Charge for Things That Enhance ...

Posted by John Todor on April 21, 2008

0 comments | 1951 reads

Airlines in the USA are having a very difficult time and are struggling to find a viable business model.

Then there is Richard Branson and Virgin America. He believes they can make flying fun again and still make money.

Here's what most of the big U.S. airlines are doing—deleting some services and charging as much as possible for the rest.

Virgin America approach is to charge for things that enhance the trip. Things like food. But even this they do differently. The video screen provide to each passenger let them order what they would like, when they would like it, and pay for it with a credit card. And, they never have to be disappointed that the airline has run out of an item. The on-board computer simply removes it from the menu.

Of course, there are other aspects of the Virgin America business model but what should be quite clear is—they see value from the customers' perspective. When a company does so, it spends much less effort and expense in trying to compete with competitors to win customers business—over and over again.

John Todor

John I. Todor, Ph.D. is the Managing Partner of the MindShift Innovation, a firm that helps executives confront the volatility and complexity of the marketplace. We engage executives in a process that tackles two critical challenges: envisioning new possibilities for creating and delivering value to customers and, fostering employee engagement in the innovation and alignment of business practices to deliver on the new possibilities. Follow me on Twitter @johntodor

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