SAS is a Scandinavian airline with 70 years of history behind it. But it sees its future as a lifestyle company, looking at opportunities after customers take to the air and once they’ve landed.
Didrik Fjeldstad is the vice-president of brand and marketing at SAS, who joined last summer from another iconic Scandinavian brand, Carlsberg. CMO.com caught up with him at Adobe Summit EMEA earlier this year, and the first thing I asked him was to explain a little more about SAS’s vision for the future.
Didrik Fjeldstad: The future of SAS is definitely defined by a personal engaging experience, it is defined by being full of experiences relevant for people’s lives.
When you want to be a lifestyle company, it is incredibly important to understand the core challenge your loyal customer has. And our loyal customers tell us one thing—make their time matter. If we don’t make their time matter as an airline company in a lifestyle context, we become irrelevant, and we give them no reason for paying more for a product provided by SAS.
The customer journey for an airline is quite clearly defined: pre-travel, travel, and post-travel, and, from a brand marketing perspective, we’ve always been incredibly focused on the pre-travel phase, because you want customers in your store.
The opportunity for us lies during travel and, potentially, also after travel. The value of the flight seat is not looking as if it will be increasing in the coming years, and we can offer products outside of the seats such as related services, car rental or hotels, and dynamic packaging. You can even imagine we could be delivering your groceries, or watching your dog while you’re away on holidays, and all of these things happen after the travel or maybe three months before.
CMO.com: What are the business challenges that SAS is facing?
Fjeldstad: Like most airlines, SAS is in an extremely challenging situation. The market landscape is tough, we see oil prices go up, and we see new, low-cost carriers developing the market, being innovative, and, to some extent, redefining the way people fly today.
As for our customers, we see a huge difference in their consumption of airlines. It was always a high-involvement category, but, today, it’s almost becoming a commodity.
The willingness to pay is constantly decreasing, hence we’re seeing a decrease in the potential value of the seats, so we need to look at other revenue streams outside that—how we can generate attached and ancillary value, revenue streams outside of the actual plane, which is one of the biggest challenges we have as a company.
CMO.com: How do those challenges impact on your marketing strategy?
Fjeldstad: We separate the business challenges into two marketing-related challenges. We’re working at increasing the willingness to pay, so increasing the value of our product and our brand, and we’re working on increasing revenue.
If we start with increasing revenue, from a marketing perspective, it’s about return on marketing investment—how we can be efficient in everything we do, how we can centralise our processes and our strategies, and how we can orchestrate technology, services, and ways of working so that we become as efficient as possible with our investments.
The willingness to pay is driven by factors such as emotional attributes. When we ask our frequent travellers what drives their attitude towards us, and what are their underlying drivers of procurement or purchasing, it’s about soft values like being part of a community, like the joy of flying. And the overarching strategic marketing response to that is personalisation. We have to be able to meet our customers with experiences and relevant information wherever they are on the customer journey, from when they think of travelling, until they’re onboard our planes, and until we let them back in their homes.
SAS is going from a siloed approach to an integrated marketing communications approach. In essence, we’re trying to do two things. One is orchestrating all our channel spend and efforts from an omnichannel perspective. That’s by far the biggest challenge we have, and it’s a challenge for us as a team, for our technology partners, and for our creative and media partners, because it demands collaboration and the seamless flow of data, and the seamless integration of insights and analysis into execution.
The other thing is we’re fundamentally changing our way of thinking about marketing, from product and communication and campaigns, to the customer.
We’ve always been obsessed with customers at SAS. Jan Carlzon, our famous CEO from the ’80s and ’90s, said: “If you don’t work directly with a customer, you should work with someone who does.” That’s fine, and we are working on customer care, but how do you as a marketing organisation think cross-functionally about the customer from the very beginning? The way we’re addressing that is through creating cross-functional, agile teams with a mandate to deliver communication, campaigns, relevant information, and innovation, always directed at the customer, at the point of the customer journey where it’s relevant for them.
CMO.com: You talked earlier about loyal customers. How important is customer loyalty to SAS?
Fjeldstad: Customer loyalty in airlines is fascinating because it is very emotional, it’s very valuable, and it’s incredibly demanding. Our most loyal customers are incredibly loyal—they fly with us all the time, they spend their lives with us, they are married with us, and they generate by far the most value for us as a company.
Hence catering for our most loyal customers is one of our biggest and finest tasks. We have an expression, which is “imagined by travelers,” so the way we do product development should always start with our most loyal customers and how they imagine we should offer services for them. We start with the customers, we invite them in, we have Q&A sessions with them online, but also face to face, we see them in the hangars, we see them in the city spaces, and we try to involve them and take them with us on our journey to becoming one of the world’s best airlines.