Strategy: Delta Makes Its Inflight Product Better Even as Its Mileage Program Gets Worse
Delta offers a marginally better product in economy than United and American. And they offer a somewhat more reliable airline operation, too.
Sure SkyMiles is a dumpster fire. But American and United have just been copying Delta for years, playing the greater fool by giving up their only real advantages over Delta. So it’s not as though their mileage programs are real differentiators anymore (although I’d still prefer either one over Delta’s).
You don’t fly Delta because of the miles, but if you fly Delta you might as well pick up miles. Instead you fly Delta because you live in Atlanta, New York or the Upper Midwest or because they offer the best schedule and price on a given trip.
I want to like Delta the airline, but every time I consider them their executives make it impossible.
Their media shop undermines trust and their lobby shop picks our pockets.
And yet I have to respect what they’re doing getting their mainline aircraft to run with few cancellations and close to on-time, and by making modest improvements to the coach flying experience.
Delta is making a bunch of new investments in coach.
In November, the airline will be launching customer experience menu cards, which will include information on timing for each service and details on the inflight food and beverage offerings. In December, the airline will launch new upgraded cutlery in the Main Cabin.
Continuing the expansion, the airline will launch upgraded meals and new serviceware on long-haul international flights in mid-2018. The new collection will include newly designed trays and upgraded rotable serviceware that will complement investments in meal quality to provide customers a restaurant-style dining experience.
…In addition to the new serviceware and menus, Delta will be upgrading the Delta Comfort+ and Main Cabin pillows on all international long-haul flights, complementing other sleep experience investments the airline has made including sleep kits and upgraded blankets.
At its investor and media day American said that product investments can yield a long-term difference, because competitors will just copy. American knows this well, Delta makes an investment and they copy but don’t do quite as much. Delta clearly thinks that experimenting with customer service initiatives, finding out what works, what customers respond to in surveys and then with purchases, matters.
Matthew doesn’t think investing in an economy product makes business sense. I disagree.
To be sure, Delta’s efforts aren’t going to be as good in practice as their media team claims. Because their media team can’t help but overhype, which is why I don’t trust their releases. They undermine their own cause — just offer the facts on good initiatives and those initiatives would be more believable. Still:
- Investment in airline product can be a differentiator just like a frequent flyer program can be a differentiator. Delta doesn’t use its loyalty program as a differentiator, SkyMiles isn’t better than its competitors (cough). But the inflight experience can be.
- Investment in product has to be a part of an integrated strategy at developing a more premium brand, and each offering needs to be carefully tested with customers to understand what they value and what effect it has. Not all investments are worthwhile investments.
Delta claims to earn a revenue premium over its competitors, arguing customers will pay more to fly Delta. And stock markets seem to prefer airlines that treat their customers well.
It’s clear what kind of bet they’re making. They’ll experiment and try to find the things that will cause customers to prefer Delta overall and pay more to fly their product than competitors.
To be sure the differentiation is modest. But it’s the best we can hope for an in industry that’s so heavily regulated and protected from competition.