Overestimating Bob Crandall’s contributions to modern marketing may not be possible. Not yet 40 years old when he became an American Airlines executive, Crandall didn’t have the benefit of a youth-based culture to fall back on. He was the proverbial up-and-coming executive.
Less than a decade later, he was running the airline. Crandall was behind three innovative concepts and had enough power to nurture them in the marketplace. The first was the loyalty program. AAdvantage was first, and every time you swipe a card or enter a shopper’s club code or use your Amazon Prime account, you have Bob Crandall to thank.
If you’re a marketer, you know that loyalty programs did more for retention than any fleet of then-in-vogue Management by Objective tomes.
Technology was also hot on Crandall’s agenda. During his tenure, American’s embryonic computer system was pushed out to other airlines and platforms.
I vividly remember entering a public version of the system in the mid 1980s from text-based sites like CompuServe. The folks publishing the Official Airline Guide (OAG), then a frequent traveler’s best friend, had no idea of the web tsunami that Sabre would ride direct to consumers and liquidators within the decade.
The third leg on Crandall’s stool is one critical for every service business: the operations research models behind yield management. An intuitive part of business taught to undergrads now, yield management is the heart of a service’s profitability and boils down to one easy concept: if you have a number of consulting hours to sell or hotel rooms to rent in a single night or airline seats to fill on a flight, you can’t go back and recapture lost revenue. If that’s true, the business must do all it can to maximize (or optimize – just like search engine optimization) profits.
Any of the three initiatives alone would make Crandall a giant among marketers. That’s pretty heady space for a finance guy. And there is the apocryphal story of saving tens of thousands of dollars by removing olives from salads when food was served to passengers. That’s a tale for another day.