It’s hard to envision New York’s Penn Station—an entirely underground train station filled with winding hallways that have been little updated since their construction—as a marketing opportunity for the city of New York. But that’s how New York governor Andrew Cuomo sees it, and that’s why Cardwell Beach chief of research Dave Donars and I sat down to talk about the ways infrastructure represents a marketing opportunity, how airports can become both more efficient and more user-friendly, and why “thinking big” is the mantra for 2016.
Podcast Transcription
DAVE: Hi. Welcome to Air Quotes, a podcast about invisible marketing. My name is Dave Donars. I’m Chief of Research at Cardwell Beach.
BRIAN: My name is Brian Erickson. I am Chief Marketing Officer at Cardwell Beach.
DAVE: Air Quotes is about marketing, advertising, and it’s part of the Cardwell Beach network. So I think today’s episode we’re going to talk about something that’s very essential to what we do, which is that every opportunity we have in business and largely in our own lives is in some form a marketing opportunity. Now we’re going to take kind of a long, circuitous route to get there, because most of what we’re going to talk about today is infrastructure. Rails, trains, passenger hubs, airports, all of this being related to that that is one of the most foundational and important ways that a city or a country can market itself to everyone, all the travelers and all the people who live and work there. Thanks for listening. What’s your favorite airport?
BRIAN: My favorite airport?
DAVE: Yeah.
BRIAN: Is that a trick question?
DAVE: No, seriously, what is your favorite?
BRIAN: The one where my flight leaves one time and I don’t have to pay $15 for a bottle of water, and the TSA Pre-Check line is less than 45 minutes long.
DAVE: Great.
BRIAN: So that’s my favorite airport.
DAVE: Right. And what’s the worst airport you’ve ever been to?
BRIAN: The worst airport that I’ve ever been to actually, you know, I was thinking that it was JFK, but really actually it was Charleston Airport. It looked like literally a wasteland of cables and insulation.
You sit on the floor. And the only food that they have in the airport was microwaved, literally. You wait in line to pick something out of a refrigerated case to put it in the microwave, and it’s $9.00. So Charleston, I’m sorry, beautiful city, terrible airport.
DAVE: OK. But that brings up a good point, is that you’re not able to name the best airport, but you’re able to identify what is the worst experience you’ve had, and that’s very easily attainable. I mean, airports, transportation hubs, a lot of it, unless they are grand, like Grand Central or something like that, we only really think about unless it’s a negative. It’s kind of like they’re the offensive linemen of the infrastructure. Like if you’re doing a good job, you don’t get any credit whatsoever. But when things go bad, that’s when people talk about you. And I think maybe we should start there.
BRIAN: Yeah. So on the note of airports, the reason that we’ve been thinking about this lately is just participating in a couple RFP’s that are related to the aviation industry and airport branding in particular. But this interest in transportation for me actually started probably about ten years ago when I was working at Phillips Lighting. And we were doing color changing LED’s, which were novel at the time, you see them everywhere today in many of those projects such as, you know, top of the Empire State Building, Times Square New Year’s Eve ball are Phillips projects that we were working on back then, which was cool.
But a really big sector for Phillips LED was airports. And it was just kind of hammered into my brain the importance of airport branding. I wasn’t really sure why it was so important to airports at the time, and as a result so important to Phillips, but over the course of my career so far it has become kind of clear. And I don’t know if it’s too soon to go into some of the observations about Cuomo and Penn Station and whatnot, but as you were alluding to earlier, the transportation system of a city, of a municipality, of a country really kind of sets the tone and sets the pace for your experience of that city or country’s brand.
And that’s something, again with the trip to Asia recently, I was thinking what is my favorite airport, I would have to say it actually is Narita International Airport in Tokyo. First of all, I sadly have to say it was the best ramen that I had while I was in Tokyo. It was actually excellent, embarrassingly, was amazing. But not so because they take pride in their airport experience there. It’s such a strong sense of ownership and sense of pride in the transportation infrastructure in Japan, starting in the airport itself and branching out to the metro system, which is renowned internationally. And that kind of sets the pace for your experience in that country, in that city.
DAVE: Let’s dive into Cuomo’s speech. Andrew Cuomo is the Governor of New York. He gave a speech on January 6 this year about renovations that they’re making to transportation in New York City. He specifically talked about Madison Square Garden and Penn Station, LaGuardia Airport and some of the redevelopment that’s happening. But one of the most important things he says is, right at the beginning of his speech, it’s actually a great speech. I mean, I’m not this huge supporter of Andrew Cuomo.
BRIAN: I was very surprised when we were just, we were prepping for the show just now, and we watched a good portion, if not most of the speech. And I was like, wow, this guy’s really smart. And he just explains things in such a simple, pragmatic way. It’s great. One of the things he says that’s really important is that New York City in particular, but all metropolitan areas are essentially built environments. The most logical extension of that is an airport, which is an entirely built environment. There’s no element of it that hasn’t been constructed and thought about from a command and control kind of environment. And he kind of leads into what we’re trying to talk about today, which is that all transportation is a marketing opportunity. And there isn’t much out there that isn’t a marketing opportunity in some way and form. So I think we’re just going to play some of that speech right now.
CUOMO: We were in Long Island yesterday talking about our Long Island plan, and the front page of Newsday today said think big, think big. And it was summing up what we were proposing for Long Island, but I think in many ways it sums up the entire message of the state of the State this year. Think big. We are facing big problems in New York State. We are facing big problems as a country. We have big international problems. We have big domestic problems. We have problems with terrorism, we have environmental issues, we have economic issues, economic injustice issues. These are all big issues. We have a homeless problem here in the City of New York. Big problems require big solutions. And if you bring a small solution to a big problem, by definition you’re going to fail.
DAVE: So I love how he inflects on the quote. I really like it. If, big problems require big solutions, and if you’re going to take a small solution to a big problem, by definition you failed. And you know, I think that it’s time for that quote. I mean, its time has come. We’ve seen these kind of small, incremental solutions taken over the past eight years, since everything happened with the real estate market and the banks and whatnot, operating out of fear. And we’ve talked about this before. I mean, it’s a mindset based and rooted in incrementalism, rather than taking a big solution to a big problem. And I think definitely in Governor Cuomo’s speech, he is calling for the annihilation of that viewpoint. There’s no question that it is annihilation when we get to some of the statistics later in the podcast. But I think that we’re starting to see that attitude take root across the board, and in no place is it more acutely visible than in transportation.
BRIAN: Yeah. I love that, we’ve been talking about this for months now, if not longer, about that this death of incrementalism is occurring. And if you’re on the wrong side of this equation, you’re going to be stuck with a small solution to a very big problem. And you’re going to be, by definition, wrong. I love that coming right in the first few days of 2016, which is the year that we said that this stuff is going to be over, we have a governor of one of the most populous states in the country announcing very broad, ambitious plans to tackle big problems.
DAVE: But the way he frames it is really interesting, because this isn’t just about efficiency, about like being able to move more bodies. It’s not about commute times, although those things are present, right? It’s much more about that in many ways, the facilities and infrastructure here in New York are not commensurate with what New York is. They’re a failing portion of it. And he does mention that Vice President Joe Biden did come here and say that LaGuardia Airport was a Third World country’s airport. And I think the takeaway from that isn’t that Biden was necessarily complaining about the time that it took the bags to come out, or just something about that, but it’s an aesthetic look. It’s about the approach that it makes you feel.
Because as you’re taking that first step in your journey, like you were talking about with Tokyo, it puts you in a filter, in a mindset. If you’re already in a good mood when you’re entering a city, I’m positive that someone, some very smart person somewhere has probably done some psychological work about that you might spend more money as a tourist in a city if you have better facilities. If people aren’t just stuck in the drudgery of it all, if they can get around quickly, but if they have a positive psychological outlook in that town that they’re in, I’m sure that that benefits the economy in ways that I can give you fractional attribution on at this moment, but I’m positive it’s there.
What is very important to me is that politicians, with extraordinarily large budgets, are usually a little bit more staid. Like they’re a little behind the times in a lot of ways. Like have you ever seen the Newt Gingrich video? Newt Gingrich, for better or worse, he’s a very smart man, right? Like he’s got a Ph.D., he knows what he’s talking about. But he’s trying to explain the word “smartphone” but he doesn’t know it. He made this video, he’s bumbling around all these different terms because he doesn’t want to call it a cell phone but he doesn’t know the word “smartphone.” They’re very intelligent people, just a little bit behind the times.
And if that is true, then you and I are behind the times talking about that the marketing is an always opportunity, because of the fact that what’s amazing about this is that these politicians are understanding that this isn’t just about dollars spent to move people like they were cattle. This is about making you feel good when you’re in physical spaces. This is about how that psychology, how that marketing does affect your overall economy.
BRIAN: And that, as novel of a viewpoint as that sounds, as we’re saying it today in 2016, it was once the norm. I mean, when you had the robber barons, I mean look at the names on a number of these facilities in New York City. I mean, yes, were they all trying to outspend and out-memorialize each other? Absolutely. But Carnegie Hall was quite the great outspending endeavor, as was Grand Central. And as was the old Penn Station, so I hear.
DAVE: I think this might be a good opportunity, because we’re talking about the old system, to jump into another Cuomo quote, which I know, and we’re not trying to play these overlong Andrew Cuomo quotes and we are not Andrew Cuomo partisans by any means, it’s just an important thing to discuss right now. But I think we jump in right now to a portion of the speech where Cuomo is actually discussing about that old majesty that there used to be in these buildings.
CUOMO: Penn was a majestic building, opened in 1910. In true New York fashion, it was one of the largest, most grand buildings ever constructed at the time. It was a triumphant entrance to New York, because that was New York at its best, right? It was New Yorkers saying, when we put our face forward, we put our welcome mat and we put out the best, because we are the best. After World War II, Penn Railroad demolished the above-ground station. Today Penn, which is owned by Amtrak, is the most traveled hub in the hemisphere at 650,000 people per day. Just think about that, coming through Penn. Penn Station is un-New York. It is dark, it is constrained, it is ugly, it is dated architecture. It is a lost opportunity. Travelers are relegated to a bleak warren of corridors. Frankly, it’s a miserable experience, to cut to the chase. And to really cut to the chase, it is a terrible impression of New York. Imagine being a first time visitor to New York and getting off in Penn Station. Good thing the Vice President flew and didn’t take a train. If that’s what he said about LaGuardia, imagine what he would have said about Penn.
DAVE: Well, I mean frankly, he’s just more eloquent than you and I are. He hit it really well. But that said, as these things are welcome mats to a city, I think that that’s a great turn of phrase. They should have a certain awe-inspiring effect to them. It shouldn’t just feel like a bunch of wires and Hot Pockets that you get to microwave for nine bucks a privilege. That doesn’t seem worthy of travel experience. Because traveling can be drudgery. I mean, it’s not slavery, it’s not having a terrible illness that you’re going to die of, but it’s not the most fun thing in life. And things that can make that experience better can truly improve, I think, a region’s economy. Also a city’s reputation. I think that there’s a lot that goes into it. Which is why I think it would be interesting to go back into some of the pitching that we’ve done recently with NDA’s and some other stuff. Maybe we can’t get too specific, but the reality is that I think it’s really interesting to hear what some of your concepts and thoughts were about how does a city improve with an airport and things like that.
BRIAN: Well, I mean I think it’s obvious in today’s world that technology is indistinguishable from the physical experience.
DAVE: When it’s good.
BRIAN: I mean, yeah, that’s a very good point. Technology should be indistinguishable from your real world experience. And that was a large part, not all, but a large part of what our initial focus was with this pitch. Technology can make our lives better, and technology can make our lives worse. So why wouldn’t we choose to make our lives better? And there are simple things that we just take for granted as the status quo in a passive way, maybe a negative way. Like how come you have to still notify somebody who’s picking you up from the airport that it’s time to come pick you up?
DAVE: Yeah.
BRIAN: Why does that have to happen?
DAVE: Yeah.
BRIAN: If Uber ran my airport, that wouldn’t have to happen.
DAVE: Right.
BRIAN: And those are some of the types of questions that we’ve asked ourselves in the process of redesigning the 21st century airport technology experience. And I’ll rephrase that and say, redesigning the 21st century airport experience. Because again, technology is seamlessly integrated into that experience. You know, I think that transportation is obviously being disrupted in the taxi sector by Uber, but I think we’re going to start to see a lot of different sectors be disrupted by technology that weren’t previously looking at it. And it’s not to say that Uber is going to open up an airport, but I can bet if they did, it would run quite smoothly and be the most trafficked airport in the history of the world.
DAVE: I mean, but also Uber’s not perfect. They make mistakes.
BRIAN: Oh, they absolutely make mistakes. I did go on an Uber promotion tirade there. But I mean, I think one of the things I want to discuss is that what you’re talking about is a much higher scale of automation, and I think that that’s a big theme, right? Like we see that more with restaurants and stuff like that being able to automate things that we used to have people do, and Uber itself, how the hailing system works. But what we’re really getting at is this need for automation to occur in a lot of places because it makes things simpler. But if you go back to that built environment of an airport, the logical extremity, like your Uber template, the logical extremity of total automation still doesn’t account for what we need as people about like where we can lay out, or if there’s an overflow and things like that. And I think if the combination of that technology with understanding the positive psychic equity that a physical space can give you, that is the winning combination.
DAVE: I absolutely agree with that. And you know, what I get the sense from what you just said there is alluding to is just kind of that core concept of human empathy. And it’s looking at that as a total experience, not just from a physical location standpoint and not just from a technology standpoint. It’s across the board.
BRIAN: Yeah, I mean, and like to go to there, to always be thinking about the people that are going to be using or living or working in your space or using your product or anything like that, I mean, I don’t think this is new, but I think that reminding people of it is somehow refreshing. Is that the location of outlets in an airport is a marketing opportunity. You know? Like it’s fundamentally required, you need electricity. But for people to be able to not have to crowd around certain stations and stuff like that, that’s a marketing opportunity. The location of seats so that there’s a double wide so that parents with young children can care for them without having a steel bar in between them, that’s a marketing opportunity.
When you think about transportation hubs, the big one that gets to me, especially with bus transportation hubs, is always having enough light into an area so that, and ventilation, so that you’re not just congested with fumes. I’ve been in a few international bus hubs that were honestly, like they could make you sick enough that it could ruin your day. And that, maybe it’s getting you from point A to point B, but if you’re sick because of what point A was doing to you, it’s not worth it.
And I think that if big, abstract concepts like municipalities or metro areas can think of this and think of their welcome mat, and know that they’ve got touchpoints that matter more than others, brands can do the same thing. And the problem with branding is that it requires alignment at all times. A city gets an excuse, gets a pass by, where if the airport’s nice and the transportation hubs are nice and the main roads are nice, and there’s a nice, walkable downtown, it’s nice. And that there could be problems with poorer parts or a ghetto part of town that you don’t have to totally encapsulate. But if you’re a brand, you can’t have like some ghettoized portion of your brand where you’re just not thinking of it. Because that could be the person’s only touchpoint with your brand. So it requires a level of alignment and rigor that is just more disciplined than I think we think about with a 30-second TV spot or something like that. Like that is not the Band-Aid that is going to resolve anything for you.
DAVE: Last quote from Andrew Cuomo’s speech on January 6.
CUOMO: Transportation, as we know, is the circulatory system for the economy. It’s what made this state 100 years ago. It’s what’s going to make this state for the next 100 years. What happens tomorrow depends on what we do today. Let’s be as bold, as ambitious, as our forefathers were before us. It’s what made this state the greatest state in this country, the greatest state on this planet. And if we remember how we got here, we can build a New York that’s better than ever was. This is a beginning to do just that. Thank you, God bless you.
BRIAN: So I can only imagine the incredible feat of logistics that is running and managing Penn Station with 650,000 people per day, of running the MTA, of running an international airport with flights coming in around the clock. I mean, that is something that is just far beyond the capacity of someone like me that I could ever even dream of doing something like that. And I can see how it could be easy in that hustle to lose sight of the bigger picture, to lose sight of the full experience, to just be happy that everybody did get from point A to point B. Or 99.6 percent of people got from point A to point B. And it’s easy to overlook that .4 percent, or whatever that is, of people who didn’t have a great experience that day. But that’s exactly the challenge that we are being presented with in our time.
And I think it’s, I mean, it’s about, I think the framing of this now is it’s not about point A to point B. That you know, I’ve seen statistics about how much safer flying has become over the last forty years, and it was pretty safe forty years ago. But these incremental improvements that they’ve made about building on the shoulders of other people, about looking for processes and having good checklists and taking very complicated systems and making sure that people obey these rules and know what to do, we’ve learned from mistakes and we’ve done a very good job. But I think that we’re leaving that area. Like we talked about, like we’re leaving the time of incrementalism, and we’re moving into that there’s bigger spaces for us to kind of make these big leaps into. I don’t think it’s enough to just have the people just get there. I don’t think it’s enough to just have them that they’re not on this, the low end of the bell curve where they’re extremely rageful about their experience. I think it’s about moving the entire bell curve into a place where people are happier.
DAVE: Yeah. I mean, logistics do that for people. Like it doesn’t sound, I actually think logistics and infrastructure and stuff like that does kind of sound sexy, because it is kind of the guts of the system, it is utterly transparent what is happening at the moment. And I think that thinking of marketing in the old way, where it was just the shiny veneer that you put on, but you never let people go and see the sausage being made, I mean humans are going through the sausage machine constantly in transportation, right? Like that’s what this is. We are in the guts, we are in the back room of the factory. And to make that a pleasant experience, that’s the new frontier.
BRIAN: And I think that’s a really great analogy of seeing how things work from the inside out. You know, my whole philosophy on account management, let’s just say for instance, is kind of the bridge from the internal to the external portions of our business in advertising and marketing. And what I always tell our account managers is setting expectations is the most important thing. It’s the most important thing. If you tell somebody that something’s going to be ready and then you don’t deliver it on time, that is so much worse than if you just told them you were going to be an hour late, or a minute late or a second late. And the way that that information is received is totally based on how different things are from their expectations. And going back to transportation, when you look at let’s say the subway system, which is something we think about in New York City relentlessly, in case you couldn’t tell in this podcast, I think one of the best marketing decisions that they ever made was installing the countdown timers for the trains.
DAVE: Oh, yeah. That is a positive move.
BRIAN: They are setting your expectation. It doesn’t feel like you’re waiting on the platform for eternity when you know it’s only been six minutes. Which is a relatively long wait time. But when you see that number, oh, six minutes, wow. That’s pretty good. I really can’t complain about that. But when you’re standing there tapping your foot, watching people pile up and look down the track and see if the light is coming, or look at somebody with long hair’s hair to see if it starts flowing when the wind is coming from the train, I mean, these are the things that you actually do on those rare platforms where there’s not a countdown timer, because it drives you nuts. And that is, I think, a good guiding principle, seeing how things operate and setting expectations about how they operate. I mean, if you could bring somebody into HQ C-suite level at an international airport and show them all of the things that you are doing to keep things going around the clock, and then their flight was delayed 15 minutes, do you think anybody would care?
DAVE: Right, no.
BRIAN: No. Because it’s like holy shit, how did you even do this? And just tell people that.
DAVE: No, and I think that’s a really great point. And that, to me, is a huge part of transportation, is we live in a world now where technology can enable a much greater form of communication about exactly what’s happening. And that you’re not just sitting there mindlessly in a seat in an airplane waiting on the tarmac and you don’t know how long it’s going to be. To give people a better range of what’s happening and an explanation as to why it’s happening, I think is also a story. And maybe some people are going to be really fucking bored by it, and they’re not going to be interested in what this is. But for other people, that information is a sense of control. It gives them a sense of that they’re understanding or even that they’re more engaged in their own journey and in their own travel. And I think that that’s something that a lot of people, maybe not all the time, but sometimes is going to be pretty valuable. And that’s something that’s kind of missing. I wanted to ask, what were some of the other broad things that you’ve come across in some of the transportation stuff that’s happening?
BRIAN: I mean, one of the things obviously was exactly what we were just talking about, is there is a ton of data that is produced in an airport. And it is a fascinating experience, what is actually going on behind the scenes. And again, coming back to empathy, I think empathy is a two way street. We don’t, as marketers and as brands, just have to have empathy for our customers. I think we have to work to help them develop empathy for us. When things aren’t going well, they should understand why and how things have potentially gone wrong. And I think just adding to that transparency from a data perspective, I mean plugging into the building management system, for instance, and just looking at the complexity of how a building runs and tying that to publicly available information around flight data and whatnot, there are novel combinations in this data that are out there that we haven’t explored and utilized yet. And that’s another area that I think is going to be really big. I mean, it’s great, when we were at Phillips Lighting we put in a ton of color changing escalators and change the color of lights, and that’s ooh, aah for a second. But I think there’s some really fascinating, awe inspiring potential out there with the data that’s being created every second and changing every second at an international airport.
DAVE: One thing I just want to go back on, because I think maybe this is a good drill down and maybe a segue to some of the other stuff, but like you think empathy is a two way street is really interesting, but I think my take on it might be it’s a two way street in certain circumstances.
BRIAN: Yeah, yeah.
DAVE: If something is a very, very, very easy task, or what I perceive to be an easy task, or like getting food ordered. If I order food and it’s three hours late, like unless they’re comping me, like I don’t care what you’re doing. This food needs to be in my body right now, this cannot be somewhere outside of my apartment. And there’s some limits there. But I think, or just like when technology isn’t working the way it should, when it’s just like malfunctioning or something like that, like I have no empathy for it. But I do, and I think it ties into something that like people really have a craving for. I don’t necessarily, but like things like artisanal blah blahblah, people will love to wait for like nine minutes to get a cup of coffee or something like that because they’ve established that this is a two way street, that this is the process, and it’s a totally transparent thing and it takes time and this is the machines that are working on it, these are the people that are working on it, and you understand it. And you gain a richness from that experience. That’s where the empathy really becomes something where it’s like a value proposition both ways. Even taking longer than something else is its own value proposition. But I think on some other stuff like food delivery.
BRIAN: Well, I mean, total failure there’s no excuse for ever.
DAVE: But even like Domino’s, right? Food delivery with the online ordering system where you’re seeing Jake is putting your pizza in the oven, and whatever. I think that that’s interesting. I also think, I like that Domino’s has started to embrace the marketing always concept, where all of their footage now has to be shot inside a Domino’s location. Now maybe it’s the nicest Domino’s location and it’s not representative of all of them, but every single shot that they do has to be inside a Domino’s location. So if you’re going to shoot food, it has to be inside a Domino’s location that they’re shooting food. They can’t go outside of it.
And I honestly think in a day and age where stuff like Seamless enables a restaurant that probably doesn’t have the infrastructure or the technology to do what Domino’s does, or to necessarily be price competitive, it gives a lot of other competitors a leg up. And who needs this kind of blandish, kind of national food? But they’re kind of going back to some form of their roots by saying that transparency is their marketing. And I think that that’s a good place, because they’re not lying to you about any of this. They’re not, it’s not a storefront with something else in the back. It is what it is. And even their most recent ads, where they’re giving discounts for people to come into the stores, that they’re trying to, they even say it, they’re trying to test their stores to see if it’s as good experience to come pick up food or do carryout or even stay there an eat, which I mean, that’s a risky proposition, you know? So I think that the marketing always concept, that there’s very few opportunities.
There’s some logical extremities of things that are not marketing opportunities. But we’ve talked about like how you’re structuring your data on the back end is important. Emails that you’re sending to each other that you never think are going to be seen publically, the condition of your bathrooms, the employee policies about what people can dress like, things about what your food in your cafeteria is, walking distance from a gym, things like that.
BRIAN: There’s your hold music.
DAVE: Your hold music?
BRIAN: I love hold music. Because every pitch we ever do, what’s the number one recommendation? Change your hold music.
DAVE: But seriously, no, I like emphasizing it because I want people to have a pleasant experience at all times, and hold music is a thing. I also want people thinking about it because I want them thinking about that we’re keeping people on hold. And that if we’re going to keep them on hold, we might as well pay some licensing fees and get them some really great music that maybe they’re going to be interested in, because goddammit they shouldn’t be on hold at all.
BRIAN: Yep.
DAVE: And if we’re going to have to do that, we’re going to pay a price. And that there’s a premium to pay for keeping people on hold.
BRIAN: There are hidden costs, and I think that’s another thing that we’ve kind of been exploring lately. Keeping somebody on hold saves you money operationally. But it puts the cost in the customer’s lap. The cost of sitting there annoyed and not being happy with your brand. And that ultimately comes back around and ends up as a customer acquisition or retention cost for you.
DAVE: That’s, you know what? Putting people on hold for too long of a time is a small solution to a big problem. And our big problem is that we’re busy. And the small solution to that is to be like, well, just wait around. Like, that’s not a good idea. And so in talking about like death of incrementalism, where you get call-backs, where you can schedule calls, where you can go on an app very quickly, or a mobile web page more accurately, why would you download the app? But you know, just schedule in a time when it’s going to be convenient for you, these things are much, much more efficient than generally just keeping people on hold for ten minutes. But there are emergency situations where, you know, people have to get a lot of information and you can’t extend your support staff and you can’t reasonably get other support centers and other call centers involved and train them up quick enough.
BRIAN: Down times and whatnot, I mean, yeah, a number of circumstances.
DAVE: But that still, the disadvantage of your logistical situation in that moment is still a marketing opportunity. Because that’s when you can start to give them pleasant music. That’s when you can start to try to make their lives better. Because if they’re sitting on hold waiting for you guys to pick up, please make it as nice as possible. And especially…
BRIAN: I mean, if you had somebody in the airport, let’s say the airport security line was an hour and a half wait. If you had a comedian standing next to you telling you hilarious jokes, who would care? Nobody. Right?
DAVE: It depends on the comedian.
BRIAN: If it was your ideal, if each person had their ideal comedian standing next to them and you couldn’t hear all of the other ones. OK, maybe that’s a flawed solution, but you get the idea. Put a comedian in every place in the security line next to somebody. So our basic takeaway from this is that the TSA comedians apply, please. Please work your routines in the lines. No, I think that the hidden cost idea is super important. Because that is the essence of what we’re arguing against, that incrementally, maybe you’re saving a few dollars here and there. But on margin, you’re eating it, because you have…
DAVE: That’s exactly it.
BRIAN: Yeah.
DAVE: Totally, you’re hiding it. You’re hiding the cost. So you have to sell more units at a higher operational cost to just make the same amount of money that you would have if you took care of all your business in the first place. And taking care of business is a very simple thing. It’s taking care of the people who you’re doing business with. There’s no other element of business. I don’t know why they write books about business. It’s like there’s one rule. Like you have specialties and stuff like that, but it’s taking care of the people you’re doing business with. That means your employees, that means all your vendors, and most importantly your clients and your customers and your patients. Like if you’re not doing that job, then you’re failing.
BRIAN: So let’s bring this back to transportation and to airports in particular. What is, I’m going to play devil’s advocate for a second here. What is the incentive for, you know, OK, great, like international tourists are coming into my city via my airport, and giving them the best experience at my airport sets the tone for them to spend a ton of money out in that city. What is the incentive for the airport itself, other than doing good for its city? Which as we know is not always necessarily enough economically to drive decision making.
DAVE: Well, I think that there’s a few elements of it. Airports are complicated messes. Even who owns them and, you know, I think that there are elements that are public/private owned, I think they’re still largely owned by municipalities but they’re regulated entirely by the federal government. I think it’s complicated, because I think to succeed, you’ve got to have a committee of a lot of people with a lot of different interests at heart being satisfied in some way. And that’s the essence of what big transportation is. You’ve got a lot of different concerns, and there’s not just one single voice.
But the advantage to the airport itself is back to our margin, back to the hidden costs. If it’s a good place where you have your airport, if it’s not just like, I mean you can build the world’s most extravagant, beautiful airport 600 miles from anything and no one will go there, because there aren’t going to be flights going in and things like that. But if it’s a good airport experience and it’s in a desirable location, you can enhance the premium offerings within the airport, you can bring in people who are having a good enough time that they’re willing to spend a little bit more money on a good experience in the airport. Very simple things.
There’s different types of people. Some people really cut it close to the wire and some people are planners, and there is also my father who loves to get to the airport four hours early for any domestic flight. And he’s going to spend a lot of time there. And if there are things that are going to interest him and engage him and do something that could give him value for that time he’s going to spend there, because he needs to have the psychological insurance that he’s got there on time. And that’s fine. I mean, he doesn’t get there four hours early, but that’s OK, but like for him to be able to do something in that airport is also important.
If you’re creating a situation, this goes from marketing right to logistics, where it is a completely, on the opposite end of this, a completely miserable experience, it is the worst experience ever, like there’s a fire happening somewhere, dogs are biting people, it’s just like a hellish experience, people would spend the absolute minimum time there possible. And what that causes is longer lines in security. That causes backups with the TSA. That causes flights to not take off on time. That causes clutter and people rushing around and a lot of other things. When you’re dealing with an international airport where there’s security and logistics and all these other elements that you’ve got to really be concerned with from an operational perspective, marketing helps ease that process. If people are willing to say that I like this airport, I can spend twenty extra minutes here, it’s not this totally degraded experience from the high times I’m having, I’m not saying people are just going to automatically like leave their beach vacation an hour early to go spend time at the airport, but to a degree, ten minutes here, ten minutes there, that really matters.
BRIAN: I mean, when we were coming back from Tokyo, so we had, we stopped in Narita Airport on the way to Bangkok in Thailand and so we had a couple hours there and we got to kind of know the airport a little bit, and then we flew and spent some time in Tokyo and then we flew out of Tokyo. On the way back, we had a 2:00, 3:00 flight, something like that, and we kind of, we went around in the morning, we did a couple things, we had a little extra time to kill, and it was like either aimlessly wander around our neighborhood that we were in, sit in our hotel lobby, or go hang out at the airport, we were like yeah, you know what? Let’s go back to that ramen place and get the best ramen that we’ve had now that we’ve been in Tokyo for a week somehow at this airport, because they actually care. And also, the shopping was phenomenal there. All the souvenirs that we didn’t buy for our friends and family we’re like, well, we know that the airport has it.
DAVE: Right.
BRIAN: Let’s buy them there. And I spent more money in the airport than I spent the entire week on souvenirs.
DAVE: Right. And first of all I want to parse out that. I think that we’ll probably get some emails about the best ramen in Tokyo being at the airport.
BRIAN: Actually, I have an expertise in ramen on FourSquare. I’ve been to about forty different places in New York City. I went to maybe fifteen to eighteen in Tokyo and have them all documented if you would like to see my ratings on each one.
DAVE: But I think the other point you’re making is the great advantage of these airports is that it’s a more premium experience. That you can rent out the space in your airport for higher amounts of money per square foot if you have people who are there and engaging and spending, and there’s other entertainment opportunities for them and things like that, and it is a pleasant and calming experience, people will be willing to do that. I mean, I think I saw something, I don’t think it’s the new LaGuardia Airport, but it might be the new one that they’re building in Panama. This is wrong, it’s not Panama, it’s probably anywhere else on the planet than Panama. But they’re looking at doing things about building large movie theaters within the airport. Not necessarily because people are going to buy a ticket, an airplane ticket to go see a movie, but because if there’s flight delays or people are stuck overnight or anything like that.
BRIAN: Hey, why not? I’m sure it would be full on many, many occasions.
DAVE: Yeah. Or if you’ve gone to the airport to pick somebody up.
BRIAN: And their flight is delayed…
DAVE: Yep. You’ve got something to do. And they’re kind of like different. They’re not just showing full length movies with certain lengths of time. There’ll be some smaller boxes where it’ll be like 15-minute segments and stuff like that. And you know, apparently there’s something about that they can’t do live performances. There’s something about security or something with that right now.
But I mean thinking about it in terms of what we can offer these people is also really important, and the fact that that doing good does you good, that you’re going to see dividends from that.
BRIAN: Absolutely. I mean, what other movie theater is going to be full around the clock like that?
DAVE: Right. And just as a final thing, this has been largely, this podcast has been largely about infrastructure, and most particularly airports and train depots. But I think the analogy still holds that that’s a major touchpoint for what is still kind of an abstract concept, which is a city or a municipality or a metro area. It’s kind of an abstract concept, but we know that those are the welcome mats, those are the major touchpoints. Brands have exactly the same thing. You know the main channels, you know the main ways that you’re communicating with people, but you can’t let the ball drop on anything. You’ve got to have a very serious rigor in all portions of what you’re doing. And I’m not going to say in all portions of your marketing, I’m saying in all portions of what you’re doing, because all of it is marketing. To make sure that people aren’t falling through the cracks. Because it is not OK to just focus on well, we made these small portions of the bell curve, these standard deviations out, we’ve made them unhappy. It’s about the general happiness.
BRIAN: You don’t just have to completely agree that if you aren’t laying out the best welcome mat possible, whether that be your hold music, whether that be your IT security, whether that be the packaging and the way that that’s assembled for your product, or your website or mobile app, shameless plug. Those are things that are essential and there are costs associated with them.
DAVE: Yeah. Because your future revenue is built on what you’re doing right now. That’s why ROI is a very tough concept in marketing, and we haven’t totally nailed it, because there’s going to be a return on investment, but what window are you looking at? You know, I mean there’s people who are buying products for clothing companies or some alcohol companies or some tech companies based on advertising campaigns or a general feeling that’s created by a brand that could be twenty years old. And it’s a fractional percent of what’s happening right now, but ROI is a really tough concept to fully encapsulate in marketing. But we do know for sure, and fractional attribution and all of this, we can do baseline models, we can get very advanced with this stuff, it really helps. Media mix modeling helps, marketing mix helps. Like there’s a lot in there that can give you a baseline.
I think going forward, marketing without doing that, is dangerous to foolhardy, somewhere in that range. But I think that a return on brand is a never-ending calculation. Because until your company just closes its doors and says we’re done with business, your return on brand is something that’s a long tail prospect that could be, maybe not multi-generational but you know, twenty, thirty years you can be getting dividends from what happened a long, long time ago. And that positive psychic equity affects your income now. So do that now, and you’re going to have better results in the future. What we do today affects tomorrow.
BRIAN: And tying that back to the death of incrementalism, I think when you hear the word “incrementalism,” you think of a measure in progress. But also think of it as a measure in time. I mean, thinking of things in weeks, months and quarters is, that’ll keep you afloat today, but it’s not going to take you to the next level. You know, and even as in Cuomo’s speech, you look at his timelines, they’re not that long.
DAVE: They’re very, very, very aggressive.
BRIAN: His timelines are short and aggressive.
DAVE: By the time this podcast goes out, the RFP and the RFI have already gone out, and I mean they’ve contacted the vendors, from the speech I was given six days ago. It’s remarkable. His timelines are aggressive and fast.
BRIAN: So his budget that he’s proposing is what?
DAVE: About $60 billion just in infrastructure.
BRIAN: And over what period of time?
DAVE: Well, the projects will vary in length a little bit, but it’s going to be some of it starts immediately. Some of it starts right now, and it goes forward, they want to complete everything that they’re laying out…
BRIAN: You mean a new Penn Station, a new LaGuardia Airport, major improvements to the New York City transit system.
DAVE: The new tunnel to Jersey, improvements in Long Island, and some of the upstate projects. All of it they want done by 2025.
BRIAN: So I mean, that’s I think a good point of reference for the level of ambition that is possible.
DAVE: Because those are huge projects.
BRIAN: Enormous projects.
DAVE: Yeah. I mean, Cuomo says in his speech at one point that any one of those three major projects would, by itself, be the largest construction project in the United States, on top of what is also the East Side Access Project, the largest construction project currently happening in the United States. You could have four of the largest, the top four largest construction projects in the United States happening at once. And just think about what that does for like how many people they need to hire and the workers. That’s an enormous undertaking.
BRIAN: Vehicles.
DAVE: Yeah. Just and permits and construction and what you’re going to have to do with like, everything with traffic. And to get that done in nine years is, I mean that is, nine years sounds like a long time, but these are…
BRIAN: Well, how long did it take them to build the Eerie Canal, 525 miles long?
DAVE: 524.
BRIAN: 524.
DAVE: Don’t exaggerate it. But that was six years. With shovels, horses and two hands.
BRIAN: Yeah. It’s remarkable. So if government, which is seen as being this kind of backwater of a lot of innovation and stuff like that, if the government can start tackling this stuff, there’s no company on earth that has all the constraints that government does.
DAVE: Right. And so you’re more agile, you can move better, you’ve got better maneuverability. And I think it’s time to think big.
BRIAN: The annihilation of incrementalism.
DAVE: I think that’s a good way to begin this year. The annihilation of incrementalism.
BRIAN: Alright. Go team. Well, thank you again. This is Brian Erickson with Dave Donars, signing off here.
