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How Southwest Airlines Made Their Money Back From Sponsoring BlogWorld

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… by Walt Ribeiro

Disclosure: I am not affiliated with BlogWorld or Southwest.

Back in 2009 I was asked to speak at BlogWorld, and I was immediately excited to present to other artists and entrepreneurs about how they can apply what I learned from growing my online presence. BlogWorld has a rich and well-informed online community, so I was speaking to a savvy and interested audience – a presenters dream.

But I live in New York City, and BlogWorld was in Las Vegas. So Southwest offered vouchers to presenters, and although I was unsure about flying a new airline, I wasn’t going to say no. As Southwest would find out, they made their money back ten-fold.

Bloggers – what Blogworld has that no other conference has:
Bloggers read a lot of blogs, podcaster listen to a lot of podcasters. And ultimately, the attendees at Blogworld have a collective audience of millions of followers.

If I promote a product in a newspaper, it gets seen by 20,000 people, and then the next day it’s as if it never existed. But if I promote my company through Blogworld, then it lives online – forever. That, and the fact that Bloggers will share, talk, tweet, blog, facebook, and praise the company to their community is huge, and creates a sharing ripple effect that traditional media can’t replicate.

Case in point – not only has Southwest made back their money on my purchases alone, but I tweeted about it and documented the entire experience for my followers.

Loss Leaders create new customers:
You can taste test a beer at a bar before you buy it, and you can testdrive a car before purchasing. But then how come you can’t test ride a plane? Or a train ride?

Loss leaders have been around since commerce has been around. Freemium models are a type of loss leader, where companies give intro features in hopes that you become a paying member for ‘pro’ features. Internships are loss leaders where employees hope to get their foot in the door and become a part of the full-time staff.

So when Southwest was offering me a free flight, it surely was an expensive loss leader. But the upside has been much greater – not only do I now use them exclusively since that day going forward, but I even became a credit card member of theirs.

So what does this mean? Should airlines give away free tickets to new customers? Wouldn’t be a bad idea. It’s the only way I would have ever tried the product before paying. But one thing is for sure, you have to spend money before you make money – the difference is in where you spend that money, and in today’s online world it’s now cheaper, more viral, more fun, and trackable. That’s the power of social media’s biggest conference and of social media itself.

BlogWorld contributor Walt Ribeiro is founder of For Orchestra where he arranges pop and rock songs for orchestra every week – from Lady Gaga, Slayer, and more. He frequents many social media, tech, and music conferences, and spoke at BlogWorld in 2009 and 2010.

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