commentary How not to win new customers for your online business.
I'm not writing this column from somewhere exotic. Like Melbourne. Or Hobart. As with thousands of other people, my dreams of a $29 holiday were dashed by the inability of Jetstar's systems to cope with demand. According to Jetstar, the system didn't fail -- it was just "highly stretched" with long delays. According to The Australian, the airline's Web site was unable to cope with the extraordinary demand and only a little more than half the cheap fares offered were snapped up on the first day.
Personally, I would describe a complete inability to access the site's home page for over four hours (experienced by a number of colleagues) and then finally booking a return flight to see the system crash when attempting to pay as being a little more than "stretched". The Financial Review went as far as describing the Web site failure as "one of the most high-profile Internet failures in recent years, along with the outages at Westpac's online banking site last year and the mishaps at the Big Brother Web site during the launch of the reality television show."
So, what are the lessons from a technological and marketing perspective?
Jetstar's Web site handled (or struggled to handle) over 200 bookings per minute and 600,000 hits an hour. More than 60,000 tickets were sold in the first 10 hours and 5.5 million hits logged. In comparison, eBay's US-based PayPal Web site processes an average of 440,000 payments per day -- that's 305 per hour, every hour. Global sports sites (during events such as Wimbledon) handle a peak volume of over 430,000 hits per minute. The highest volume Australian Web sites such as ninemsn have an average of over 10,000 visitors per hour (that's unique visitors, not hits) with much higher peak volume. At the extreme end, a transactional site such as the London Stock Exchange handles over 3000 transactions per second on a cluster of Windows servers.
The point is: the technology to handle this kind of peak traffic load is available today. So is load testing software to simulate half of Australia attempting to buy a $29 air ticket on the same day. For an airline committed to delivering low fares via the Web -- and the possibility of more competitive offers in the future -- you would expect the IT infrastructure to be over-engineered for these kind of events. Consider it a very basic form of "aligning business and IT"!
It's a more complex argument from an e-marketing perspective. I would suggest, based on very rough numbers and anecdotal evidence (that's why I work in marketing) that for each person who succeeded in purchasing a flight, another two people gave up. That equates to 400 irate "non-customers" every minute. I can't think of a faster way to damage a brand on Day One -- a Flight Centre sales consultant in Brisbane reported many customers being angered by the collapse in the booking system: "They all came flooding in this morning -- and got shi**y and left".
On the other hand, can successfully creating such a high level of demand that only 33 percent of customers actually receive what they want be considered poor marketing? It could be seen simply as a failure to anticipate demand, or a case of marketing over-achievement. The online version of releasing a new Sony Playstation in Japan, where it's impossible to satisfy initial demand.
I still see it as an expensive and damaging exercise. Marketing is increasingly incorporating technology as part of the delivery and fulfilment mechanism. Ensuring that the Web site can cope is not just an MIS function. Sending an e-mail to every Qantas Club member advertising the Jetstar Web site -- when it's clear that the site is failing -- is not smart marketing. Ultimately a $29 fare after taxes translates to about $1 for the airline. It's a loss leader. So if you expect that demand will exceed supply on an unprofitable product, you want to ensure people have an enjoyable online experience, maybe even purchase a more expensive fare.
From a marketing and technology perspective, Jetstar isn't a case study on how to launch a largely Web-based business!
Oliver Descoeudres is marketing manager at network IP/Internet network infrastructure builder and solutions provider NetStar Australia.
This article was first published in Technology & Business magazine.
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