Good .. I want a free pass.
cost to them zilcho basically.
Why? What loss did you suffer? Should they give out 2 million passes, or only one to you?
I wouldn't have thought that ozstamps was being serious in his comment, but it does give rise to how DJ can make good with their customers after a blunder like this. Particularly important is the legal issue arising where customers who'd specifically requested not to receive these kind of comms from them got it anyway (Spam Act 2003).
IMHO, if I had a senior position within their marketing structure and was in the thick of this, I'd be asking how I can make good with my customers after getting their hopes up - something which they don't seem to have done from at least what we have seen/know/heard/read so far.
If the mathematics stack up, what's the harm of handing out a bucketload of Lounge passes?
I wouldn't have the first clue as to exactly what the cost breakdown of a DJ lounge single entry pass would be, but I'd expect the amount to be apportioned between various functions including;
- leasing and operational costs (water, power, gas),
- staffing, cleaning and resources,
- payback on initial acquisition and establishment of site,
- inventory (printed materials, cleaning and bathroom supplies),
- subscription services (magazines, pay TV, performing rights licenses)
- catering (food service supplies, COGS)
- a portion towards planned maintenance and renewal of the asset, and
- the balance of course towards airline profit.
The cost structure and splits between these areas would likely be averaged on a location basis. So for the purpose of this scenario, they should be able to show that on average across the network that ~25/pax/visit is the real cost of using the lounge (they would have had to build the models when deciding costs for the annual membership, factored against increase load factors for the airline by members and average use). That would still give them ~10 in pure profit from each paid visit.
The data available should also be able to show how lounge usage/membership affects travel patterns, and delivers increased load factors for the carrier.
With those who don't fly frequently, it provides them an a reward and incentive to do so (increased load factors, on-board ancillary revenue). Common sense would suggest that not everyone on the lower tiers would use the pass within the validity period (which they'd be smart to shorten for these passes in such an instance), so their financial exposure is reduced.
Most of the people in the lower tiers I would expect more often than not fly with someone else, and of course they're not going to want to be left in the terminal - so there's some additional single entry passes purchased at at $35 a pop.
For silver members, they can call it a little Christmas present for their continued loyalty, and again that demographic is more likely than lower tiers to deliver load factor and ancillary revenue.
One other thing dolling out free passes does, is it provides those who've previously not experienced a paid ancillary product in the past the chance to do so. Done right, this could deliver a boost to annual signups for a paid product (revenue streams again) particularly from Silver members depending on their flight patterns.
It wouldn't be hard for a serious marketer, particularly at an airline like DJ with all new systems and a data warehouse that'll rival most banks to plug in some scenarios, gather data, run the numbers, and in a couple of hours and determine exactly what the cost/benefit of such an exercise might be. Do that as a Plan A, while still having the no-cost Plan B response ramped up in case the numbers didn't stack up.
From a PR/guest relations standpoint, even if they only dolled out passes to those who expressed their displeasure over the occurrence, it would stem and turn the tide of displeasure being expressed their way - which is what any good PR/media person wants to do with a bad story. By not doing something to placate their potential guests for a negligible cost, its brought out a number of influencers (Dan Warne, CRN, Mumbrella, et al) who will be expressing a negative view on the situation which only does harm to their brand image.
Here ends my dealing with bad PR + accounting + data analysis brain dump. I'll stick to flying QF though, because I already have status with them, and at least the bright, educated women I've had the pleasure of chatting to on a long flight with them have returned my calls and never stood me up for a dinner date
