Spirit: The Airline America Loves to Hate

Spirit Air
Spirit Airlines – America’s first “ultra-low-cost-carrier” – has had an eventful 2010. Already notorious for its questionable ad campaigns and aggressive monetization strategies, the airline has recently pushed the boundaries in both arenas, and in turn faced seemingly constant and harsh public criticism. So why, amidst all of this, do we believe this just may be Spirit’s finest hour? By tapping into the clickstream activity of its two million person consumer panel, Compete has used Spirit Airlines as a way to validate the age-old adage, “there’s no such thing as bad publicity.”

uniques to spirit air

First, a look at the airline’s activities actually intended to bring traffic to the site. With a portfolio of past campaigns that includes “The Mullet Sale” and “Hunt for Hoffa,” advertisements that walk the line between clever and tasteless are nothing new to Spirit Airlines. But if attention at all costs is what the marketing department was aiming for, they seem to have hit their stride in recent months, primarily by combining relevant current events with a strong dose of shock value.

Spirit kicked off this stretch of controversial coverage for the brand in December with an opportunistic shot at the misfortunes of one world-famous golfer. Connecting a celebrity scandal to discounted airfares via the “Eye of the Tiger Sale” was admittedly a stretch, and depicting a crash in an airline ad did not sit well with many, but the carrier had a viral hit on their hands.

More recently, a mid-summer attempt to capitalize on one of the worst environmental disasters in U.S. history clearly hit a nerve. Featuring scantily-clad women lathering on “Best Protection” (BP) suntan lotion, Spirit urged consumers to “Check out the oil on their beaches.” The Florida-based airline defended its actions as a gesture of support for the coastal destinations to which it flies. Spirit eventually caved to the public outcry and pulled the advertisement, but not before it was featured on news coverage around the country.

Still, the splash caused by Spirit’s marketing efforts has paled in comparison to the constant, if not glowing, media coverage caused by the airline’s latest operational strategy decisions. Most significantly, an April announcement that the airline credited with introducing the now commonplace checked luggage fee would now begin charging up to $45 each way for carry-on baggage.
The mathematics behind the decision were sound: besides obvious auxiliary revenue, the new pricing structure allows Spirit’s base fares to undercut competitors, rising to the top of results pages on OTAs and meta-search sites like Kayak. Such a revolutionary move was sure to cause a stir, but even these kings of controversy couldn’t possibly have expected Congress to get involved.

Weeks later, another pioneering cost-cutting measure: non-reclining seats in Spirit’s newest planes. Again, clear financial justification for such a move (several additional seats on each plane) was met with an equally clear public outcry. Throw in a five day pilot strike for good measure, and Spirit has experienced a nine month period that could bring many airline PR professionals to tears.

Spirit CEO Ben Baldanza sees it another way. He has publicly acknowledged that the company’s “edgy, viral marketing” tactics have allowed Spirit to cut advertising costs as much as 80%. And, sentiment aside, these cost cutting tactics have come as Compete.com reports double-digit year-over-year traffic growth to the airline’s site.

Surely, however, this incremental traffic isn’t made up of serious flight bookers, is it? How realistic is it to expect that any of these antics are helping to drive shoppers through the booking funnel? As it turns out, pretty realistic. The graph below highlights Spirit’s ability to capture a greater share of airline website visitors, and more significantly, share of bookers during 2010.
spirit shares
Taken together, the combination of these and other marketing and operational strategies is clearly working for the airline. A logical next step would involve identifying those specific actions contributing most to the share shift. Specifically:
• Whether lower base fares have led to an increase in referrals coming from meta-sites and online travel agencies and any change in the conversion rate of these visitors
• The percentage of 2010 Spirit flight bookers that are new to the airline, and primary reasons for a brand trial?
• Which advertisements are attracting the curiously amused, which improve the likelihood of a booking, and which, if any, are doing damage to the brand
o And related, the airline’s advertising spend by month relative to a change in traffic/bookers
• Changes in loyalty to the airline, demonstrated via repeat bookings, following the implementation of changes that affect the flying experience

It is obvious that not everyone finds their actions amusing, but given the results, don’t expect Spirit Airlines to cut out the funny business anytime soon. And if the airline can take it one step further, using analytics to map the boundaries they constantly seem to be pushing, it seems fairly clear who will be having the last laugh.