Businesses have not always been aware of the importance of customer service to its success. A recent example of just how important came with Ryanair’s 6 Month Financial Results to the end of September.
All major financial metrics were up: passenger numbers, after tax profits, revenues, load factor and average fares. Naturally other factors are impacting positively on Ryanair’s recent performances (lower oil prices, pick-up in consumer sentiment, more forward bookings, etc.) but as was well documented earlier in the year Ryanair has changed their customer interaction approach from a “take it or leave it” philosophy to more of a “how can we help” model.
Previously, Ryanair built their success on a “no nonsense, pack them in” business model, citing industry low prices as reason enough for consumers to use their service over competitors. Very little attention was paid to customer service, resulting in regular complaints, delays and uncompromising operational policies; boarding scrambles for unreserved seats, stranded passengers when flights were disrupted and high fees for small issues like replacement tickets.
Earlier this year the penny appeared to drop at Ryanair that things didn’t have to be this way and that for very little cost they could make their customers much happier through simple customer service practices. Customer Service Consultants were brought in and a range of new policies were implemented. Seating allocations were brought in (albeit at extra cost), baggage policies were reviewed, new procedures were put in place to assist passengers who experienced excessive delays, staff training was upgraded to reflect a more customer friendly approach and the company’s communication message to customers changed to more of a consumer orientated tone. The result has been a significant increase in profitability and a 6 month increase in the share price. The new customer service approach has undoubtedly been a factor in the rise in passenger numbers and more people are now willing to try the Ryanair experience. This recent success has shown what a positive customer policy can do and is a lesson in what treating customers well can achieve.