Around 1988/89 I attended the London bash to celebrate Tipperary winning the All Ireland Hurling Championship. One of the guests that night was Tipp businessman Tony Ryan, co-founder of Ryanair. The establishment of the airline and its growth was something most people from Ireland were proud of at a time before the Celtic Tiger when there was little good economic news. Roll forward about twenty five years and Ryaniar was synonymous with the worst in customer service, the only ‘experience’ many customers had was dreadful. The airline was no longer something to hold up as a great success of Irish entrepreneurship, this was no Virgin Atlantic.
This makes today’s customer service revolution at Ryanair all the more astounding. Their financial results were published a few weeks ago and show a full 66% increase in annual profits, yet just one year ago the CEO Michael O’Leary was finally admitting that they had a problem with customer service.
Ryanair has always sold their product on price. Great deals can be found on their website and the airline has built a reputation for offering a great price, but with very few frills. They revolutionsed the airline business in Europe and are now one of the biggest airlines in the world when measured by the number of passengers carried.
But sometimes competing on price alone can fail. If the market changes and competitors start offering similar prices, or slightly higher prices with improved service, then there is a problem. If your strategy is price alone then there is only one possible reaction to competition – lower the prices even further.
A year ago O’Leary hired Kenny Jacobs to head up marketing for Ryanair. With an extensive and comprehensive background in online and offline retail (Moneysupermarket.com, Tesco, Procter & Gamble), he has been credited with the new successful image Ryanair is presenting to the market today. I think it’s safe to say he knows a thing or two about customer service and what good customer experience can do for a brand and its profits.
Jacobs revamped the website and app and relaxed restrictions on baggage and seating – making the process of buying a flight easier and the experience of taking a Ryanair flight more pleasant. Passenger traffic has increased 11% in the past year.
What I think is really important to note here is not just that Ryanair finally saw the importance of great customer service, but that the company believes that customer service is how customers see the brand. Jacobs is the head of marketing and he clearly sees that marketing is just as much about how you treat your customers as planning a promotional campaign or advertising.
This joined-up approach to planning how customers see a brand has clearly worked for Ryanair, they have more passengers and profits are up, but I think this will be an increasing common area of focus. More brands will see that they need to strategically plan how customers see them and this means a combined marketing and customer service function.
Have you seen other companies taking this joined-up approach to how customers see them? Leave a comment here or tweet me on @williamvcarson.
Photo by Paul licensed under Creative Commons.