down, that has only happened very recently, and the fact is, the market for crude oil remains highly volatile. And another major consideration is the troubled economy. So those are very real challenges, and why we and others are taking steps to increase revenue. We are doing our best to balance how we generate new sources of revenue and provide fair value to our customers.
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