case study- sample 1

Virgin AmericaCASE STUDY

MARRIOTT CONFIDENTIAL AND PROPRIETARY INFORMATION

CASE STUDY: VIRGIN AMERICA PAGE 1

Virgin America is a U.S. airline that started asthe brainchild of British entrepreneur Sir Richard Branson. His goal was to reinvent U.S. domestic travel by offering customers a flight experience unlike any other. Branson envisioned a company where shiny new planes, attractive fares, top-notch service, and a host of fun, innovative amenities were the norm rather than the exception.

From this vision, Virgin America was launched in 2007. The fleet is equipped with inflight internet, mood-lit cabins, custom-designed leather seats, power outlets, and a video touch-screen at every seatback offering guests on-demand menus and countless entertainment options.

While federal regulations and oil shortages delayed Virgin America’s initial launch, the com-pany celebrated its 5th anniversary in 2012 and reached a major milestone, having served over 10 million customers. Over the past five years, the company has continued to receive accolades and travel industry awards, proving their leadership in developing a great customer experience and innovative brand culture.

Introduction

Founded: 2004 (launched in 2007)

Industry: Transportation; Commercial Airline

Headquarters: Burlingame, CA

Base of Operation (Hub): San Francisco Airport (SFO)

Current Airport Destinations: 22 in North America

Mission: To reinvent domestic air travel and make flying good again

Target Customer: The “creative” class: web-savvy professionals who tweet, blog and own the latest iPhone

Revenue: $982.4 million as of Q3 2012

Brand Highlights:

• Stylish design and innovative technology for upscale flying:

• Unique mood lighting that adapts to outside light

• 110v power outlets, USB and Ethernet jacks at every seat

• Deep leather seats in main cabin

• No black-out date frequent flyer program – “Elevate”

• The Red™ system is the most advanced inflight entertainment system in the sky, with seat-to-seat chat messaging, videogame library, on-demand food and drink ordering and digital shopping

• Planes named with # for Twitter

• Airport Lounge: Virgin America Loft

“From our 2007 launch, our mission has been to harness new technology and design to reinvent the flying experience and give guests more comfort, choice, and control”

-David Cush, President and CEO

Since launching in August 2007, Virgin America has captured a host of travel industry best-in-class awards, including:

• “Best Domestic Airline” in Condé Nast Traveler’s Reader’s Choice Awards for four consecutive years

• “Best Business/First Class” in Condé Nast Traveler’s Business Travel Poll for four consecutive years

• “Best Domestic Airline” in Travel + Leisure’s World’s Best Awards for five consecutive years

• #1 in Class in Zagat’s Global Airlines Survey in 2008, 2009 and 2010



Virgin America’s slogan is “A Breath of Fresh Air-line”, a mantra which guides everything the airline does.

Their focus is on creating a guest experience like no other, and to continuously learn from their guests what is working, what isn’t, and coming up with new “stuff” to make them say, “Now, this is how to fly!”

While the British-based Virgin Group does not control Virgin America, the new airline is still con-sidered a member of the Virgin Group family, with similar fundamental business principles, philoso-phies and advantages. They also have a similar approach to gaining momentum and sustaining success, and that includes networking and creating partnerships with the community and other com-panies. The company is eco-friendly with a strong commitment to governance and accountability to employees, stakeholders, and customers, whom they refer to as guests. All companies associated with the Virgin Group represent value for money, quality, innovation, fun and a sense of competitive challenge. An important core belief is that busi-ness must be a “force for good” and use its influ-ence and resources to help find solutions to some of the world’s major issues.

It is clear that all aspects of the Virgin America brand reflect these qualities. The culture is one of fun, style, and resourcefulness, encouraging out-of-the-box thinking and risk-taking to achieve corporate goals.

Given its edgy new character, the company is up-front about the fact that being on the Virgin Team is not for everyone – even stating that on their careers webpage. According to the site, the person who can get the job done is “…someone creative, compassionate, patient, visionary, spontaneous, articulate, attentive, ambitious, fun, humble, brave,

The Foundation sympathetic, unflappable, dedicated, curious, pas-sionate, energetic, inspiring, and trustworthy. It’s the belief in one’s own potential that separates the great from the unmemorable.”

New hires go through a rigorous two-day orien-tation process, much of which is spent on the streets of San Francisco in a frantic scavenger hunt for city landmarks, Virgin America billboards and other destinations. Often the top score goes to the teams that find the city’s mayor. The exercise not only introduces new staffers to Virgin’s creative problem-solving ethos, but also teaches them the kind of diplomacy required to handle VIPs they might run into on the job. The teammates have to research the mayor’s schedule, persuade his office staff to help them, and when they do track him down, e-mail a group photo to headquarters.

Virgin America presents a stand-out style that is fresh and innovative – from their airplanes to their airport staff and flight attendants. The cabins are bathed in custom mood lighting; leather seats are deep and comfortable. Video touch-screens, power outlets and USB jacks are available at every seat. The company partnered with Banana Republic in a “project runway” competition to create sophisti-cated and fashionable uniforms that reflect Virgin America’s signature style.

With the goal of bringing back pre-flight excite-ment and style, the company launched its first airport Lounge, Virgin America Loft, in 2012. The lounge replicates the sleek modern design and up-scale experience presented onboard their planes. Even though they are fairly new to the market, Virgin America’s brand name is strong due to the association with the founding company. Everyone at Virgin America is committed to actions that exemplify the Brand Pillars:

• Advocacy: Think of the guest first when acting



• Innovation: Do it better than the other guys, in whatever we are executing

• Vibe: Do it with personality and wit

Virgin is heavily focused on creating awareness of its distinctive brand through social media. The strategy is a low-cost, immediate way to spread the word about promotions or other company news and gives booked and potential guests al-ternate ways to communicate with the airline. The results achieved from this strategy are key compo-nents of the Virgin America guest experience:

1. Know Your Audience. Virgin America’s target guest is tech-savvy and adventurous. The company relies heavily on social media and technology, not only as the latest and great-est communication strategy, but also to attract new guests. Using the most current social me-dia platforms like Loopt, Foursquare and Klout, they drive awareness and sales. They often offer prizes to customers who check in using Facebook Places or Foursquare. Twitter is such a strong component of their strategy they even have planes named with the hashtag. Virgin America was the first airline to offer a deal through Groupon.

2. Know Your Voice. Virgin America’s voice is ir-reverent, sassy and a bit cheeky. “In everything we do, we try to maintain that enthusiasm and tone,” says Jill Fletcher, who manages the content calendar and makes sure the brand is consistently active across all social media platforms.V This voice is heard loud and clear in the company’s entertaining YouTube videos. They also strike winning chords creating part-nerships with others, such as Boo, the popular World’s Cutest Dog.

3. Allocate more resources where you find success. As a relatively small company, the advertising budget isn’t that big, so they rely on new and interesting things to amplify word

of mouth buzz. On the day Virgin America became the first airline to have fleet-wide Wi-Fi, the airline did a Skype chat call with Oprah Winfrey for her “Where in the Skype Are You?” show. Twitter has proven to be a high value vehicle for Virgin to facilitate two-way conver-sations between the brand and its followers, giving them the ability to offer deals and tips in a quick and easy way. They’ve launched suc-cessful Twitter scavenger hunts, and short-term promotions like #FlyMoreGiveBack, from which $5 per booking was donated to an education charity.

4. Don’t be afraid to experiment. When Virgin America started flying to two new desti-nations in Mexico, it partnered with Loopt for a 2-for-2 Taco and Tickets promotion, inviting people to search for branded taco trucks in San Francisco and Los Angeles. And, if guests checked into flights using Loopt, they received a digital promotional code for 2-for-1 tickets to Mexico, and 2 for $1 tacos. Proceeds from the promotion were donated to a canine rescue center for Chihuahuas, and resulted in the fifth highest sales day in 2010. The Virgin team’s sense of fun paid off again when they partnered with AwkwardFamilyPho-tos.com to create a photo contest in conjunc-tion with the airline’s new service to Orlando. Online votes were cast and the winning family got to fly the inaugural route with Branson himself.

Another key element of Virgin America’s market-ing strategy – and their success – is Elevate, their no blackout date frequent flyer program. Elevate is a flexible real-time program, making redemption transparent and easy. By 2012, membership had grown to 2.6 million.



Virgin America is 100% dedicated to creating a unique customer experience.

When you step onto a Virgin America plane, you are welcomed by mood-lit cabins, custom-designed seating and the most advanced inflight entertain-ment system in the skies.

The main cabin boasts deep, comfortable leather seats, with a pitch designed to enhance travel com-fort. First class guests enjoy white leather seats that offer a steep, relaxing recline. All guests enjoy soft mood lighting with 12 shades that adapt to outside light.

The Red™ inflight entertainment system allows guests control over just about every aspect of their travel experience. Along with wireless internet that allows guests to browse, post, tweet and email, each seat is equipped with power outlets, USB ports and Ethernet jacks. Groups and families ap-preciate the seat-to-seat chat messaging capabili-ties.

Red also allows guests to manage their own food, snack and beverage orders with a tap of the seat-back touchscreen. They can even order for a friend or family member seated in another area of the plane.

The entertainment system provides access to more than 25 on-demand movies and 24 channels of live TV. There is a kids’ entertainment section with

parental controls, and a videogame library. The MP3 library contains 3,000 MP3s with the ability to create personalized playlists. The system even offers digital shopping.

Because Virgin America carefully manages each guest touch point, by the time guests board their planes, they are already primed for a great ex-perience. Chances are they booked their flights through an innovative media channel or responded to a fun new promotion. These same technologies enable the company to respond quickly to posts and tweets, before, during or after a flight. That strategy paid off in the wake of a challenging res-ervation system upgrade in 2012, when Virgin staff members were able to respond personally to every tweet received from frustrated passengers.

Wired Magazine has called Virgin America planes “multimillion-dollar iPods.” While some travelers may not appreciate the techno-perks, the airline has definitely hit the mark with guests who de-mand constant connectivity and communication. The environment on the planes and in the airport lounges set them apart from all other airlines. But it is the resourcefulness of the Virgin Team that cre-ates anticipation and excitement among its follow-ers who can’t resist Twitter promotions like #Flythe-beard, where they were challenged to spot flight attendants at a San Francisco Giant’s game who were wearing beards. Now that’s truly unique!

The Customer Experience

Standing Out

References• “ActualControlofU.S.AirCarriers”(Supplementalnoticeofpro-

posedrulemaking),71FR26425,May5,2006.

• http://therealtimereport.com/2011/09/19/virgin-americas-social-media-strategy-takes-off/

• http://www.cbsnews.com/8301-505125_162-51396436/virgin-americas-guide-to-not-to-screwing-up-customer-service/

• http://www.youtube.com/watch?v=qwaptht9WYg

• Frombizjournals.com:October11,2009article:VirginAmericatargets‘creativeclass’withsocialmedia

• *http://www.virginamerica.com/inflight/whats-on-board.html

• **http://www.forbes.com/sites/carminegallo/2011/12/22/after-snafu-virgin-america-rebuilds-trust-one-tweet-at-a-time/
