If there’s one thing I’ve learned throughout my career in marketing, it’s that your brand is your promise to your customers—the trust you build over time. When companies compromise on that promise, the fallout can be catastrophic.
Recently, Southwest Airlines made headlines by scrapping its signature “bags fly free” policy and ending open seating. Although these changes were foreshadowed last year, the reality of them shocked loyal customers and set social media abuzz. For over 60 years, these policies weren’t just perks—they were the very essence of Southwest’s brand identity, differentiating the airline as a people-first, customer-friendly carrier.
But now, under mounting pressure from Elliott Investment Management, the investment firm and activist hedge fund that bought a $1.9 billion stake in the company in June 2024, it seems Southwest is shifting its focus from genuine customer care to shareholder returns.
According to Reuters, the decision to charge for checked bags was a reaction to underwhelming earnings and the relentless pressure to revamp the business model. And as the Wall Street Journal’s opinion column, “Dearly Beloved Travelers, We Gather Today to Mourn Southwest,” made clear, the backlash has been swift and unforgiving.
In my view, this is a prime example of what happens when companies abandon their brand principles for short-term profit.
Why Abandoning Brand Fundamentals is a Lose-Lose
In the race to appease shareholders, cutting (or completely eliminating) your brand differentiators is often a short-term fix with long-term consequences:
- Eroding Consumer Trust: People chose Southwest precisely because it wasn’t like the other guys. Now, they’ve blurred the line between themselves and every other airline that nickel-and-dimes travelers. Once trust is broken, it’s incredibly difficult to win back.
- Inviting Negative Press: For a company the size of Southwest, one misstep can spark a PR nightmare. When headlines like “Dearly Beloved Travelers” start trending, it signals that customers see the brand as greedy or out-of-touch.
- Boosting the Competition: If a brand stops living up to its promise, or if it no longer feels different, customers may run to a competitor—one with more pristine planes, more convenient flight times, better Wi-Fi or bigger seats. By sacrificing a signature perk, Southwest may lose its loyal base—and no amount of new customer acquisition can easily make up for that loss.
When Southwest originally laid out the plans for its empire on the back of a cocktail napkin, it did so on the foundation of unique, customer-centric policies. Those policies not only set it apart from the competition—they forged a loyal customer base that trusted the airline to deliver. Now, by sacrificing that identity, Southwest risks undermining everything that once made it successful.
Activist investors and hedge funds, like Elliott Investment Management, are increasingly pushing companies to prioritize short-term financial metrics over long-term brand equity. With 243 activist campaigns reported globally last year—the highest since 2018—the pressure to deliver quick wins often overshadows what truly matters: building and maintaining customer trust.
Consider Delta’s recent overhaul of its SkyMiles loyalty program. After tightening access to elite status and premium lounges, Delta’s CEO Ed Bastian quickly acknowledged that the company “probably went too far.” The swift public backlash forced a re-evaluation of the strategy. And this pattern isn’t isolated to airlines. Other Fortune 500 companies, like Target, have seen negative consequences from rolling back initiatives that are popular with its customers.
For me, these stories highlight one clear lesson: nothing is more damaging to a brand than sacrificing its core values for profit. Whether it’s charging for checked bags, overhauling a loyalty program or cutting back on the very things that make your company unique, the long-term consequences can be severe. Consumers notice these shifts, and they know when a company has lost its way.
Options for Southwest (and Lessons for Everyone Else)
So, what are Southwest’s options now? How can they recover from a decision that risks their very identity?
- Stay the Course and Accept the Consequences: Some brands dig in, hoping the uproar will blow over. But while consumers might have short memories, damage to brand trust can linger for years—especially if competitors seize the opportunity to capitalize on your missteps.
- Listen to Customers and Revisit the Changes: The humility to reverse a bad decision can send a powerful message: “We heard you, we respect you, and we value your loyalty.” Delta’s quick about-face on its SkyMiles changes is a case in point.
- Find a Middle Path While Staying Authentic: If you must evolve your business model, do it in a way that aligns with your core values. For instance, charge for a second bag but keep the first free, or tie fees to a loyalty perk that still offers value to frequent fliers.
In the end, nothing good happens when companies abandon their brand principles. Southwest’s moves have created a PR nightmare and risk long-term damage to customer trust. And these aren’t just isolated incidents—they serve as cautionary tales for any business caught between short-term pressures and long-term brand equity.
If you’re facing similar challenges—if you feel that your marketing strategy is being pulled off course by pressures that conflict with your core values—I’d love to chat. Let’s explore how a steadfast, customer-first approach can drive long-term success for your business.
Kedran Brush, Brand825’s Co-Founder and CEO, has more than 28 years of marketing leadership experience at the SVP and CMO levels, including revenue growth, customer satisfaction, brand awareness, etc. When she’s not helping brands be their best, Kedran can be found jumping out of planes, at Tennessee Titans games and watching her two boys crush it on the baseball diamond.
