We are not a Commodity
Contrary to what the vast majority of people believed or believe about air travel, Kelleher refused to think of it as a commodity business. Kelleher went further and even said that the airline business itself wasn't a commodity business. With Southwest Airlines (LUV) at least, that may have been true.
As he said, "We market ourselves based on the personality and spirit of ourselves." In other words they created a business culture that resulted in something unique, which anyone that has traveled on Southwest knows about. It was that which they marketed, not simply getting on an airplane to go somewhere.
The genius of it was that I believe he did take what was a commodity business, refused to let that dictate his strategy, and for Southwest Airlines made it into something that was truly unique in the minds of customers, which gave them a competitive advantage.
He added that it wasn't without risk though as if you stake out that type of claim, customers will let you know if you're wrong - "and with a vengeance."
What he meant by all that is if you say something isn't a commodity, and position yourself as something unique in your industry, you won't be able to fool the customer; neither can you ignore them. What you have must be real and truly different from the experiences offered by other businesses. That is the only way you can carve out a niche in a business that in reality has become commoditized.
Other Herb Kelleher Sources:
ENTREPRENEURS: BORN OR MADE? A CONVERSATION WITH HERB KELLEHER OF SOUTHWEST AIRLINES
Herb Kelleher An Entrepreneur For All Seasons
Herb Kelleher: The Thought Leader Interview
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