Herb Kelleher on the Importance of Advertising to Southwest's Success
You've all heard that Herb Kelleher, the founder of Southwest Airlines, is a very funny guy. I can confirm that it's true (although his sense of humor must have been severely tested recently when part of the top blew off a Southwest plane).
Herb was in New York recently for his induction into the Advertising Hall of Fame, and I did a video interview with him.
After a rather flattering introduction, in which I said, "He understands the power of advertising better than any CEO anywhere, anytime," Herb stopped me. "Wait, before we go into this, I have a question for you," he said. "How many publications do you have?"
I told him 25, and he said he might go to the Justice Department "on my way back to Dallas and kind of fill them in on you." He said with 25 pubs, we must be a monopoly.
So I asked him if I could get off the hook if I fed him easy questions. He replied, "If you ask very easy questions, like 'Where were you born?'" So I asked him. And he answered Audubon, N.J. "If you were born in New Jersey, did you think of starting a Northeast Airlines instead of Southwest?" I persisted.
Herb got a little serious at this point. At the time, the Civil Aeronautics Board wasn't licensing any new carriers and the only ones you could start were intra-state airlines. So Southwest started out as a carrier within the state of Texas. But he had to litigate for four and a half years before Southwest could fly. "Then, after that, it was two trips to the Supreme Court in order to hold off the other carriers."
The other airlines "made me feel kind of, I guess you would say, lonely and unwelcome."
One of Mr. Kelleher's basic tenets was that the customer wasn't always right. "You can't honor your own people," he said, if you allow them to be abused. His credo is that employees come first.
Herb held monthly advertising meetings in which all the top executives participated, not just marketing people.
"I think the CEO's regular participation is helpful for a number of reasons," he said. "First of all, in terms of the congruency of the message to the outside world. Secondly, from the standpoint of saying to your employees what you want them to understand and believe in because they see and hear the ads as well, and you want to make sure that it's not inconsistent with your treatment of them. And thirdly, lots of times the CEO can authorize something that may start out as a joke or a lark."
Like the time Southwest's longtime ad agency GSD&M came in with an ad, as a joke, headlined, "Some airlines should have their asterisks kicked." And Herb said, "Run it."
Southwest's marketing people "are more the center of attention than they might be in other companies," Herb contends.
"And furthermore, a lot of other companies have account executives. And basically, in my experience, they're budget managers. You know, 'How much money are we going to get for marketing and advertising this year?' as opposed to really creative people. And we wanted to get all the creative people together and throw them into turmoil."
In Southwest's first year, the company spent 10% of its total capital on advertising, and in recession years Southwest raises its ad budget -- "because when do you need advertising the most? When times are bad," Herb said.
He affectionately recalled the times when Southwest would find out a competitor was going to run an ad, "and we would make an ad anticipating theirs over the weekend and have it on the air before they did. It was just wonderful." The head of the opposing airline said that Mr. Kelleher was "very unprofessional."
There's one fundamental ad mistake that companies have made over the years, Herb told me, "and that is that they over-promise."
"And there is one that I remember particularly. And that was Braniff. Braniff said 'If you've got it, flaunt it.' But they had the worst on-time record in the American airline industry."
Mr. Kelleher listed three elements in good advertising. "One, it's got to be true. And two, it should be a fair reflection of your attitude as a company. We've always been irreverent, and our ads have been irreverent. People enjoy that, and that is a true reflection of our company. And third, be consistent for a goodly number of years. I've seen great ad campaigns and then all of a sudden they disappear."
Sometimes, he said, "you get a new CEO who says 'There's one thing I can change immediately and that's the way we advertise. Gotta do something! Centralize, decentralize, change the advertising.'"
Mr. Kelleher said that what he's proudest of is having "total job security for our employees for over 40 years.
"I've spent my entire career staying out of their way."