SpiceJet Airlines, The Overstay Checkout and Creating Value out of Nothing
Last year I was fortunate enough to be involved in the campaign that won the WARC Global Prize for Innovation – The Overstay Checkout for Art Series Hotels.
It was a great idea. Guests could stay free in their room until the next guest booked into their room arrived. This meant that people could stay free for a few hours, another night or even a whole week. It all centered around hotel capacity.
One of the questions we had to answer when writing the WARC award entry was on our definition of innovation and why we thought that our idea was innovative. Adam Ferrier (Naked Founder and Global Head of Behavioural Science – BS) and I came up with the following to introduce the section:
Genuine innovation in a marketing sense means creating something new that in-turn creates additional shared value, giving both the consumer greater satisfaction and the marketer increased profitability. To be able to achieve this via genuine product innovation without any additional costs is extremely rare.
By doing nothing but reframing existing resources the Overstay Checkout (amongst other things) did the following:
1. Created an added incentive to book a night
2. Created significant media and WOM interest
3. Created additional revenue from guests staying on using hotel facilities, and most importantly
4. Solved the problem of what hotels should do with unused inventory
What I loved about the Overstay Checkout was how obvious it was in hindsight. Unused rooms and customer grievances about check out times had been staring us in the face forever.
This week I learned how India’s SpiceJet airline have also created ‘value out of nothing’. They’ve introduced a product they call the Extra Seat Option (ESO) which allows people to pay a small amount for the added comfort of sitting next to an empty seat rather than leave it to chance.
When purchasing tickets, customers can elect to pay for the ESO and if there are any extra seats available on the day of the flight, they’ll be seated next to it. If not, then their money is refunded.
Like the Overstay Checkout, SpiritJet’s offer provides value on multiple fronts and does so by simply reframing the assets they have available to them at no additional cost to the airline.
As traditional forms of advertising become less effective and less efficient, marketers should be looking for solutions to client’s problems in a large spectrum of areas. Looking at the product should be amongst the first. I wonder how many more of these are out there?
