Final Presidential Debate Brings Fireworks and Priceless Vegas Publicity

Oct. 19 saw one of the most important events ever to happen in Las Vegas. It wasn’t CES, Garth Brooks at the T-Mobile Center, or the Mayweather vs. Pacquiao fight − it was the final presidential debate of the 2016 election. Regardless of how each candidate was seen as performing, and regardless of who will win on Nov. 9, the event is already a success for Las Vegas, both the brand and the community many of us call home.

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Las Vegas has never before been seen as a natural fit for this type of large political event. A U.S. president had never visited Las Vegas until 1935, when FDR opened the Hoover Dam. The area has been talked about as a host site for both the Republican and Democratic national conventions since at least the 1980s, but the city’s largest venue at the time, the Thomas & Mack Center on the UNLV campus, was considered not large enough.

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That all has started to change recently. Las Vegas hosted primary debates for both the Democratic and Republican parties. Nevada’s battleground-state status and diversity of economics, ethnicity and geography make it a valuable bellwether campaign stop and an attractive venue for candidates. While presidents are no longer a rare sight in Las Vegas, the debate was a unique event. It’s also the first collaboration between a university and a destination marketing body to hold one of these events. The LVCVA and UNLV partnered together throughout the process to secure and produce the Las Vegas debate.debate3

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Here are some key facts about the debate held on Oct. 19:

  • Two years prior to the event, potential host sites begin by getting their applications to the Commission on Presidential Debates, the nonpartisan body that organizes the general election debates. The criteria is incredibly strict and detailed, and the criteria for selection is 19 pages long.
  • 16 other communities applied for the privilege of hosting one of the three presidential and one vice presidential debates in 2016. Most of the debate sites have historically been universities.
  • Four host sites were chosen − The Wright State University in Ohio, Longwood University in Virginia, Washington University in Missouri, and the University of Nevada, Las Vegas. Wright State pulled out of the debates in July 2016, and Hofstra University in Long Island, N.Y., was chosen as a replacement.
  • Two of the 2016 hosts had held presidential debates before. Hofstra has held three consecutive presidential debates since 2008. Washington University has hosted five different presidential and vice presidential debates.
  • $85 million worth of worldwide publicity for Las Vegas was generated by September 2016, with the final number still being tabulated and expected to peak at well over $100 million.
  • 5,000 journalists from around the world traveled to Las Vegas to cover the final presidential debate, most staying for almost a full week. This was double the expected figure.
  • Three TV networks, CNN, Bloomberg and MSNBC, broadcast from the UNLV campus in the days leading up to the debate.
  • 6 million TV viewers watched the evening’s debate, the third most watched TV debate of all time.

The general feeling among political pundits and local observers was that the debate was a resounding success, and that the publicity value for both the university and the destination is priceless. With many experts predicting that we will be the site of a future national political convention − its further proof to what those of us who understand Las Vegas already know. Whether it’s the world’s best tourist destination, the center of most industries’ leading business events, or one of the most vibrant political scenes in the country − Las Vegas is always the right place to be.

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Worldwide Partners North American Region Conference 2016

It was, yet again, refreshing to join 50 other independent agency executives in Portland last month at the Worldwide Partners North American Region Conference. Refreshing because we gained and shared so much knowledge, but also refreshing because it reiterated how special being an independent agency is, and the value that independence is to clients.

WPI president and CEO John Harris said it best recently in his op-ed in the Drum, “The operational freedom that independent agencies enjoy better positions them to support the requirements of speed, agility and accountability – without sacrificing creativity, innovation and scale – that brand marketers are demanding from their agencies today.”

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One panel at the conference stood out to me – a panel of search consultants and consulting firms – where they focused on what a client wants from an agency in today’s marketplace. Themes were: relationships, people, culture, value add, business adviser, social content understanding and nimble. I couldn’t agree more, and further, it is supported in R&R Partners’ recent re-publishing of our “Who We Are” statement and focus of our 2017 business strategy:

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I am proud to work for a fiercely independent agency and be part of the Worldwide Partners independent agency network, where all the themes discussed with this esteemed panel are paramount in everything we do.

Additionally, the WPI NAR Conference had other great topics that we covered, from Instagram to innovation in OOH to the Contagious guys who strive to keep us relevant to exceptional Women in Advertising:

Thank you to WPI for keeping us, independents, relevant, inspired and refreshed!

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Cause Marketing 101

Social cause marketing—these are philanthropic buzzwords that appear to be sweeping companies and organizations in recent years. By the sound of it, it seems like something every organization should adopt. By the looks of it, it can do wonders for any business’ reputation.

But what is it exactly?

In short, cause marketing involves the marketing efforts of corporate entities, non-profit organizations, and other cause groups to achieve a mutually beneficial outcome. We’ve seen great examples of cause marketing in recent years with Dove’s Campaign for Real Beauty, Product (Red) for the Global Fund to Fight Aids, or Yoplait’s Friends in the Fight for Susan G. Komen.

So, what makes social cause marketing impactful? How does a group properly identify and adopt a social cause? How is it effectively marketed? I’ll illustrate three examples from R&R Partners’ Salt Lake City office that may help answer these questions.

Identify a need:

Utah Department of Public Safety – Highway Safety Office: Utah DUI Staycation Trolley Tour

Over the past 10 years, more deaths have happened on Utah roads on the 4th of July holiday than any other holiday. As Utahns began planning their Independence Day celebrations, we identified a need for our Utah Highway Safety client and began strategizing ways to position the “don’t drink and drive” message to best combat the deadly holiday. To encourage Utah drivers to make plans for sober driving, representatives from the Utah Department of Public Safety’s Highway Safety Office and the Utah Highway Patrol partnered with the Salt Lake Trolley Tour, a narrated sightseeing tour through historic Salt Lake City. We invited Salt Lake-area news outlets to join local law enforcement aboard the Utah DUI Staycation Tour and share the ride of lifetime—experiencing a DUI without the related costs.

The trolley tour took guests to various sites around downtown with a handful of out-of-the-ordinary stops. These stops included up-close and personal views of standardized field sobriety testing, the finest photo opps of a Blood Alcohol Testing vehicle (BATmobile), and a final stop at the jail administration building.

Our goal is not to stop people from drinking, but rather urge safe driving in situations where people might be drinking. If Utahans chose to drink on Independence Day, we encouraged them to make a plan—designating a sober driver or utilizing a ride share service. Otherwise, they could experience a summer staycation they wouldn’t soon forget.

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Select an impactful partner:

Slow the Flow, Save H2O + Garbett Homes: Flip Your Strip

R&R Partners has developed a strategy for cause marketing called the “Theory of Reasoned Action” which highlights four steps for effective social change:

  • Raise awareness
  • Change attitudes
  • Change intentions
  • Change behavior

A crucial piece of the Theory of Reasoned Action pie includes community mobilization—or the process in which individuals or organizations carry out messaging or activities to accomplish an initiative. To mobilize a community, it often requires strategic partnerships to communicate messages via innovative ways.

Recently, we partnered with Garbett Homes—a Utah homebuilder committed to sustainable and innovative building—with our client Slow the Flow, Save H2O (from the Utah Division of Water Resources). Our shared goal was to extend Garbett’s efforts to the exterior of the home by promoting a Flip Your Strip initiative for residential landscaping. This initiative encouraged the conversion of neighborhood park strips (the area of yard between the sidewalk and street) from sod to an attractive water-wise alternative saving up to 10,000 gallons of water per year, per household.

The Flip Your Strip initiative aims to build awareness in the community and state, but also highlight Garbett Homes as a leader and advocate for water-wise, sustainable exterior landscaping. The summer-long project culminated in a media event to educate press and the community on the intended initiative. For additional community outreach, local elementary Daybreak Academy was invited to participate in the event. Speakers educated students about the Flip Your Strip project, the importance of conserving water, and ways they could help make a difference for Utah’s future water needs. Each student walked away with a t-shirt and water-wise plants for a hands-on application of the initiative for the academy’s schoolyard.

Build engaging content + creative:

Utah Department of Public Safety – Highway Safety Office: St. Patrick’s Day Saints of Sobriety

Many people like to celebrate St. Patrick’s Day by raising a pint of their favorite beverage, but some press their luck by getting behind the wheel. To remind St. Patrick’s Day revelers to never drink and drive, representatives from the Utah Department of Public Safety’s Highway Safety Office and the Utah Highway Patrol visited Salt Lake-area news outlets to reveal a DUI-prevention message that encouraged bar and pub patrons to take a cab or ride with a sober lad or lassie.

Additionally, on the evening of St. Patrick’s Day 2016, law enforcement representatives partnered with Salt Lake City bars where local actors transformed into living statues of the “Saints of Sobriety”, including: St. Haylor of Cab, saint of wise travelers; St. Cristyl O’Clearhead, saint of responsible drinking; and St. Alweis the Appointed, saint of designated drivers. Those who made the pledge to get home safely received a coin from law enforcement representatives that, when deposited in the statue’s hat, activated an interactive performance by the living saint statue. To assist in additional awareness, each bar also placed a stained glass display at their location to communicate the importance of sober driving on Utah’s roads. The message was interactive, hands-on, and entertaining..

For the first time, Utah experienced zero alcohol related crashes or fatalities on St. Patrick’s Day. By identifying a need and a timely message, while channeling impactful creative, our message came to life with a fresh and innovative platform and likely played a role in preventing crashes and fatalities this year.

By identifying a need, selecting impactful community players, and building engaging content, any organization can adopt, and shape, an impactful cause marketing campaign. R&R Partners holds the tools and expertise to take key moments like each of the above examples and turn them into critical successes for any client.

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Future of Ad-Tech and Digital Marketing

I recently sat in on Denver Startup Week’s panel on “The Future of Ad-Tech & Digital Marketing.” Although this seminar was extremely startup-centric there were many interesting nuggets pertaining to digital marketing and ad-tech in general. The most interesting takeaways:

Threats to Digital Advertising:

Of the major threats to the future of digital advertising, the three most crucial according to this panel were Ad Blocker downloads, identity theft, and the concentration of power and assets by major companies.

1) Ad blocking software is becoming increasingly prevalent for online media users and these apps are not limited to desktops or laptops, but extend to mobile devices also. Ad blockers function in a way that keeps individuals from seeing ads therefore eliminating crucial calculable data for ad agencies like ours. However, as we move forward and even in pop culture we see that brands are starting to rely more and more upon social influencers as ambassadors or walking billboards for brands. Influencers can act as a way around ad blockers. It was noted that “nearly 86% of our decisions are made based off one’s peer group.” This may lead to social influencers, CEOs, owners, and other “spokesmen” appearing more frequently in branding campaigns, as body language is noted as one of the strongest reinforcements advertising can offer.

2) Identity theft and cyber security has long been an issue, but has become more prevalent as more personal information is stored and shared online and between third party entities. Living in a time of technology that allows one to check their bank statements and then go right to Facebooking or internet shopping on a connection that is most likely open and accessible to any computer savvy individuals puts all sorts of personal information at risk. This simultaneously creates the need for protection of personal information through encryption and other means not often understood by typical Internet users, but these sorts of measures are sure to become more normal to the average Internet surfer. This also creates an issue for advertisers, and their partners, who often rely on third party affiliates to purchase client targeting information. A cease or major reduction of the almost free flowing information gathered by third parties would create an interesting situation for advertisers, who may see this sort of crucial information experience high rates of inflation and an overall decreased quantity of this type of information in general.

3) We are seeing huge concentrations of power and assets in companies like Facebook and Google – which can end up being incredibly problematic. These companies already have so much client information and power that they nearly eliminate true competitiveness in the market place through the shear amount of customer monetizing information they have.

First Party vs. Third Party Data:

The speakers on the panel also relayed an interesting viewpoint on the relationship between first and third party data. They suggested that first parties should try to import or purchase third party data and augment it with their own rather than push their data to third party companies. Sometimes when giant third parties have customer data the risk of this information being shared grows exponentially, and this is where data leakage may occur to where competitors can see and use this data to their own benefit.

Quantitative vs. Qualitative Data:

The final discussion of the panel was the strategy of shifting from quantitative data to qualitative data. This seems counter-intuitive for buyers and sellers of media who simply want to reach the largest amount of viewers possible. However, it makes sense when considering the role of qualitative data as part of developing a real relationships with viewers and customers. It will become increasingly more important for companies to create campaigns that collect more data about the users while simultaneously becoming more engaging therefore helping to curve the perceived intrusive/invasive nature of ads.

 

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My Two Passions: Craft Beer & Marketing

The city of Denver recently hosted Startup Week, an annual series of seminars that not only showcases up-and-coming local businesses, but educates attendees on what it takes to be successful. I was fortunate enough to have an opportunity to attend a seminar that combines two of my passions: craft beer and marketing.

This particular seminar consisted of a panel representing three Denver-based brewing companies: Spangalang, Bierstadt Lagerhaus and Black Sky Brewery. These breweries embody the Denver craft beer movement, as they are small microbreweries that typically yield about 500 barrels a year. Breweries in this category are responsible for making Colorado the craft beer capital of the United States, and represent an industry that greatly impacts the culture of our society.

Passion Is Essential Ingredient

Although the topics of discussion remained heavily focused on the craft brewing industry, the panel’s insights and perspectives proved to be applicable to many industries. For me, the key takeaway is the importance of passion in your work. Despite entirely different backgrounds, each brewer has a love for their craft. Again and again, they reiterated that when nurturing the growth of a new business, without passion, one will fail. Believing in yourself is the key ingredient in the recipe for small-business success.

Crafty Marketing

I learned what type of marketing tactics each brewery found to be best suited for engaging new consumers. Interestingly enough – all three of the brewers agreed that they don’t invest many dollars, let alone interest, into traditional marketing. It was apparent that there was a stark contrast between the approach of smaller, artisan breweries as opposed to juggernauts such as Anheuser Busch or MillerCoors. While the latter has the capacity to inject a surplus of dollars into flashy, top-of-the-line advertising, the smaller breweries make better use of social media and word-of-mouth recommendations. They touched upon the importance of building communal relationships and representing themselves as local companies with a simple message: We make good beer.

Quality on Tap

To wrap up their thoughts, the panel made a point to establish the importance of quality when providing goods or service to the general public. It is imperative that if one isn’t making use of the highest quality, especially when it comes to effort (a personal export that drives success), one needs to reconsider whether or not to continue on that path. If a person can’t stand behind the quality of his or her work efforts, let alone the product delivered, then why do it at all? The concept came full circle, as passion and quality can repeatedly impact one another extensively.

Though our industries and day-to-day jobs may be entirely different, the path to success is very similar. Love what you do, and you will be successful. Maintain the quality of your efforts, and you will be proud of the result. Stand by your brand, and you will perfect your craft. Cheers!

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A Gay Millennial’s Message to Marketers

As an openly gay millennial, I’ve often struggled with fully embracing LGBT advertising messages that reduce a beautifully diverse queer community to two-dimensional stereotypes of fashionable, hard-bodied, blonde models. It’s a confession I’ve never been proud enough to voice until now, at a time of unprecedented strides in LGBT equality, and an equally strong movement within media and marketing to build support, advocacy and community.

In the era of declining print advertising and increasing digital banner blindness, it seems the most impactful way to reach the LGBT community is through 1:1 on site community building.

The shift in successful LGBT marketing is no longer just speaking at the community—but to actually become a part of it.

As a born and raised Texan, growing up gay was hardly something to celebrate. Even with a vibrant nightlife and active community, I always felt I was on the periphery of the mainstream. A member of an auxiliary group that brands tried to engage with using hunky shirtless models, homoerotic undertones and the occasional Pride flag.

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As well-intentioned as these efforts were, they felt half-hearted and inauthentic. Growing up with these messages made me feel even more secluded from the rest of the world. Was I fit enough? Did I dress well enough? Was I proud enough? Was I really a member of the community I identified with?

On June 26, 2016, exactly one year after the Supreme Court’s marriage equality ruling, I attended my first Pride Parade in New York City with my partner of four years, for my 27th birthday. It was the most exciting experience of my life because it was the first time I really understood what it meant to be a proud gay man.

I remember looking left to right on the crowded street in New York’s West Village neighborhood and my eyes filling with tears. Booth after tent after sign of countless Fortune 100 corporations, were affirming me. Accepting me. Embracing me. These brands weren’t trying to sell me their products; they were there as advocates and members of my community.

That unforgettable experience shaped how I saw my community and my perception of these brands. As a marketing professional, I took home plenty of notes on what it means to connect and build advocacy with the LGBT community and the values that successful brands shared.

Equal Representation

Trends within the millennial generation suggest that the best gay outreach messaging is equality messaging, not “gay-specific” messaging. Forty-seven percent of millennials are more likely to support a brand after seeing an equality-themed ad.

105644_1_busdev_culture-and-diversity-millennial-graphCommunity Building

My Pride experience didn’t make me feel like an auxiliary afterthought or an outlier. My partner, friends and advertisers all came together to not only include me, but to celebrate me.

Impactful LGBT messaging is true cultural immersion, and brands across the country have stood up to celebrate my community.

The Las Vegas Convention and Visitors Authority embraced 1:1 community building while at Los Angeles Pride this year with “Virtually Fabulous.” The on-site activation brought Las Vegas to LA Pride (and attendees to Vegas) with an incredible virtual reality experience featuring interactive videos that users could choose from a number of Vegas attractions, ranging from zip lining through the Rio to bottle service at Marquee.

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Authenticity

Another value that ran through the brands whose message moved me during Pride, was unapologetic authenticity. Honey Maid did this beautifully in its “This Is Wholesome” TV spot, where it took all the negative and disapproving messages and literally created a message of love.

Inclusivity

The strongest theme that tied all these LGBT advertisers together was a message of togetherness. At NY Pride, I felt like a part of an experience that united all sexual and gender identities. This sentiment is illustrated perfectly by a San Francisco Burger King with “The Proud Whopper” that proclaims “We Are All the Same Inside.”

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As a gay millennial, equality, authenticity, inclusion and community are all values that deeply resonate with me. Marketers meaning to connect with the LGBT community will be the most successful by joining our community and joining in our celebration.

 

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From Tech to Talent − Why Culture Matters

Recently, we highlighted Falken Tires president and CEO Richard Smallwood’s top strategies for employee engagement. The conclusion of this two-part series features ideas from Jill Elliott, R&R’s VP of people and culture. Jill’s impressive HR and organizational development background spans across multiple industries, including working with clients such as Disney, Expedia and Unilever. When one meets her for the first time, you instantly get her Bay Area tech vibe, coupled with an apparent passion for employer branding, and designing programs that build culture and employee engagement.

Jill and I sat down recently to discuss her strategies for creating a strong culture and putting people at the center of the organization. “Leaders should strive to cultivate a level of trust,” she remarked. “Having employees’ best interest at heart closely aligns with who we are and how we treat each other and our clients.” At R&R Partners, we use a specific language around the people and relationships who are at the core of what makes us great: “We value family and community above all.”who-we-areIt isn’t a bit ironic that my conversation with our ambassador of people and culture took place the day of the annual Media Tailgate. While we were talking about something Jill is obviously energetic about, teams of people were working together to put the final touches on our 11th annual event, which celebrates our employees and partnerships. One of the most enjoyable afternoons of the year, she was quick to point out that “all of our events are just ways to connect our people to the culture. These are not simply parties—they provide this important opportunity to connect.”

I asked Jill what she would do with an unlimited budget to drive even more employee engagement at R&R. Her response wasn’t what I expected, yet it makes total sense: “I would survey employees to ask them what they want.” Our discussion was interrupted slightly when a unicorn pool float came into Town Center during the Media Tailgate set up, yet after we had a Friday afternoon giggle, Jill impressed me with her final thought: “If you get the people part—the recruiting, the hiring, the development and the culture—right, everything else falls into place.”

 

 

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The Now of TV

It’s one thing to read the proclamation that “TV is dead,” and quite another to see that “dead” industry on display, vibrant and alive at this year’s Emmy Awards, which I happily attended. Leave it to a tech-infested strat geek to look past a pageant of literally the most beautiful people in the world and into the guts of “What the heck is really going on with TV these days?” Based on the Emmy festivities hosted by the Academy of Television Arts and Sciences, there seems to be more energy behind TV than any other medium, internet included. That energy is flowing on all fronts.

The Emmys 2016 Inspired “The Now of TV”
TV Helps Us Question and Better Understand Life?

Creatively, TV gives nothing away to motion pictures in terms of quality of its storytelling, performance and production. Despite the Kardashians, there’s incredible intensity behind social change and diversity. TV at its best breaks through the dogma, helping us question and better understand what we believe, who we love and how we look at the world. Heck, even the title sequences are breakthrough. My father was a TV “pioneer” back in the ’50s, and he’d be floored to see that the altruistic promise of the medium paid off as well as it currently has.

That’s because TV untethered from the tyranny of the three networks takes risks. Big time. As an example, actor Jeffrey Tambor and director Jill Soloway both won Emmys for Transparent, a show about gender roles told through a transgender woman that is produced and distributed by Amazon. Every part of that sentence was impossible to contemplate even five years ago. Amazon sells stuff, right? The shift away from network TV is complete. The three big “network” winners were HBO, Netflix and FX. HBO’s total of 22 awards was nine more than the traditional Big Three combined. More telling was the vibe. It felt less like an “industry event” and more like an edgy conference of creatives.The Emmys 2016 Inspired "The Now of TV"

The New Big Three

So what’s really going on here? Massive creative destruction where undeniable, fast-moving subversive forces are overturning a massive, antiquated status quo. Again, despite the Kardashians, TV is no longer a race to the bottom. It’s aspirational. That’s because companies like Amazon and Netflix don’t need to aggregate millions of viewers for their business models to pay out and therefore don’t need to produce vapid “common denominator” entertainment. They can afford to push the limits and do so at every turn.

A Refined, Boundry-Breaking Medium

Finally, TV untethered is TV redefined. For the past five years or so, clients, agencies and technologists have been wrestling with the shift from TV as a device and a medium, to TV as a loose descriptor for “long-form content.” That transformation is complete. The net of it is that TV is far from dead. It is still a premium reach/branding vehicle (time-shifted, IP-delivered or otherwise). But it’s also become a powerful culture shaper and newly minted hotbed of creative risk-taking and boundary-breaking content. Which actually defines what we should strive for, for our clients: brand-building, culture-shifting, boundary-breaking work.

 

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Employee Engagement: Tips from a CEO

Recently, Richard Smallwood, president and CEO of our client, Falken Tires, appeared in a Fast Company article highlighting the most creative people. Since then, we asked him, and our own VP of people and culture, Jill Elliott, to talk more about employee engagement. Richard, who is famous for taking top-performing employees anywhere in the world for dinner as a reward, shared his three top tips for engaging employees. The second part in this series will feature some of Jill’s thoughts on engagement, core values and culture.

When asked to share his strategy on engaging his employees, Richard shared these three tips: 

  1. “Create regular opportunities for your associates to provide unfiltered feedback to senior management.

    One practice I enjoy using to gain insight on how things are working within the company is to take a small group of four or five associates to lunch and ask them for ideas on how to make their jobs more efficient. The reality is that most executives really don’t understand the unnecessary obstacles or distractions that prevent our teams from executing optimally and, more importantly, we generally can’t provide the best solutions. The people doing the jobs know the roadblocks, and they usually have the best and most practical solutions for removing them. From my experience, our teammates have really appreciated playing an active role in the improvement process.

  1. “Regularly remind your associates of the importance of their specific role in the success of the company.

    It always bothers me when I hear one of our associates state that their role is not important to the success of the company. First, it tells me that we as a management team are doing a poor job of communicating to our teams what their roles are and how their performance can impact every other person in the organization. Secondly, it takes away the very important “pride of ownership” from that associate. Every human wants to feel that what they do is valued and appreciated by those around them. This is true with work, home, church and sports teams. How can we, as leaders, expect our associates to make the best contribution possible if they don’t believe that what they do is important?”

  2. “Create a culture where associates want to achieve great results, not just in order to survive, but in order to please those affected.

    This is often a tricky concept for me to explain, but it is a very important one for leaders to understand. In many work environments, the associate is driven to achieve the targeted result by avoiding failing and being fired for poor performance. This is performance driven by the fear of failure and the subsequent punishment. What I want to create in our environment is one in which the associate wants to achieve a great result, not in order to avoid being punished, but out of the desire to please those impacted by the result. A simple, likely politically incorrect, analogy would be that of a child proudly presenting their stick figure drawing to their parents and saying “look what I made for you.” This motivation is quite different.”

105440-01_employee-engagement-infographic
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An Ode to Low-cost Airlines Disrupting the Industry

A funny thing happened to me when recently researching airfares for an upcoming trip. While looking at cross-country flights on Southwest Airlines for a route that I have flown dozens of times over the past two years, I noticed a price I had not seen so low in years. Not marginally lower, but 33 percent lower. Surely it wasn’t a typo. Nor was it simply Southwest Airlines’ attempt at being charitable. So what is the explanation?

Frontier Airlines.

After doing some more research, I learned that Frontier Airlines recently announced it would begin servicing the exact route I was researching, beginning in the fall. Obviously, the additional competition caught Southwest Airlines’ attention, which, in turn, caught my attention. As any frequent traveler knows, unless you’re flying short flights to undesirable destinations, Southwest Airlines is no longer the “low-cost” carrier that propelled it to widespread success and adoration. In fact, I often find it among the most expensive options when searching for flights. This, of course, flies in the face of its advertising and endless email bombardment – but I suppose that’s an entirely different gripe.

Point is – despite the grief capitalism gets from folks such as Bernie Sanders – it does sometimes work perfectly. Why do you think we’re no longer paying $700 for microwaves or $599 for Blu-ray Disc players? More consumer options create competition, which puts pressure on an assortment of variables, chief among them, price. The airline industry is no different, although it is a very precocious industry with fewer choices than home electronics or automobiles or just about anything else. After all, the price on entry is tremendous and operations are significantly challenging. Yet, above it all, one thing remains true − more airline/flight options translate into lower costs for consumers.

This is how low-cost carriers such as Frontier, Allegiant and Spirit airlines are disrupting the industry and providing consumers with more choices, lower costs and more empowerment. Additionally, as consumer technology and customization have changed consumer perceptions, expectations and purchase habits, the low cost carriers seem to be ahead of the curve with their business models.

To be clear, the major carriers still vastly dominate schedules and routes due to overall fleet size. While Frontier, Allegiant and Spirit are all growing in size, their fleet sizes still pale in comparison. Each of the low-cost airlines has a fleet around or under 100 planes. Compare that to the size of Southwest Airlines (704) or Delta Airlines (1,426) and it’s easy to see why the little guys are still considered little. Very little. Yet, consumers are clearly catching on. Frontier Airlines’ net income rose tenfold from 2013 to 2014. Allegiant Air quadrupled from 2014 to 2015. And Spirit Airlines saw net income growth of 79 percent from 2013 to 2015.

The most common criticism of low-cost carriers is the “nickel-and-dime” approach they have with fees. It is commonplace for these carriers to assess fees for select seats, baggage and even carry-on bags. For consumers not informed or expecting this, it is seen as excessive and tawdry. However, there are two realities associated with this: the new normal and consumer empowerment.

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Airline fees have become the norm.
We were asked to feel sorry for major airline carriers when the cost of oil skyrocketed a few years back, causing them to saddle consumers with baggage fees. Yet, when oil prices tumbled to their lowest level in decades, the airlines forgot to raise their hand and inform us these fees were being taken away. Excluding Southwest Airlines, baggage fees are standard across the industry. And the latest JD Power report confirmed that American consumers have given up fighting them – and have become accepting of airline fees. Even fees for seating choices have become more prevalent. If you think the low-cost carriers are the only airlines charging fees for seat selection, you haven’t flown American Airlines recently. Flying a red-eye from Las Vegas to Miami, I was presented with additional fees for my seating options. Wanting to sleep on the cross-country, red-eye flight, I paid $37 (each way) for a window seat in the middle of the plane. Want extra legroom and to be closer to the aisle? That will cost an additional $58. This is why I am dumbfounded when I hear, read or see these types of nickel-and-dime fees being groused at regarding the low-cost carriers. They exist elsewhere. And they are higher than the $12 lowest fee charged by Frontier Airlines.

Consumer Empowerment
With the low-cost carriers, consumers are able to purchase lower fare tickets and then make their own decisions on how much more they want to spend. Here’s an example of how simple this is for me: looking for nonstop service for a trip August 25–28 from Las Vegas to Orlando, a round-trip ticket on Frontier Airlines was $215.10. A similar itinerary on Southwest Airlines was $419.96. That is a difference of $204.86, or 95 percent. Even once I pay for a seat ($12) and choose to check two bags ($70), there is still a difference of $122.86. But what if I don’t need to check two bags? What if I’m visiting a summer home stocked with clothes and don’t need to check a bag at all? Instead of having inflated costs and the illusion of “free bags” stuffed into my Southwest Airlines ticket cost – I get to make my own decisions. And in my opinion, that is the point with these low-cost carriers. Consumers are more in control of their final costs, and it doesn’t take much to avoid excessive fees. On a trip last fall with my two children, we chose a low-cost carrier and approached it with minimal intelligence. We checked one large suitcase, instead of three smaller ones. We selected standard seats. We also packed snacks and iPads into our backpacks for the plane ride, as “personal bags” are free, while carry-on bags result in a fee. The result? Overall ticket costs that were more than 60 percent lower than they would have been any other major carrier.

To be sure, these low-cost carriers have work to do. Customer-service scores rank low on Frontier. Spirit is the worst in the industry for on-time arrivals. And Allegiant has been questioned regarding the age of its fleet. But each of these airlines seems genuinely committed to improving on these marks. In addition, Frontier recently announced 42 new routes and Allegiant has plans to purchase newer Airbus planes. But the larger point is that these airlines are a net positive for an industry that hates competition (see: domestic carrier open skies agreement) and is slow to provide customers with the type of service we expect from other industries (imagine showing up for a salon appointment and being told there is a three-hour delay and switching to a different time will result in a $100 change fee and the difference in cost of the new stylist?!). Consumer empowerment and more choices are a benefit to all of us. After all, that is the hallmark of capitalism.

It’s also why you can purchase a Sony Blu-ray Disc player at Best Buy for $34.99 + tax.

 

Disclosure: R&R Partners has a current affiliation with Allegiant.

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