On June 18th, 1971 a new airline operated its first flight.
The airline was based in Dallas. It was set up with a simple plan. To connect the Texas Triangle (Dallas, Houston & San Antonio) with a low cost air service. The original business plan was written on a restaurant napkin.
The airline is called Southwest Airlines. It is now the world’s largest low cost airline. In January 2020 it reported its 47th consecutive year of profitability.
How has it been so successful?
This is what Herb Kelleher (co-founder and longest serving CEO) told someone:
“I can teach you the secret to running this airline in 30 seconds. This is it: we are THE low fare airline. Once you understand that fact, you can make any decision about this company’s future as well as I can. Here’s an example,” he said.
“Tracy from marketing comes into your office. She says her surveys indicate that passengers might enjoy a light entrée on the Houston to Las Vegas flight. All we offer is peanuts and she thinks a nice chicken caesar salad would be popular. What do you say?”
The person stammered for a moment, so Kelleher responded: “You say, ‘Tracy - will adding that chicken caesar salad make us THE low fare airline from Houston to Las Vegas? Because if it doesn’t, we’re not serving any damn chicken salad’.
“We are THE low fare airline”. This is an example of ‘finding the core’.
Finding the core means stripping an idea down to its most critical essence. It means filtering out the less important things in order to focus on the most important thing.
Once you have found the core, decisions become much easier. Things that help you deliver the core are good. Things that don’t aren’t.
Why are we talking about this? Well, pandemics are pretty good at helping people find the core.
If you are a Government, your core right now is protecting as many lives as possible. So, you do the things that help you deliver this (lockdown measures, increased ICU capacity, public health communication). You do less of the things that don’t (Brexit negotiations).
If you are a grocery retailer, your core right now is ensuring people can get the food and supplies they need safely. So, you do the things that help you deliver this (prioritise availability, access to stores for key workers and vulnerable people, introduce 2m distancing rules, increase staff safety measures). You do less of the things that don’t (layout & merchandising changes, promotions).
If you are clear on your core, you can do more of the things that deliver against it and less of the things that don’t.
So, how can you find the core for the activities you do?
Shopper Marketing. Finding your core = having one central theme that each of your shopper marketing activities reinforces. This drives a much stronger connection to your brand and more consistency in your activities over time. A great example of this is Walkers. Their core = flavour. Then each activity has a different angle. The latest is Britain’s Restaurant Favourites – e.g. Pizza Express American Hot, Nando’s Peri Peri. Same core idea. Different execution. This sort of theming is something that many shopper marketing activities lack.
Promotional Strategy. Finding your core = having one clear objective that your promotional activities deliver against. It might be volume - Muller is an example of a brand that promotes to drive volume. It might be to drive repertoire. The lunchtime meal deal or the 3 for £10 in meat are mechanics that drive repertoire. It might be to drive sales BUT protect brand equity. Peroni is an example. They rarely go above a 10-15% discount, so they protect base price and brand equity. If you have a clear promotional objective, your promotions are proactive. If you don’t, they end up being reactive – based on what the competition are doing or what you did last year.
Portfolio Strategy. Finding your core = focusing on the stuff that sells. This means covering the key shopper needs in the category. It means prioritising leading SKUs. It means avoiding range duplication – within brands or across brands. It means each SKU standing on its own two feet, not being there to maintain shelf space or gain shelf space as part of an NPD launch. These are the SKUs that shoppers were most likely to buy in the pre-virus stocking up period. The stuff you’ve had to work hard to maintain availability on in the last few weeks. If you didn’t have availability challenges for a SKU, shoppers might be telling you something.
Proposition. Finding your core = what makes you different or better. Ideally, what makes you different AND better. Southwest were THE low fare airline. They did everything they could to deliver against that. Aldi want to have the lowest prices. Their business model is all about delivering this. Red Bull is about energy – it gives you wings. All their communication reinforces this.
Finding your core matters right now. But it also matters all the time.
Don’t ring your parents more because we’re in lockdown. Ring them more because you should.
Feel free to forward. Have a good weekend. Speak to you in a fortnight.