When the going’s not so easy

Critics lambast the easy brand’s expansion strategy as ill thought-out, and say the business is too reliant on easyJet, and its 200m forecast profits. But Stelios, in an exclusive interview with MW, though he is the first to admit mistakes, says without risk there is no gain. By John Reynolds

SteliosStelios Haji-Ioannou, the recently knighted Greek entrepreneur, turns 40 today (Wednesday) but his desire to extend the easy brand shows no sign of abating.

His birthday celebrations will taste all the sweeter after easyJet, the pioneering low-cost airline he created in 1995 and where he remains the largest shareholder, said last week that it expects profits to increase by up to 50% to £200m this year.

The budget airline remains Stelios’ biggest earner but its meteoric rise and success over the past 12 years have not been mirrored across the easy portfolio of 16 other brands, which have been launched through the serial entrepreneur’s investment vehicle easyGroup.

Speaking exclusively to Marketing Week, Stelios admits his biggest failure was internet cafés (easyInternetcafé) and observers have questioned the wisdom of extending the easy brand in what could be deemed a scattergun approach.

EasyCinema, for instance, is described as a "misguided venture" by one source, while Stelios also had his fingers burnt with his "virtual" mobile service easyMobile.

Flight of fancy
Andy Nairn, planning director at advertising agency Miles Calcraft Briginshaw Duffy (MCBD), says some of the ventures have been opportunistic and launched without rationale.

He adds: "I think he [Stelios] has literally exported the success behind easyJet into the other businesses without understanding what has made easyJet successful at brand level."

But even his harshest critics cannot deny that the easy brand has become synonymous with value, albeit on the back of easyJet’s success.

Stelios says value never goes out of fashion and adds: "The easyGroup, which is my own investment vehicle, is there to protect and extend the brand to more products and services. My desire has been to keep diversifying away from the airline industry to spread my risk a little bit. Since the airline, I have launched another 16 brands. Some are doing better than others but I am proud to say that every single one of them is still trading and making a difference in people’s lives in some way."

The travel companies – easyHotel, easyCar, easyBus and easyCruise – are performing "pretty well", according to Stelios, while analysts say ancillary revenues at easyJet, such as sales of insurance, will help life margins at Europe’s number two low-cost carrier.

The past few years have seen the group launch a range of diverse business offerings, such as easyMusic, online care insurance through easyMoney and easyVan.

Next off the conveyer belt will be easyOffice, which will offer business office space. The group, however, has adapted its business model and now operates a mix of approaches from brand licensing to franchising and outright ownership.

EasyCruise, for instance, is now run as a franchise business and easyJet is considering its first deal to franchise its brand to Saudi Arabian airline National Air Services.

With such a multitude of businesses to oversee and the long-term prospect of the group being floated on the stock market to ensure future growth, it seems that Stelios is crucial to the easy brand.

Stelios questions this: "I think easyJet will do well regardless of what happens to me. The rest of the easyGroup still needs me, although I hope that a couple of the others might be able to claim independence from their founder soon.

"My role is crucial at the start when I can take all the risky decisions and pay for the mistakes while we are still trying to find the right business model. Moreover, I provide free publicity before the company can afford big advertising budgets."

Leader for the brand
For marketers, Stelios is a flag-bearer for branding. EasyJet enjoys massive brand awareness and serves as an example of how the use of simple branding techniques can redefine markets.

Efficient and clever marketing will be crucial to future growth, but whether that comes from in house or through advertising agencies across the group remains to be seen.

Until the recruitment of Ogilvy and Mather – now Ogilvy Advertising – last year, following a controversial pitch for easyJet’s £50m pan-European advertising business, all the airline’s advertising was created in house.

Rita%20CliftonInterbrand chairman Rita Clifton believes the move signifies a growing maturity in Stelios’ approach to marketing.

"He is taking more of a measured view [to marketing]," she says. "In the early days there were lots of stunts, but he now talks in a serious and knowledgeable way. The appointment of Ogilvy shows that simple doesn’t have to mean cheap. He is clearly competing in markets where some quality does matter. When dealing with airlines and cruises, consumers need to know it is a professional organisation."

Nairn agrees, adding: "EasyJet was massively in need of better communications. Its in-house communications were all over the place, but it now has more sensible, manifesto-style advertising, which illustrates the advantage of the product."

Virgin complex
EasyGroup has often been compared to Virgin, not least because the two brands are headed by their famous founders, both of whom share a penchant for self-publicity. But observers claim Sir Richard Branson’s brand values are more complex and have more substance. They say Virgin is centred on entertainment and excitement, whereas easy is simply about value – a fact that Stelios is keen to highlight.

"Virgin can no longer claim to be offering value for money," says Stelios. "It’s largely an elitist brand that charges the same if not more than others like BA. I guess it has become more about a lifestyle – we are always great value."

But one observer says that Stelios and the easy brand can learn from Virgin in its "tactful" use of Branson.

BransonThe source says: "Virgin has recognised that it can’t pin everything on Branson because it gets very irritating to see the same guy popping up all over the place. They instead use him sparingly. With the easy brand, there was a lot of Stelios. Now it’s time to use him tactfully to define the personality of the brand."

But what seems certain, is that Stelios will continue to take risks and try to defy his critics.

He adds: "My view about entrepreneurship is that it is all about managing risk. If you don’t take enough risk you might avoid failure but it’s unlikely that your returns will be superior. There is no reward without risk. Just make sure you can survive the bets you are taking."


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