Replay 034 – When baggage really flies
Filed in Business storytelling, Corporate Storytelling, Podcast
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Having a clear purpose will help the people in your organisation make better decisions. Listen to hear how Southwest Airlines increased its revenue by more than $1 billion by following its purpose.
Shawn’s on leave this week, so we’re re-releasing an earlier episode of Anecdotally Speaking! In episode 034, Mark shares the story of Southwest Airlines’ ‘Bags Fly Free’ campaign, which generated more than $1 billion for the airline.
The book Mark mentions as his source for this story is Selling with Noble Purpose: How to Drive Revenue and Do Work That Makes You Proud by Lisa Earle McLeod.
For your storybank
Tags: decision making, marketing, profit, purpose, revenue, values, values in action
This story starts at 00:43
Southwest Airlines operates with the purpose to ‘democratise the skies’.
A few years ago, the airline industry experienced a slump. For a time, most airlines were struggling to make a profit.
Southwest Airlines called in a team of consultants to identify opportunities to earn greater profits. These consultants worked alongside the company’s financial team.
The two teams found that Southwest Airlines could increase revenue by $350 million if they charged for bags.
The financial team called the company’s senior executives together and encouraged them to implement the idea. They were shocked when they gave them a firm ‘no’.
“Our purpose is to democratise the skies. If we charge for bags, we make it harder for people to fly, not easier, and we go against our purpose,” the executives told the financial team.
They decided to call in Roy Spence, who developed a ‘Bags Fly Free’ marketing campaign for the airline.
Less than a year later, the senior execs and financial team met again.
“We were wrong to suggest we should charge for bags,” the financial team announced, “The Bags Fly Free campaign has generated more than $1 billion for Southwest Airlines.”
Instead of increasing revenue by $350 million, they had by more than $1 billion. The airline had also gained market share. They made money because they stuck to their purpose.
Anecdote International is a global training and consulting company, specialising in utilising storytelling to bring humanity back to the workforce. Anecdote is now unique in having a global network of over 60 partners in 28 countries, with their learning programs translated into 11 languages, and customers who incorporate these programs into their leadership and sales enablement activities.