How Lufthansa is pushing its premium credentials to beat off competition from low cost airlines

German airline Lufthansa last week revealed an organisational restructure to allow it to better strengthen its portfolio of airlines, including German Wings, to meet increasing competition from low-cost airlines. The Drum caught up the group’s vice president of marketing, Alexander Schalubitz to find out how Lufthansa is pushing its premium credentials and improving its mobile strategy to beat off competition from cheaper rivals.

The Drum: How has the changing digital space impacted Lufthansa?

Alexander Schlaubitz: Things are changing all the time and they’re changing fast and I think that’s a really good thing. One of the things we’re just now culturally getting accustomed to is getting much more agile and that we have to cultivate a totally different way of approaching things. We’ve also now just now developed a couple of core beliefs like what should digital always be able to do? One thing is ‘Happy Next’; some next action that somebody can take as a result of any digital interaction with us. Or to be natural so that we don’t necessarily force digital on to them we only use digital in the most comfortable delivery point for the consumer.

How has digital impacted your approach to marketing?

One of the things that has been a very big shift, is a strict focus on human centricity. So we are trying to make sure that we put people and their state of minds at the heart of everything we do and that’s permeated out into our entire marketing but it certainly started with digital because that’s where it’s the most responsive and the most necessary. The ripple effects are really big for us right now and we’ve started to do a little gimmicky thing to write advertising with a double ‘d’ which is supposed to say that every touchpoint we have is supposed to add value to our lives and that is certainly something that was born out of a digital perspective.

How difficult is it to compete in the airline space and how do you look to set Lufthansa apart via marketing?

It’s hard, it’s very hard. We are premium and we look at ourselves as a premium airline so we are trying to make sure that everything we do is premium and digital also has to be premium as part of that strategy. So we try to deliver better services, better information and give people more options early on in their journey so we are respectful of their time. We’re also trying to enrich their travel experience through value added content so they can take even more out of a particular journey because we think journeys of all kinds have this wonderful transformative power within them and if we can help people get that out of a trip that is something that caters to a premium status of our airline.

What kind of content?

We have a lot of content that is travel related obviously, we have a lot of content that takes the perspective of our crew because we think that our crew are the best – they travel all the time, they know the ins and outs and they can give even deeper insights in a destination than a travel companion of any other can provide.

Can you update us on your mobile strategy?

We have a threefold strategy – one is we are trying to create transactions which is still not something that we are doing at the largest scale. Booking a trip is still not something people will do on the fly on mobile but we are starting to see an upsurge. The second thing is that we are trying to reduce frictions, so we are trying to use mobile as one of the devices that can help people to navigate. The third piece is that we are trying to give inspiration so whilst people are on the go we are trying to deliver pieces of content that will allow them to escape, start fantasising and initiate the first thoughts about a potential next trip.

What are the biggest challenges in the mobile space?

I think it’s trying to make sure that we are contextual. So we have a lot of content but making sure that we are delivering it out at the right time, in an efficient manner to the right person, is something that we haven’t cracked.

You’ve recently had a reshuffle within the organisation to divide your portfolio inot three separate areas. How will this impact the marketing?

We don’t think it is. Marketing has been one of the areas that we actually think needs to be handled airline by airline because they have different value propositions and they represent different things to different people’s hearts and minds. We keep those separate because we think that each and every one of them adds to the portfolio.

Do you think the reshuffle Might help you competitive with low cost airlines?

Sure, we are trying to build out a larger portfolio because the category has evolved to a point where there are so many different need states that people have. We want to broaden our offering to make sure that we are hitting as many of those needs as possible through the portfolio that we have.

What is your take on programmatic and is Lufthansa approaching it?

We have to do it, it’s one of those things like brushing your teeth [but] we need to get better at it. That and attribution marketing are really large issues that we are trying to confront – how do we better comprehend how we can actually get the right transaction and do it in an efficient way. We are very dedicated and I think it’s something a lot of people are recognising is fundamentally important and we need to surround ourselves with the right players and start deploying it. But its iterative, it’s not something that we are able to flip a switch and be able to do we are going to have to work at it.

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