061: Southwest Airlines: Malice in Dallas

Welcome to Will It Stick? podcast, where hosts Melissa and Alexis cover creative advertising campaigns, PR stunts, and marketing activations that brands of all shapes and sizes pull, and dive into the research and data to understand if it worked and of course … Will It Stick?

Southwest has long been on my list to cover, but it was really hard to pick what direction to go but when I read about these two stunts fron early in Southwest’s history, I knew I had to cover them…. Because you’ll see that the reason Southwest is the arline it is today is because of these off-the-wall, creative stunts that founder Herb Kelleher pulled off. The culture of the airline internally and externally was born out of these stunts I’m going to cover. Very, very few brands successfully tie their purpose, vision and values in with their internal and external marketing as successfully and seamlessly as Southwest Airlines.

Just so we’re all starting with the same knowledge: Southwest’s Purpose is to connect people to what’s important in their lives through friendly, reliable, low-cost air travel.

Their vision: to be the world’s most loved, most efficient, and most profitable airline.

And Lex, these campaigns and stunts so clearly fit right into that vision and the purpose! So let’s dive in.

Pay Full Price, Get a Fifth

This stunt had a super smart strategy behind it. When Herb Kelleher decided to start his own airline in 1966 he knew he was going to be a major disruptor and a challenger. I mean right out of the gates, he faced years of legal battles to just launch his airline to be an intra-state airline serving Texas…flying in between Dallas, Houston and San Antonio. Right out of the gate, three airlines took legal action to prevent a new baby airline company from being born… they were obviously afraid of Herb’s vision…to cut prices to make airline travel affordable for commuter travelers who didn’t want all the frills, just a safe ride to their destination from city to city in Texas. But he won those battles and successfully began serving customers in 1971.

But even though they won the fight, those established airlines were PISSED. Those three airlines were Braniff, Trans-Texas Airways and Continental Airlines. So for a few years things were OK, and then in 1973 Southwest had three 737 jets and flew to those three Texas cities. Braniff was still extra pissed that Southwest even got off the ground at all, so they were determined to CRUSH Southwest financially. So, they dropped their prices as low as possible… so low that they were confident Southwest couldn’t even survive let alone compete.

Braniff cut its prices in half, so the Dallas to San Antonio route went from $26 to $13. At this time, Southwest was averaging something like 17 passengers per flight so that math just couldn’t possibly keep their infant airline afloat. Do that math real quick….$13 times 17 passengers…that’s $221 per flight. Even in 1973 terms, that was not enough to keep Southwest afloat. Herb saw two options: match the price and lose money and hope for the best, or get creative. And you know what he chose Lex? He chose to get freaking creative!

Southwest matched the $13 price, BUT with a caveat. You could choose the deal fare, or you could pay full price…$26 and you would receive either a fifth of Chivas Regal Scotch or a fifth of Canadian sipping whiskey as a gift. And you know what Lex…this worked inanely well. Why? Because almost all of the travlers on Southwest were business travelers…business travelers (almost exclusive dudes) who were not personally paying for their flights…they were expensing them. So with that, of course they chose the higher fare because they got free liquor for them… on their company’s dime.

This campaign worked! Passenger numbers increased to 75 per flight — about half of whom paid the full fare and added $40,000 revenue per month. It was so successful that Southwest became the biggest distributor of whiskey in Texas due to the number of gifts they were giving to customers.

Also, you may have noticed that Braniff no longer exists…it shut down in 1982. So that’s a HUGE win for Southwest.

Now, let’s hit for fast forward button to 1990. Southwest was crushing it. It had been almost 20 years since their first flight and they decided to launch a brand new slogan….Just Plane Smart. Get it? Plane, like PLANE. Cute. I love a good pun. There was a minor problem with this new tagline though. A small aviation sales and maintenance company, Stevens Aviation, had a tagline that was very similar…it was “Plane Smart” and they had been using it for years. Granted they werent technically in the same line of business exactly, but it was close enough. And, Stevens Aviation had trademarked their version of that tagline. So, a few months after Southwest launched their creative new tagline, Stevens Aviation got wind of this they didn’t go the typical route of calling lawyers, probably because they figured they wouldn’t win…Southwest was pretty big at this point. One senior exec took the problem into his own hands. He sent a letter directly to Herb and this is what it said:

Dear Mr. Kelleher:

We LOVE your new ads that use the clever, creative, effective “Plane Smart” theme! We can testify to its effectiveness since we’ve been using it in our own ads for a long time. In the true fun-loving spirit on which Southwest Airlines was founded, we challenge you to a duel to see who gets to keep “Plane Smart” — big ol’ Southwest or little bitty Stevens. (Please — no lawyers!) We trust that you accept this challenge in the spirit intended. … No litigiousness implied at all. We challenge you to a sleeves-up, best-two-out-of-three arm wrestling match between you and our chairman, at high noon on Monday, January 27, 1992…

Respectfully,

Stephen D. Townes

Executive Vice President

Stevens Aviation

P.S. Our chairman is a burly 38-year-old former weight lifter who can bench press a King Air — or something like that…

But if we’ve learned anything about Herb so far, he doesn’t ever take the typical route so how do you think he reacted, Lex? Well, before Stevens Aviation even got a response back, suddenly the CEO Kurt Herwald got a phone call from a journalist out of the blue about the proposed arm wrestling mach and Kurt got worried. So he called the Southwest offices directly and was shocked with the receptionist patched him right through to Herb. Kurt explained the proposed letter and that the media got wind of it, and Herb laughed and told Kurt that he had been the one to tip off the press. He LOVED the idea. And he agreed to it. He officially sent this letter back:

Dear Mr. Townes:

Our chairman can bench press a quart of Wild Turkey and five packs of cigarettes a day. He is also a fearsome competitor who resorts to kicking, biting, gouging, scratching, and hair pulling in order to win. When really pressed, he has also been known to beg, plead, whine, and sob piteously. Can your pusillanimous little wimp of a chairman stand up against the martial valor of our giant?

Best regards,

Herbert D. Kelleher

I had to look up pusillanimous, and it means timid.

So now that this unique agreement was reached, Herb knew that this was a huge PR opportunity for Southwest and for his newfound frenemy and he promised Stevens Aviation that he was going to promote the HELL out of it so it would benefit both brands, no matter the result of the match.

The match became known to the media as the Malice in Dallas, and the media ate up every minute of it. No one was surprised that Herb jumped on this – he was one of the most beloved, and wackiest CEOs that America had seen at the time…he was known as the kind of guy who would dress up as a Leprechan for St. Patricks’ Day, and he was always pushing the limits with out of the box ad campaigns.

Fans who were reading about the pending match in the newspaper and seeing it on TV sent him all kinds of gifts to get him ready for the battle…. Wheaties, spinach, Wild Turkey whiskey and someone even sent him anabolic steroids from Mexico.

They smartly decided to make this a huge spectacle. Southwest chose the Dallas Sportatorium – an old wrestling venue – to hose the event because they were confident that could easily fill the 4,500 seats with Southwest employees alone! And the Southwest marketing team and Herb were SO SMART HERE, and really years ahead of their time. They actually produced a short faux documentary chronicling Herb training for the big match to get the public pumped up about it.

https://www.youtube.com/watch?v=vP7BBoAHdcc

This mockumentary is hilarious!! Herb is surrounded by an enthusiastic group of Southwest employees, including a class of brand new flight attednants. It shows him progressing from struggling with sit-ups and jumping jacks, to easily curling oversized bottles of Wild Turkey. IT’s SO FUNNY.

So on March 20, 1992, spectators packed the stadium. They saw a red-robed “Killer Kurt” Herwald in a polo shirt, slacks, and sunglasses strode into the ring followed by toothpick-twirling “Smokin’ Herb” Kelleher, clad in sweatband, white bathrobe, and black boots. Taped on each boot was a pack of cigarettes, Southwest stickers, and an airline-sized bottle of whiskey. What a look!

Behind the scenes, Herb and Herwald completely choreographed the event as if they were staging a real wrestling match. But the result was totally pre-arranged.

When it was showtime, the crowd watches as Herb slowly rises from a recliner placed in his corner and locks his right hand with Herwald’s own. As the referee called for the competitors to place their left arms down, Herb’s face turned from supreme confidence to something approaching panic.

Reaching frantically with his left hand, which still held a cigarette, we see Herb plead with the referee for a quick bathroom break. Herwald momentarily loosened his grip. He’d fallen right into Herb’s trap. As Herwald relaxed his arm, Herb put all of his strength into pinning Herwald’s arm before the referee could even react to the question.

After leaping around the ring, pumping his fists in exalted victory, Herb was told his win was null and void, as he’d broken the rules. Herb, feigning shock, yelled at the referee: “I didn’t know there were any rules!”

As their right hands clasped a second time, Herwald took an immediate lead, pulling Herb’s hand over the midline. For the next 20 seconds, they flexed and stretched—with, in Herb’s case, veins practically popping through his neck. At one point, Herb appeared to bring Herwald’s arm back to the center, but it was merely a last-gasp push in a fight destined to go to the “better” man. Within seconds, Herb’s arm was pinned down hard, knuckles slammed to the table. Herb lost!

Everyone was laughing and cheering! Both CEOs announced they’d be making donations to their respective charities in honor of a hard-fought match.

Herb congratulated his opponent Herwald, who disclosed he was allowing Southwest to continue to use its Just Plane Smart slogan. Herb praised his opponent’s selflessness before calling for a stretcher to carry him from the arena.

The whole thing was SO AMAZING. What a way to turn what could have been a horrific, ugly, expensive legal battle with no real winner into an amazing and fun PR stunt that made both companies look good, and got their employees SO pumped up along wth driving consuner awareness of both brands.

And Lex, the media ate this whole thing up! In addition to local newspaper, radio, and TV coverage, NBC Nightly News with Tom Brokaw aired an extended segment shortly after the event. President George H. W. Bush wrote Herb an effusive note. And praise from Employees and Customers flooded into Southwest offices. Can you imagine that abundance of applications Southwest probably got after this? Who wouldn’t want to work for a CEO like that!

It’s estimated that Southwest earned as much as $6 million in publicity as a result of this. And Herwald himself said that the event boosted the name recognition of Stevens Aviation so much that the company enjoyed 25 percent annual growth for the next four years.

Today, his customized black “Malice” boots have been preserved and enshrined in an exhibit at Southwest Headquarters in Dallas. The coolest thing, in my opinion about this whole thing, is how Herb turned this into the perfect example of how he wanted Southwest’s employees to approach their work. Herb had the guts to cast aside his CEO status to make a crowd feel excited, to laugh, and that naturally gave Southwest employees the creative license to find their own unique ways to make customers feel loved and to entertain them. That’s a big part of why we see Southwest employees living that every time we fly – from the songs they sing on the intercoms on the plane, to the random trivia games they will play when flights are delayed at the gate. They have fun with it!