Wednesday, January 31, 2007

Technology-aided innovation

The supporting structure of many service-oriented innovations is technology. Just look at what the Internet has enabled, and we have only scratched the surface of this revolutionary technological platform. Many years ago FSCs were technological innovators with their development and implementation of CRSs, however LCCs have grabbed hold of the Internet and are using it to their full advantage, one example is easyJet's collaboration with Microsoft.

Microsoft has just released Vista, the next operating system for PCs. Microsoft realized that today's computer users are suffering from information overload. They are saturated with websites, programs, user IDs, etc. To alleviate this problem Microsoft has designed a "sidebar and gadgets" application. So, rather than opening an Internet browser to simply check the weather, stock prices, or your favorite airline's deals, the information is readily available on the desktop at all times (this is not new to Mac users). These applications can be customized and downloaded from numerous developers. This is where easyJet has stepped in. easyJet is developing a sidebar gadget that will allow users to perform functions directly on the desktop rather than requiring them to open a browser. This innovative customer-relations function will bring easyJet closer to end-users. Although other airlines can develop their own sidebar gadgets easyJet will benefit from its first-mover position. This not the first user-demanded direct link to an airline though, and easyJet is again getting inspiration from Southwest Airlines.

"Ding! You are now free to move about the country" is the tag line of Southwest, and the airline expanded on this marketing line to its Ding! program. Ding is a free, downloaded program available at since early 2005. Results show that users are less likely to cross-shop when they have initiated their own contact to the airline. There was 27% greater cross-shopping for travel in 2005 compared to 2003. In a little more than 1 year Ding had been downloaded 1 million times, and users are 45% more likely to book with Southwest via Ding than without. The program averages 5 clicks/user monthly and generated nearly $60 million in incremental bookings. With such impressive results it is surprising that other airlines did not initiate similar technological advances.

With the experiences of Southwest Airlines easyJet may well have gotten on the right track with this tool. It may take some time though for the airline to benefit from their cooperation with Vista. Most current computer users are satisfied with their operating system and will not rush out to purchase Vista. I just upgraded my own computer a few months ago and will not operate Vista until I decide to buy a new machine, and that will hopefully not be in the near future. Although, the sidebar and gadget application does sound interesting.