British Airways used to be “the world’s favourite airline” – not any more. Indeed, BA has been fighting hard against a huge onslaught of competition for several years now. Investors would tell you it has been doing well; indeed the share price has outperformed (until recently) the FTSE100 index. However, share price performance isn’t everything. Yet it is usually the only thing the board of big businesses care about. Sooner or later, focus on share price causes problems for a company. Why? Because it takes the “eye of the ball” of what the company should be doing – satisfying customers, not satisfying investors. Inevitably, if you look after your customers, you look after your investors.
But it seems that British Airways constantly takes its focus away from its reputation with its customers. Almost all the negative publicity about airlines is on BA. Quickly reviewing this weekend’s news would make you think someone has their knives sharpened against the company: the former Prime Minister of Bangladesh was refused a boarding pass to get on a BA plane; some travel agents have been boycotting BA over the fees they charge; tour operators in Malta are angry about BA remuneration decisions. And these stories are just in the past 24 hours. But another one has gained much more coverage – the fact that the cameo appearance of Sir Richard Branson (the owner of Virgin Atlantic airlines) in the movie Casino Royale, has been “edited out” of the version that is currently being shown “in flight” in BA planes.
When BA is in a reputation hole, it appears to keep digging. And surprisingly this has been happening for several years. Indeed, I know some people in the PR industry who use British Airways as their leading example of how NOT to do things. A couple of years back BA won a PR industry award for the “most column inches” achieved of any company in the world’s media. There was a big razzmatazz “do” where the award was given to the Chief Executive. Subsequent analysis of those column inches printed in newspapers discovered that the vast majority of them were negative.
So what does all this mean? For British Airways their constant “shooting themselves in the foot” makes it all the more difficult for them to do business. Every time a company gets bad publicity it makes the job of front-line sales teams harder. The boards of firms probably never notice this – they are too far removed from the sales teams. Only some months later do they notice dips in sales or increased costs caused by the need to advertise their way out of situations. So, the boards change the targets, get in new sales managers and “fix” the problem. But they should focus on reputation. Every time a company takes an action of any kind it affects reputation.
Did anyone stop to think for a second what would happen to British Airways’ reputation if they cut out Richard Branson from the in-flight movie? Would they have cut out every mention of him in the newspapers they provide on board? All across the Internet you’ll find plenty of column inches talking about this nonsensical decision (263 newspaper articles listed by Google News so far!). In the coming days and weeks, the competition to British Airways will find it easier to sell their seats – without having to do anything. Sir Richard Branson will receive even more positive column inches, making it even easier for Virgin Atlantic to sell its tickets. Meanwhile, British Airways sales teams and representatives will find it harder. Why? Because of the psychological reaction of people: why fly with such a petty company?
For the British Airways shareholder, there’s no problem. The size of the company means that it can pretty much buy its way out of the reputational hole it is in. But why put yourself there in the first place? And that’s the crucial question for anyone running an online business. Your reputation is the basis on which trust is formed. If you have a strong reputation – and everything you do in your business builds that reputation or knocks it down – you will do well.
Focus everything on building and maintaining reputation and you won’t suffer from what I call the British Airways effect. So, for every action you take online we all need to consider “what impact will this activity have on my business reputation?”. If there is any negative impact – don’t do it. Otherwise you create an environment in which it is harder for you to sell and easier for your competition.