Skift CMO Interviews: JetBlue’s Biggest Challenge Is to Keep Being Cool

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, Skift has launched a new series, this time focused on Chief Marketing Officers.

To better understand the big marketing challenges facing travel brands in an age when consumers are in control, Skift’s What Keeps CMOs Up at Night will talk with the leading voices in global marketing from across all the industry’s sectors.

These interviews with leaders of hotels, airlines, tourism boards, digital players, agents, tour operators and more will explore both shared and unique challenges they are facing, where they get insights, and how they best leverage digital insights to make smarter decisions.

This is the latest interview in the series.

Marty St. George, JetBlue’s executive vice president of commercial and planning, is a big fan of a certain Boston-area NFL team. Which may be why he quips that Southwest Airlines’ pervasive TV commercials on Sundays “ruined football for me.”

JetBlue does local TV advertising because it isn’t a national brand and some two-thirds of its advertising budget goes to digital marketing. “The beauty of digital is it is made for test and target,” St. George says. “The whole concept is you throw it all out there. You make the best media plan you can come up with.”

Interviewed at JetBlue headquarters within a week or so of Alaska Airlines announcing an acquisition of Virgin America, which JetBlue had eyes for, St. George discussed JetBlue’s biggest challenge (remaining a cool brand in the perception of the public), why the airline doesn’t need influencers and related marketing topics.

Skift: In terms of JetBlue’s marketing, what keeps you up at night?

Marty St. George: What keeps me up at night? It is funny, this is the type of place where normally you get one of those canned interview answers, like when someone asks your weaknesses, you say, “I work too hard. I care too much,” but I’ll tell you what really keeps me up at night. It actually goes back to 10 years ago, when I first came here.

When I was interviewing, actually with the CEO and president at the time, and they asked me what I was most afraid of with the job and I said … I had just finished one of the Malcolm Gladwell books and it told the story about Hush Puppies. One of the things in the Hush Puppies story was that New York was a city that loves fads, and fads come in and fads go out, and I said, “I just want to make sure that JetBlue is not the next Hush Puppies. I want to make sure that if I come here that — right now we were five, six years into the JetBlue story — when it’s 16 years, 26 years, whatever, I want to make sure we’re still just as cool.” My worst nightmare is that everyone here has built this great brand and I don’t want to be the guy to screw it up because, honestly, New York is tough on brands. People fall in love and they fall out of love, but luckily over 16 years, people haven’t fallen out of love with JetBlue yet.

Skift: How are you addressing that challenge?

St. George: How am I addressing it? I mean, first of all I think we all address it. There are 18,000 or 19,000 JetBlue crew members out there who deliver a good product every day, but we address it by continuing to innovate. Whether it’s the new in-carrier products we’re putting in the airplanes, whether it’s Mint, free Wi-Fi, things like that. You know, we always need to keep ahead. If you think about what JetBlue meant from a product perspective in 2000 to what we’re delivering in 2016 and beyond it is so much more advanced. So I think the ability to continue to morph our product and continue to make it better and better, then that’s going to keep us out there as still an innovative brand, and I think, again, it’s a tough market to do that so we can never rest on our laurels.

Skift: When you introduced the branded fares and were trying to figure out how consumers would react to them did that give you pause?

St. George: What really was the most revolutionary moment in branded fares was not the introduction. It was the research that told us we should do it because we had been doing the research every two years or so since the concept of ancillary fees came in. Because it’s very important to us to make sure that we were doing a good balance of delivering the best product we can for customers, but also maximizing profitability, because we have shareholders to keep happy too. When we first did that research, it was very clear that  bag fees were bad. It will shift share to companies that don’t have those fees and we sort of understood the bag proposition was something people really, really like a lot.

I think by the time we were doing that research in 2012, 2013, we’ve really saw things change and we couldn’t really identify any share shift from getting tied to not having bag fees. If I hadn’t been doing the research every couple of years, I wouldn’t have believed it, but we could clearly measure it before and then we really saw that customers accepted it as a normal course of business.

That was sort of the big, scary moment, which is when [we wondered] … are we really sure this research is right? We went and continued to check it and we looked at it in different ways. And it was really clear to us that there were pieces of the JetBlue product that were absolutely sacred that customers really, really valued. Things like the most legroom, things like TV that we could put our fingers on. But once we couldn’t put our fingers on the value of things like charging for checked baggage, that was a tough decision at the time. Again, without the research, we never would have made it, but we have to have a record behind things like this.

Skift: You said your challenge was to stay cool and you talked about you have to innovate, you have to refresh the product and you know you’ve done all those things, but strictly from a marketing perspective, how did your strategy change or how is it evolving?

St. George: The strategy has not changed dramatically. Our goal is we still want our customer to look at JetBlue as being different than other airlines. We do the research all the time about airline ads and if you take off the pictures of the airplane, take off the logos, take off the words and you put it in front of customers, they cannot tell what belongs to what airline because they’re offering pretty much of the same. In fact there’s one campaign out there –I won’t talk about who it is — but people actually think it’s a hotel chain in the ad because they don’t actually understand the differentiation. In fact, they can’t even tell it’s an airline. We never want to be in that situation. We want to make sure that our communications are very customer-focused. It’s not sort of talking about how great we are, how big we are in a given city or whatever. It’s more talking about what we offer for our customers.

Couple that with the fact that we want to do it in a way with personality. Brand personality is actually very important to us and I think our personality has been consistent really from the beginning of JetBlue. So I think the big challenge we have is we have to keep coming up with cool, innovative things that fit the personality. What was a great idea three years ago or four years ago is not innovative any more. You need to find the next great thing.

For example, we just did the “Reach Across the Aisle” campaign, where again we’re seizing on the zeitgeist of what’s going on in America. Could we get 150 people to all agree to go to the same destination. Things like that, where we put a JetBlue spin on some of the things that we observe out there — I think those are the things that we think are real opportunities.

Skift: You recently announced the launch of Mint service to several new cities and you still want — what you call — your core customers to feel the love. How does your marketing address those two different markets?

St. George: We’ve barely marketed the Mint product. That’s a product that’s really caught on by word of mouth and it’s been amazing to me how well it has done with very little advertising. This is a product, even if I take a market like Boston … We haven’t looked at any advertising in Boston yet.

Skift: When you say no advertising, you mean no advertising?

St. George: No advertising.

Skift: No digital advertising? Nothing?

St. George: No. We did for the very beginning of Mint but that’s two and a half years ago. For Boston, we’ve done none. Our load factors started out in the 9s [90-percentile] every single week we’ve flown. And that’s paid load factor. We don’t upgrade into Mint so if you’re in there, you’re paying a Mint fare. It’s worked extremely well.

I think what’s more interesting is the fact that the A321 aircraft with Mint on it was specifically designed to make sure that all customers get an upgraded product so it’s not just the Mint cabin, but the core experience is better too. It’s the new seating product, it’s the 100 channels of LiveTV with the 10-and-a-half- inch screens. It’s the marketplace a the front of the core cabins so you can go get snacks and drinks whenever you want. We wanted everybody who walked off that airplane to say, “Boy. I got a much better experience,” and you look at the numbers we’re seeing, as far as customer satisfaction, it is so much better on the Mint planes and on the all-core A321s than we see on the A320s.

Skift: The core customers have really been the target of your marketing efforts.

St. George: Absolutely, yeah.

Skift: What about Fly-Fi? It seems like it could be, or you argue it is, a really great differentiator. How does it fit into your marketing? How important is it?

St. George: In a lot of ways Fly-Fi is just the next chapter of the JetBlue story to make sure that whatever product we offer is going to be the best product out there. And I think that from the JetBlue’s perspective, having Fly-Fi out there and the ability to have such a good Wi-Fi product for free is consistent with the fact that we have free TV and we’ve had free TV since day one. It’s funny because we’ve seen the announcement from Virgin America that they now have a satellite-based product, but they are still stuck with the paid model. I think the free model actually works a lot better for us.

Skift: When Alaska’s acquisition of Virgin America was announced you didn’t sit back and rest. You came out with a new marketing campaign almost right away calling for JetBlue Virgins to try the airline. How did that campaign come about? What was your thinking behind it?

St. George: Well, listen when we went into this, we had conversations about what our possible future would be with Virgin America, we knew it might work out and might not work out, so in our heads, we had two paths. We always knew that transcontinental expansion was going to be part of our plan for 2016 because of the success we had in 2015 so that was always on the map. I think if we had consummated a deal with Virgin America, we might have had a certain set of plans.

Without them we had a different set of plans, which are the things we’ve talked about this week [when the deal was announced]. But we’re also out there being very aggressive as far as trying to capture the Virgin America customer. To the extent that there’s anyone who is that disgruntled customer, who’s a little bit nervous about what they love about Virgin going with Alaska, we’re there for them. Just to be clear, it’s already a much better product than Virgin America, so they sort of should of been flying us already, but we’ll make sure we give them a little extra reason.

Skift: Are you saying that the JetBlue Virgins campaign was kind of in the can as plan B in case …

St. George: You could say the concept was there. The concept that we were going to be growing transcon and we want to see customers from other airlines absolutely had been there.

Skift: Can you talk a little bit about your approach in terms of testing and learning from campaigns. Are you doing anything in that regard that other people aren’t? What is your approach?

St. George: I can’t speak to what other people do as far as testing and learning because I don’t always see it, but what I do know is one thing that’s a little bit different about JetBlue than a lot of other airlines is we’re spending a very strong majority of our revenue online. I think we’ve probably said that two-thirds of our ad spend is online. Actually that number is going up every year. It’s funny because a lot of our crew members will come up with stuff like, “How come I don’t see any ads?” “How come I don’t see this?” “I never see this stuff.”

Skift: On TV?

St. George: On TV.

Skift: I was going to ask you about that because Southwest is everywhere.

St. George: They are everywhere. Southwest has ruined football for me. I can’t watch a football game without watching it unfortunately. But we say to our crew members, “Listen. We’re spending it in the places where people want to buy air travel.” We know what websites to be on. We know what executions work. The beauty of digital is it is made for test and target. The whole concept is you throw it all out there. You make the best media plan you can come up with.

Skift: As opposed to TV?

St. George: It’s much easier than TV. You know within the first few days, what’s working, what’s not. The stuff that’s working gets more money. The stuff that’s not working gets less money. We have this down to a science. We have an ad agency and a media agency who have been doing this for us for a long time. They are fantastic. It’s like they’re us and we’re with them constantly, but this is the normal course of business for us. Every penny I spend online, I will track back and come up with a cost-per booking and I know that number goes up and down, what I can do to fix it. I compare that cost-per booking to what I pay a GDS (Global Distribution System) or an OTA (Online Travel Agency). It’s all part of distribution strategy for us.

Skift: There’s no plans to go bigger in TV?

St. George: We do some TV selectively. We’ve done TV in south Florida. We’ve done some TV in Boston. We don’t do national TV and I think part of the challenge is that we’re still not truly a national brand. Think about when you buy a national TV ad in the football game, you’re appearing in every single DMA (Designated Market Area). You’re paying money to be in Atlanta. You’re paying money to be in Minneapolis. Those are markets I don’t fly to at all. You’re paying for other markets that I have a relatively small presence in, so local TV actually works well for us and certainly your readers in places like Boston, south Florida and to some extent New York, they’ve seen JetBlue TV for sure.

Skift: Is anything changing about what channels are important to you in terms of Facebook or Instagram or any of those channels?

St. George: I think JetBlue is very early as far as grabbing onto social media. Obviously we have a very strong presence on Twitter. I think Facebook is probably number two for us. We’re looking at all the usual channels. At the end of the day, the customer’s going to decide where the best places are to communicate. We’ve actually had a lot of luck on Instagram as far as putting our organic content out there.

Skift: Does that translate into bookings or brand awareness?

St. George: Certainly in the paid places like Facebook and Twitter, we’ll measure and see what our cost-per booking is, just like we look at every other cost-per booking. We also spend a lot of time just pumping out content. One thing, if you think about social media in general, there are certain categories that customers love to talk about. They love sports, politics, entertainment. Travel is one of them that’s way up there. If you can get excited, shareable content, people will take it, they’ll share it and you know it’ll be amplified so I’ve got a team that just works on trying to come up with full content.

Skift: Are they working with influencers or are they just pumping it out themselves?

St. George: We’ve done a little bit of work with influencers and I’m not saying there’s no place for influence strategy, it’s not high on our list.

Skift: But they’re highly overrated?

St. George: I think the challenge for us is we don’t need to pay someone to say that we’re cool. People like JetBlue and they have a natural affinity for the brand. We don’t need to bribe people. Now there are certain places, certain countries or destinations where we don’t have a big market presence, where we have actually used influencers, but it’s not a core part of our strategy.

We have 35 million customers a year. Those are our influencers.