Do you cuddle your customers? 

What a difference a cuddle makes…ask Ryanair. Their new TV ad shows the pre cuddle days, 30 years ago and the post-cuddle days of now. Haven’t Ryanair come a long way?

Ryanair 30 years

Check out their latest TV commercial on https://www.youtube.com/watch?v=SvVRiS1BLkI&spfreload=10

I’ve long been an admirer of Ryanair, the brand and its boss Michael O’Leary, one of life’s great disrupters. What Ryanair and O’Leary have achieved in the airline sector is truly fantastic!

Ryanair, over the past 30 years, have trained us as passengers to pack lightly, to queue mindlessly, to clap hands when the plane lands safely, to struggle with a frustrating website, to pack the contents of our handbag (us ladies primarily) into our pockets and our underwear, to wear multiple outfits to save on suitcase space and to accept abuse from the airline staff. We may not have liked it, but we certainly lumped it! And in doing so changed some of our behaviour forever! If the price was right we would accept landing at a destination 100kms away from where we really wanted to go and to accept poor customer service. In fact if the price was so low we would do almost anything that was asked of us…begrudgingly!

Over time, however many competitors were forced to introduce low(er) cost fares. And slowly but surely the cost of airline travel came down. So much so, that if given a choice between Ryanair at €19.99 and Are Lingus @ €39.99 many of us would opt for Are Lingus with it’s low(ish) cost fair but excellent customer service.

Then in 2013 four things happened;

  1. O’Leary announced that profits were likely to fall below projections for the year
  2. The airline also received some bad publicity  after Dublin-based surgeon Muhammad Taufiq al Sattar was charged €188 to change his flight to Birmingham after the death of his wife and three children in a house fire
  3. The airline was voted the worst of the 100 biggest brands serving the British market by readers of consumer magazine Which
  4. Shareholders complained to O’Leary and the Ryanair Board about the negative impact that poor customer service was having on sales.

Clearly O’Leary and the team had to start to do things differently, where customers were concerned. They introduced the ‘always getting better programme’ and started to listen to their customers and to take on board was was pissing Ryanair customers off. Ryanair now call passengers ‘customers’, which was a big cultural change. They have moved from a ‘passenger acquisition’ model to a ‘customer retention’ model. Customer service and likability are key to getting repeat business and to transforming a customer to a retained or repeat customer. They have moved from transactions to relationships. The hypothesis is – better experience, better retention, better return to shareholders. Ryanair are modelling themselves on Aldi, H&M and IKEA, ‘Smart Living Brands’

So has this customer-centric move worked for Ryanair? Here are some stats that would indicate that it is a more successful business model. Ryanair has achieved the following in the past year

  • 81m to 90m passengers
  • Load factor up by 6% – most airlines would be happy with 0.5%
  • 12 new customers on each flight
  • Share price continues its upward trajectory

Ryanair Share Price

What’s the moral of this story? – CUDDLE YOUR CUSTOMERS. It’s great for customers and it’s great for business!

If Ryanair can listen to their customers and say Sorry…anyone can!

HAPPY CUDDLING!

Loretta Dignam

http://www.ldconsulting.ie

Loretta, owner of Loretta Dignam Consulting is a customer -centric marketing consultant with 25+ years of experience with major blue chip multinationals, such as Mars Inc, Diageo Plc and Kerry Group

Advertisements

2 thoughts on “Do you cuddle your customers? 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s