Southwest Airlines is on track to quadruple year over year its number of new corporate contracts in 2018, armed with a bigger and newly structured sales force and a distribution strategy leveraging new capabilities unlocked by its recent reservations system switch, sales executives told BTN.
Over the past year and a half, Southwest's sales team has focused on two areas: "What do we need to do to make it easier for our customers to do business with us?" and, "How do we ramp up our selling capabilities?" senior director of corporate sales Matthew Smith said during an interview at the recent Global Business Travel Association convention in San Diego. In terms of personnel, the corporate sales organization has grown from about 25 to more than 80 over that period, he said. That includes about doubling the sales employees in the field and building up new teams with specific focuses, such as government business.
The intent, however, was more than just purely adding numbers.
"We want to grow, but we want to grow smartly," Smith said. "Our organization needs to get better with every salesperson we hire, so we need to continue to look for the best people out there and surround them with supporting mechanisms, whether it be a sales enablement team that helps with contract implementation, a sales analytics team that helps get strategic around pricing or loyalty opportunities or a performance [team] that helps us understand the root cause of performance increases or decreases."
Along with growing the number of corporate contracts, Southwest also aims to increase the percentage of corporate contracts in compliance with their terms, Smith said. The goal the team has set for that is "within reach" for the year, he said.
Unlocking Distribution
Southwest's new structure has brought a familiar face back to its team. Former director of corporate sales and distribution Rob Brown had been with Southwest for more than two decades but left a few years ago to manage NuTravel's Airline Solutions Group, has rejoined Southwest as senior director of sales strategy and B2B channels. Among his duties, he oversees a team focused on relationships with third-party intermediaries, including travel management companies, global distribution systems and corporate booking tools, as well as a team focused on service for corporate travel managers and agencies.
Brown said the latter is "going to be an important element to be able to add to our full circle of providing that customer service. Having a team in place that can service all of those top customers in a way that gives them that hospitality feel will be key to Matt's team and to continue to build loyalty to those customers."
Dave Harvey, just promoted to VP of corporate sales, said the goal is to correct areas in which the carrier "is hard to do business with." That includes "a huge tech investment, looking across our small to medium-sized business platform Swabiz, our API strategy with direct connect or doing things differently with TMCs or GDSs," Harvey said. "We want to reduce hurdles, give tools to the selling teams and let them do what they do best."
The carrier's switch last year to the Amadeus Altea reservations system is enabling some of the changes, he said. The system allows for some "industry standard" capabilities with GDSs that were not previously available, such as self-service for agencies, he said. "Our hands were tied, and now we're in investigation and discovery to find out what that's going to look like," Harvey said. "Ultimately, it will allow for more personalization. We have a lot of the rich data coming through our different channels, and we're not necessarily maximizing that."
Southwest also is working on automatic reaccommodation for travelers during flight disruptions, another capability enabled by the new system. Things on the longer-term road map include allowing foreign points of sale, codesharing, interlining and loyalty relationships, Harvey said.
Network Plans
Southwest's biggest network growth story at the moment, its upcoming service to Hawaii, has more implications on the leisure side but is certainly of note to the meetings and incentives side of business travel. The carrier is "pretty far along" in the process of securing FAA approval and is still on track to begin selling tickets for the service this year, Harvey said.
Southwest will serve Hawaii from four California gateways—Sacramento, Oakland, San Jose and San Diego—which will build from Southwest's considerable network on routes within California, on which Southwest carries almost two-thirds of all passengers, Harvey said. The carrier will fly routes between the Hawaiian islands, as well, challenging Hawaiian Airlines, which has virtually no competition on those routes.
In addition, Southwest is continuing to build service out of Cincinnati, including nonstop service to Denver that began this month. As Southwest has built up service in the Delta hub, Cincinnati airfares have fallen from among the highest in the continental U.S. to about the "middle of the pack," Harvey said.
"Structurally, it's going to do gangbusters," Harvey said of the Denver route. "There's not only a lot of demand to Denver, but it has all that connectivity out to the West Coast. It's a great corporate market, with a lot of Fortune 500 activity, so we've been able to win a lot of corporate contracts."