British Airways Courts Smaller Companies to Build Business
NEW YORK (AdAge.com) -- Early last year, British Airways took a look at the depressing economic environment -- and the severe slowdown in business travel -- and decided it had to try a different tack to boost revenue. "Things were looking pretty dismal and bleak from an economic standpoint, and corporate travel had really fallen off," said Anne Tedesco, VP-marketing, North America. "We needed to remind people that there's great value and really good reasons for why people have always traveled for business."
That reminder came in the form of the Face-to-Face Program, an initiative directed at U.S. small businesses that includes a contest with a prize of free international travel, based on the premise that face-to-face business meetings are critical for business growth. The program, supported by a mix of advertising, debuted last year. This year's program launched in September, with a contest offering 250 winners free flights to London for a networking event and then to a destination of their choosing; entrants were invited to submit essays and videos explaining how the free travel would benefit their businesses at a microsite. Three of the winners will have the opportunity in February to pitch their global business plan to celebrity entrepreneurs and investors, such as Bill Rancic and Barbara Corcoran, to win 10 free British Airways flights to use over the course of a year. This year's program also includes an added educational component for entrepreneurs.
Prior to the program launch, British Airways commissioned with the Harvard Business Review to do a survey of their readership to "try to validate this claim that you really needed to go out there and do meetings face-to-face," said Ms. Tedesco, who assumed her current post in 2008 and oversees all areas of marketing in the U.S., Canada and the Caribbean and represents America on British Airways' global marketing team.
What was surprising was the overwhelming response from smaller businesses to what was intended to be a general survey on business travel. "Most of the people who participated in the survey were small-business owners," Ms. Tedesco said. "We were just taken aback and delightfully surprised about how hungry the small-business owners were for connections, for whatever information they could get. That's why we changed it this year to have more education for them as small businesses and doing business globally. Hopefully we're providing tools that they can take with them and also help them with their business going forward."
British Airways spent $16 million in measured media in 2009 and $3.4 million in the first eight months of 2010, according to Kantar Media. Its agency roster includes Bartle Bogle Hegarty as creative agency, Ogilvy, New York, as loyalty agency, TBWA for digital and Optimedia for media, Ms. Tedesco said.
Has the program made British Airways any money? It's too soon to tell, and there is a risk that it will end up falling flat, Ms. Tedesco said. Still, it's a risk she said the airline had to take.
Ad Age: What was it about small businesses that made them seem to be a good target for British Airways?
Ms. Tedesco: Their energy and passion really gave us insight into the small-business world. That was a surprise to us, and we used that as a platform to continue to increase engagement with them and ultimately drive revenue from small businesses. By running these competitions, we had them self select and come to us. In the downturn, we realized we should diversify our customer base. We were heavily invested in the corporate world. They still are there [and important to us], but we've also learned some things and saw that we should diversify our customer base and have a broader group of customers.
Ad Age: Is this the first big push for British Airways targeting that audience?
Ms. Tedesco: We have a loyalty program that focuses on small business; it's called the On Business program. It was more of a below-the-line loyalty program.
Ad Age: What was the inspiration for this campaign?
Ms. Tedesco: Its grandest hope was that we were going to help stimulate the economy by getting people out there traveling again.
Ad Age: How much has the whole initiative cost you?
Ms. Tedesco: One of the great things about the economic downturn is you're able to try some creative things that aren't questioned at every level that maybe they otherwise would be. We just figured, what are the assets that we had to help turn this around? And one of the assets was seats. There were three flights made up entirely of the winners, so there was a cost. It was a considerable investment, but we think it was the right investment at the right time.
Ad Age: What kind of risk was there in putting this out there?
Ms. Tedesco: Would credible people apply to the competition? That was a risk, but we were lucky and we got some really great people. [Another risk was that] the readership poll that we commissioned could have gone the other way. Certainly if people took the 10 tickets they won and didn't use them for business travel, that was another risk.
Ad Age: From a branding POV, any downside?
Ms. Tedesco: I don't think so. We have other ways of reaching the large corporations; we use our sales force to reach out to them and communicate with them. This was just a way for us to broaden our reach and reach people we weren't reaching to before. [And] each [winner's] story has a different aspect that really any business could apply.
Ad Age: How's all this making money for British Airways? What has been the ROI?
Ms. Tedesco: The winners [from last year's competition] are still traveling. They're still using their free allotment. When this is over, will they still be traveling with us? We have brand evangelists and the grant winners on these flights. It's hard to quantify, but we know with the market we've been trying to reach, we've got some real leverage. This is the kind of program with which there is a risk; the revenue may never materialize. We enrolled everyone in our frequent-flier program. And we are tracking their revenue and we are seeing a lift at this point, but we don't really want to talk about that number because it's a bit subdued because 100 of our best prospects are traveling for free right now. They're still taking advantage of the grant. It's too soon to tell. And that is our biggest risk, because we're two years invested in it. But we're confident we're on the right track. We'll continue to invest in the small-business market; we might do it in different ways. We will track the revenue, and if there's nothing there, we'll have to do something else, but it feels right.