Latest news with #consumerpsychology
Forbes
29-05-2025
- Business
- Forbes
Southwest Airlines Just Made A Costly Mistake In Consumer Psychology
Southwest Airlines is changing its brand identity as it begins charging for checked luggage. Starting Wednesday, Southwest Airlines began charging $35 for the first checked bag and $45 for the second. It's the end of an era for the airline that trademarked "bags fly free" and built decades of customer loyalty around that simple promise. Southwest executives have been under pressure to boost revenue by adopting bag fees, assigning seats, offering premium seating, and other practices used by their bigger competitors. For a spreadsheet-wielding accountant, these moves may make perfect sense. But, by violating fundamental principles of consumer psychology they might backfire in a big way. I couldn't find a chief behavioral officer at Southwest. If they do have a behavioral science team, Southwest executives almost certainly ignored their advice in implementing the new luggage fees. Behavioral economists know that people feel losses about 2-3 times more intensely than equivalent gains. Southwest customers aren't only seeing a $35 change in the cost of flying from point A to point B. Rather, they're experiencing the loss of something they already "owned" in their mental accounting. The well-established endowment effect says that people value something they currently own more than the same exact thing when it's not theirs. Yanking away the free bag benefit will impact Southwest's customers more than an equivalent fare increase. Robert Cialdini's consistency principle tells us people try to align their actions with their stated beliefs and with their past behavior. As humans, we are more likely to trust people who behave in a consistent way. Southwest literally trademarked "bags fly free" and built entire advertising campaigns around being different from other airlines. This major reversal is inconsistent with its long-established brand image. The change creates cognitive dissonance that damages trust far beyond the fee itself. When customers chose Southwest, they were choosing to avoid exactly this kind of nickel-and-diming. Now they're questioning what other promises might be broken next. Here's where Southwest's move gets particularly dangerous. Customers are 'anchored' to Southwest as the "no-fees" airline. That $35 charge feels disproportionately expensive because it's compared against their mental anchor of $0, not competitors' similar fees. (Anchoring works both ways. If, for example, an airline had charged $60 per bag for years, setting the price at $35 would seem like a bargain.) Even though Delta, United, and American charge similar amounts, Southwest's fee will feel worse because of the broken expectation. Southwest's own research paints a worrisome picture. In September, they projected gaining $1-1.5 billion from bag fees but losing $1.8 billion in market share. Despite this, they proceeded anyway, pressured by activist investor Elliott Investment Management's nearly 10% stake and the demand for immediate revenue increases. The early warning signs are already appearing. Social media backlash has been swift and brutal. One Instagram post about the change received over 14,000 replies – roughly 50 times their normal engagement. The sentiment isn't pretty. Mental Accounting Disruption. Customers budgeted Southwest trips assuming free bags. Now they're forced to recalculate total trip costs, potentially discovering Southwest is no longer the cheapest option when fees are included. Social Proof Cascade. Early complainers are triggering viral negative word-of-mouth. The "Southwest is becoming like everyone else" narrative spreads quickly because it violates their core differentiation. Choice Complexity. Southwest customers chose the airline partly to avoid decision complexity. Adding basic economy tickets, boarding priority options, and fee structures creates the exact confusion customers fled other airlines to avoid. Delta CEO Ed Bastian immediately recognized the gift Southwest handed competitors: "Clearly there are some customers who chose them because of that bags fly free policy. Now clearly those customers are up for grabs." Both American and Delta announced special, short-term status matches to try to siphon off Southwest's most loyal customers. United continued to offer its previous status match for Southwest flyers. Don't Break Your Core Promise. If your brand's fundamental value proposition is built around a specific customer benefit, changing it requires extraordinary care. Southwest's "bags fly free" was more than a policy, it was their identity. Understand Your Customers' Mental Models. Southwest customers weren't just buying transportation, they were buying simplicity and transparency. Breaking that mental model affects the entire relationship, not just the specific transaction. Calculate the Full Cost of Change. Southwest's own research showed the policy change would lose more in market share than it gained in revenue. When behavioral science principles conflict with financial pressure, ignoring the human aspects of your customers rarely works. Southwest projected $1.5 billion in annual bag fee revenue. But if their own research about losing $1.8 billion in market share proves accurate, this could become a textbook case of how short-term financial pressure can destroy long-term brand value. The real test isn't whether Southwest can collect $35 per bag. It's whether they can keep collecting anything at all from long-term, loyal customers who now have plenty of motivation to look elsewhere. It's too soon to tell how all this will shake out, but it's clear Southwest has placed a high-risk bet that they'll retain most of their customers despite the changed brand experience.
Associated Press
27-05-2025
- Business
- Associated Press
Vibrant's Latest Release, 'Advertising Essentials,' Delivers Practical Tools for Navigating the Future of Marketing
From consumer psychology to high-impact ad models, this book by renowned marketing strategist Maria Isa offers a clear roadmap for modern advertisers. BROOMFIELD, CO, UNITED STATES, May 27, 2025 / / -- Vibrant Publishers is pleased to announce the release of Advertising Essentials You Always Wanted to Know (Advertising Essentials), authored by seasoned marketing strategist Maria Isa. Advertising Essentials is a practical guide designed for entrepreneurs, leaders, and professionals to understand what makes advertising work in today's fast-paced digital world. The Advance Review Copy of the book is now available on NetGalley for interested readers. This book explores how advertising connects with audiences and drives real results. Combining fundamentals with cutting-edge facts, Advertising Essentials is a go-to source for learning the art and science of advertising. Readers will find useful strategies for crafting campaigns that cut through the noise and make an impact, no matter the platform. Key topics of the book include insight into the psychology behind buying decisions, advertising models used by top agencies, the role of artificial intelligence, automation, and predictive analysis, social media tactics that deliver, how to measure ad performance, and boost Return on Investment (ROI). Advertising Essentials gives readers the strategies, frameworks, and real-world knowledge to create advertising that persuades, engages, and sells, regardless of their budget or experience level. On the occasion of the book's NetGalley launch, author Maria Isa said, 'I've written this book to bust some myths about advertising and show how it works in real life. It's not necessarily about flashy billboards or funny slogans. Advertising is a well-thought-through mix of psychology, storytelling, data, and technology. The aim is for readers to understand how all these aspects work together, avoid being overlooked, and produce adverts that drive engagement, conversation, and action.' Keeping up with the industry is old news. This book will place readers at the forefront of where the industry is heading. Readers will get a deep dive into engagement and key performance indicators to reveal what's working (and what's not). They will learn the foundations of ethical advertising that help build credibility while balancing persuasion with transparency. Last, but certainly not least, the book considers the future of machine learning and hyper-personalized targeting. Advertising Essentials You Always Wanted to Know is part of Vibrant Publishers' Self-Learning Management series. The Advance Review Copy of this book is now available for interested readers on NetGalley! Read and review it here before its release. About the Author Maria Isa has a rare talent for understanding brands. As a deeply informed, results-driven marketing strategist for some of the world's most recognized companies, such as Unilever, Nestlé, Colgate-Palmolive, and Mondelēz, she has contributed to campaigns that have impacted on how millions interact with household names. Maria now lives in Dar es Salaam, Tanzania, where she consults local and international companies on how best to navigate changing marketing landscapes. About the Self-Learning Management Series The Self-Learning Management Series is designed to address every aspect of business and help entrepreneurs, leaders, and professionals learn essential management lessons. Each book contains fundamentals, important concepts, and standard and well-known principles as well as practical ways of application of the subject matter, in a compact format that is very easy to interpret. About Vibrant Publishers LLC Vibrant Publishers LLC is a Colorado-based book publishing house that started its operations in 2011 and focuses on publishing high-quality books for entrepreneurs, leaders, professionals, and graduate students. Vibrant Publishers has redefined how rich content can be made available to today's fast-paced generation. This new generation's need-to-know-now attitude and a highly competitive business environment have triggered this series of books with 'just the essential information.' Vibrant Publishers is committed to publishing books that are content-rich, concise, and approachable, enabling more people to read and benefit from them. Title: Advertising Essentials You Always Wanted to Know Publisher: Vibrant Publishers ISBN: Paperback - 978-1-63651-485-7 Hardback - 978-1-63651-487-1 E-Book - 978-1-63651-486-4 ### Media Contact: Sales, PR, and Marketing Deep Udeshi 3621 Harvard Pl Broomfield, CO 80023 +1-315-413-6418 [email protected] Deep Udeshi Vibrant Publishers LLC +1 315-413-6418 email us here Visit us on social media: LinkedIn Instagram Facebook YouTube X Legal Disclaimer: EIN Presswire provides this news content 'as is' without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
