Ryanair: Low Prices + Unhappy Customers = CX Success Story?

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Gartner defines CEM as as: “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”

Most of the commentary and research around customer experiences is about how to increase customer satisfaction or loyalty. More satisfied/loyal customers are more likely to buy more, return again, and refer others. Or so the theory goes according to the “loyalty effect.”

If all goes well (assuming more loyal customers are actually profitable, and costs of improvements are well spent), the company should see more revenue over the long haul.

So the linkage is: Improve CX > Increase Loyalty > Grow Revenue.

But some companies are able to grow revenue with unhappy customers. Examples include companies that focus on low prices above all else. Customers are loyal in the sense that they are repeat buyers, but not necessarily highly satisfied or brand advocates.

Southwest is one of the rare cases where low prices and high customer satisfaction go together.

But Ryanir has been hugely successful with the more common pairing of low prices with low customer satisfaction. Despite attempts to improve customer service and treat customers better (Always Getting Better), Ryanair is still getting dinged for poor passenger experiences. Yet Ryanair is the fastest growing and most profitable airline in Europe.

The formula appears to be: Low Prices > Repeat Customers > Grow Revenue.

Customers are not necessarily happy, yet the low prices bring them back because that’s what is most important.

Since price is part of the customer experience, is Ryanair a CX success story? Or is higher levels of customer satisfaction required, as the Gartner definition implies?

47 COMMENTS

  1. From my point of view this is short term success. Here the key is that maybe competitors do not offer a great differenciation offer/added value/good experience to make customers pay more than Ryanair prices… but I am sure that will change in the future. Strategies based only in price are not easy to maintain in long term

  2. It’s an interesting point. One of the keys to customer loyalty is transparency. No one likes to feel like they’ve been shafted with hidden costs.

    If you fly at low cost you at least a) have low expectations and b) know exactly what you are paying for.

    RyanAirs online UI/UX is completely transparent in what products cost what and are straightforward to follow and fill out to fulfillment.

    Would you feel ‘loyalty’ to that? Probably not, but for those who are cost conscious (which are obviously and understandably many) that’s where the repeat sales come in.

    The real question is , in the age of the fickle and information empowered consumer – how do the high end airline brands maintain their high levels of CEM without lowering their costs? Is there a Third Way?

    People tell me loyalty is dead. That people don’t want to sign up for yet another loyalty card with points to earn and burn. That hyper personalization will make you feel individually valued without joining ‘tiers’ that lump you in with others like so much cattle.

    And yet quantus frequent flier program makes more profit than the airline. By a margin.

    Interesting times!

  3. Bob, First there is a segment of the customers that buy on price. The experience is not important. The total value they get is better than paying a higher price and getting a better experience,
    Your article makes the point that satisfaction/experience does not necessarily lead to loyalty, something Ray ordupleski proved at AT&T in the 1980s. Or poor experience will not make you loyal. Ryanair proves otherwise. It is the value that the customer perceives that causes purchase, re-purchase and loyalty.
    Is this too complicated to grasp?

  4. Most of us expect vendors to strive for the best possible customer experiences. That said I’m inclined to say Ryanair is a success because they’ve been able to “toe the line” by understanding what people will tolerate in exchange for cheaper fares.

    Customer service in air travel has been in a downward spiral for decades. I’d say airlines have been effective in gaining loyalty for their frequent (usually business) flyers that appreciate the perks of priority boarding, seating, etc. Nobody want a middle seat on a NY to LA flight.

  5. RyanAir is indeed an interesting case to look at Bob. We know from research that somewhere between 13% and 17% (depending on the study) of people will choose lower price over noticeably-better customer service. This automatically gives RyanAir a chunk of the pie.

    The interesting piece of these studies, though, is the word ‘noticeably.’ There are many airlines that may do better than RyanAir in the surveys, but they are either not consistent enough nor noticeably better enough to sway customers in their favour.

    Transactionally speaking, RyanAir is clearly a success. They are okay with the CX gap, and their ongoing efforts to keep the gap to a minimum is a good strategy. I am not sure, however, that there is ‘loyalty’ beyond that 13-17 percent of people. I’m also not convinced that there is a clear correlation between ‘satisfaction’ and ‘loyalty.’

    Great topic – Thanks!

  6. In many ways, Ryanair is the CX exception that proves the rule. Passengers, somewhat like a counter-culture group who love to drive beat-up Volvos when they can afford new Porches, almost have a level of pride in being able to endure the poor level of service offered by the airline, and coming out the other end of the worm-hole having saved a bundle.

    Reminds me of the terrible reviews of for Fry’s Electronics Stores for years, both as a retailer and an employer ( https://frys-electronics.pissedconsumer.com/review.html). Like Ryanair, Fry’s is the rare exception that proves the rule. Customers know, in advance, that they are going to be confronted by aggressive store salespeople and, if there’s a problem with anything they purchase, poor customer support. Yet, the point of pride is enduring all of this while getting a low price. It’s something of distinction, like driving an old, beat-up Volvo..

    I’d neither fly Ryanair nor shop Fry’s; but, then, I don’t have sadomasochistic tendencies.

  7. Ok, let me make sure I’m understanding…

    If a company can cut prices and grow profitably *without* satisfied customers, that is considered a “CX success story.”

  8. Not sure I’d phrase it that way Bob. RyanAir does have satisfied customers. The reality is that price is a dominant factor in CX for a segment of the population, and that’s who they are attracting.

    CX is, in many ways, relative. A math equation. Which is more compelling: horrid service, processes and practices at low price; or semi-horrid service, processes and practices at a high price? Not everyone will give the same answer.

  9. Shaun’s making an important point here. Satisfaction as a measure and state of mind is tactical, functional, transactional, passive, and attitudinal. It sometimes may not drive loyalty behavior, which is both pragmatically-based and emotionally-based. Product or service $$$, especially really low $$$, hits a basic financial well-being emotional chord, and can leverage customer actions. In the case of Ryanair, the airline is safe and cheap, which, despite terrible service and inconsiderate passenger processes, seems to be enough of a motivator. From a CX perspective, this doesn’t often succeed – – but it is working for Ryanair.

  10. Michael, CX theory should not make exceptions for cases like RyanAir. CX must work for all cases. If not, we should examine whether the theory is correct in this case

  11. Shaun, you’re right. Ryanair surely has some satisfied customers.

    What I meant, but stated poorly, was that Ryanair has lower levels of customer satisfaction than its competitors in Europe. It was recently voted worst in Europe in a independent survey, and has a long record of low customer satisfaction. [Source]

    “Europe’s safest and most popular airline, Ryanair, has come joint last in a Which? survey of passenger satisfaction. Readers of the consumer magazine rated it lowest out of 20 airlines, alongside Vueling of Spain — a sister carrier of British Airways.

    The Which? survey, involving 11,625 “member experiences”, looked at a range of issues including food and drink, seat comfort and overall value for money. It also analysed Civil Aviation Authority punctuality data.”

    The question I’m trying to get answered: Do you need high(er) levels of customer satisfaction to be considered a CX success? It seems to me that if price is part of CX, and low prices generate profitable growth, that customer satisfaction is not necessarily required.

    In other words, CX success mean profitable growth by whatever means required. Some (most?) do it by attempting to improve customer satisfaction, thereby improving loyalty, and thus increasing revenue. This is what most CX pros write about.

    I never see anyone writing about low prices = CX success — unless it also includes high customer satisfaction like Southwest.

    So once again, is Ryanair a CX success story, or not?

  12. Bob,

    I think we are confusing strategies here. Brands can compete in a number of ways. Using one particular strategy model that I like by Treacy and Wiersema, organisations can compete through Product Leadership (Bose for example), Customer Intimacy – what we would call CX (Ritz-Carlton for example) or Operational Efficiency which leads to low price. (Lidl for example).

    Clearly Ryanair uses an operational efficiency/low price business model. In fact their efficiency in terms of punctuality etc, is much better than British Airways, an airline that used to compete on Customer Intimacy but is now just plain confused having recruited their CEO from Vueling who is bringing in low-cost tactics.

    The biggest mistake I see is organisations assuming that they should differentiate on their customer experience. Not necessarily. It depends on the market and your competitive set. You can’t afford to invest in all three strategies because if you are a Product Leader, it is all about R&D and innovation, if you are differentiating through CX you need to invest in your people and if you are competing on price you need really good processes and technology and minimise the use of people.

    Now the best brands are so good that they create a great customer experience by differentiating on more than one strategy. (Amazon and Apple for example). But it is very difficult to compete on all three because they require quite different value chains and cultures. (Amazon does not invest in its people!)

    So, all of which to say that price is what you pay for the benefits received whichever strategy you adopt. Price is related to satisfaction whatever your strategy and not limited to customer experience.

    So to answer your question, Ryanair is an example of a highly successful low-cost strategy and, I would argue, using the definition of satisfaction is what you pay for what you get, does provide satisfaction otherwise it would not have grown to become Europe’s largest carrier. However, it is emphatically not a CX success story.

  13. This question often pops up….I would argue that if you are not delivering on customers expectations you won’t be in business for long unless there are no alternatives. However whether customers are ‘happy’ or not depends on what part of the experience you are asking about.

    “Companies that focus on low prices above all else” know they are a price leader and provide that, consistently to their customers. That is their value prop. Their customers know they are giving up some ‘perks’ for that lower price. Are they ‘happy’ with some aspects of the experience?…well no…but they know what they are getting into when they engage with that low cost brand. They have prioritized price and are ‘happy’ with that price if it is lowest enough to justify the abdication of other services. If the low cost brands delivers on its promise it is still providing a customer experience consistent with it’s value prop. This is why ops cx metrics can have a big disconnect with metrics like NPS. An electronics retailer could be a complete mess with bad parking, no customer service, and stuff strewn about…but if they have low prices…perhaps all can be forgiven.

    For example, Ryanair Spirit airlines and other ultra low cost airlines are successful because they are very clear on their value prop and deliver on it. CX is providing a consistent experience that customers want. Low price players know their only ‘stickiness’ is price so it is a tough game requiring scale and constantly reducing operational waste. Walmart has been playing this game (successfully) for years…and now are confronted by someone who can compete on price AND deliver a great experience (i.e., Amazon) If you can deliver a 4 Seasons experience at Spirit Airlines costs and still make a profit you will quickly win the day….

  14. Is the fact that Valdimir Putin received an majority of the votes cast when he ran for president a success story for democracy in Russia? RyanAir is a successful “price” story like K-Mart was in its heyday. I know an upscale restaurant that has a very long wait and very arrogant service, but their food is to die for. It is a success story because customers rave about it. It clearly is not an “experience” success story, it is a “product” success story?

    The “X” in CX is only one feature in how customers define value. That means the intersection between “customer” and “success” can be due to components other than their experiences, just like they are at Chez Snob and RyanAir.

  15. Great discussion, but I hate having to think on a Saturday afternoon.

    A lot of this discussion seems to be excluding price from the experience a customer has. So, when my neighbor tells me that he likes to shop at a certain store because he ‘always gets a great deal,’ has price not contributed to his experience?

    The one thing that I think this is highlighting is that CX alone does not create true loyalty.

  16. Chip:
    I want to emphaise what you said:
    The “X” in CX is only one feature in how customers define value. That means the intersection between “customer” and “success” can be due to components other than their experiences, just like they are at Chez Snob and RyanAir.
    This is the essence of what we need to learn from the Ryanair case.
    Thanks

  17. Wow–terrific discussion! From a neuroscience perspective, I would add that Anthony, Dave and others are exactly right regarding expectations and value perceptions. The brain is hardwired to evaluate rewards in comparison to expectations–it’s the mechanism for reinforcement learning. Expectations are individual and subjective, just like rewards, so we would expect people find value in things that make others cringe. Variation makes a rich market tapestry in which buyers and sellers can always find each other, no matter how we may judge their perception of value. I’m continually surprised by truck nuts. Really?? Truck nuts?? To each their own!

  18. To answer Bob’s initial question – No. A company who does not compete on or actively work to improve customer experience and, yet, is a success by financial measures, is not a CX success.

    And I agree with Olga that this may only be a short-term business success because they have not included CX in their strategy. Other businesses can choose to match low pricing structures and implement quickly. However, CX cannot be easily copied. It’s commitment and day to day practice – all rolled up into brand and culture. It takes time and energy. Companies that invest in CX and are true CX successes are raising the bar to competition.

    So, is a business strategy that does not include high customer satisfaction and loyalty viable? Probably. But not for long.

  19. Haven’t been on Ryanair.
    I wouldn’t call it a CX success story – the best I can say is that they appear honest about what you will get from them as a ‘customer’.
    I would call it a business success story – for now.
    And if I want to fly from point A to point B, at a low price, accepting a high level of ‘nastiness’ in the experience, then I’m voting with my feet (This goes either way, right).

    Our company’s CX methodology specifies different, heightened micro-moments in the customer experience. This means breaking down the CXJ into pieces that amplify what a customer deems most important at that moment. When booking on, to fly Ryanair, what is amplified is the customer’s need to move between 2 points, and to pay a dirt cheap price.

  20. I think, Eldon, you have decided CX is be all and end all. But RyanAir shows otherwise. Matt Ward states in article on Uber:
    Drivers and riders have NO LOYALTY. The reason I use Uber or Lyft or any one of a dozen services is a result of price, availability, and marketing. A better offer from ANY competitor and I’m gone.
    What is a better offer? It is not just price but also benefits like less waiting, convenience etc.
    The better offer is creating Value

  21. I would say they are a business success – for now – but not a CX success. They have successfully segmented the market and effectively targeting their segment. But they are willfully ignoring CX to compete on price. And that strategy can be successful, at least until a competitor can offer a better experience at equivalent price, or unless you have achieved scale that helps you win. Someone mentioned WalMart. They win on price and now have significant scale and cost advantage as a result to continue winning. But they are also not a CX success story.

  22. Great post Bob. You’ve hit a chord and I appreciate the insights from Shaun, Chip, Nancy, Dave, Michael and the rest of the commenters.

    Dave Rendall and I featured RyanAir and how they antagonize and embrace unpopularity in Pink Goldfish to differentiate. Here’s an excerpt:

    RyanAir flew for the first time in Ireland in 1984. Since then they have grown into Europe’s biggest carrier. The company has always prided itself on cheap no-frills flights. However, it fundamentally fails to deliver a positive flying experience for consumers, and its customer service is famed for its bad attitude.
    RyanAir routinely tops the consumer surveys for the least popular airline, an honor it received again in 2017. CEO Michael O’Leary is renowned for his controversial comments, such as, “We don’t want to hear your sob stories.” or “What part of ‘no refund’ don’t you understand?” According to Forbes, likeability isn’t integral to his leadership style.
    Does RyanAir make excuses for the poor level of service? Absolutely not. They flaunt it. In 2013, the brand launched its very own “I Hate Ryanair” website.
    Here are just a few of the things customers complain about:
    – a 70 euro charge to print a boarding pass at the airport
    – reducing the number of airplane bathrooms
    – no seat back pockets
    – no water served on flights
    – a six euro charge to pay with a credit card
    – no air sickness bags
    – inconvenient airport locations
    – a clunky website
    Instead of trying to resolve these complaints, RyanAir uses their negative reputation to threaten further reductions in service. These empty threats generate additional free publicity. Here are a few examples of changes they announced, but had no intention of actually implementing:
    – charging one euro charge to use the toilet
    – creating a standing-room only section
    – charging overweight passengers a fat tax
    – requiring passengers to carry checked luggage to the plane
    Even though they pledged to change their ways in 2014, they still ended 2017 as the lowest-rated airline in Europe. This was due to their handling of massive flight cancellations during the holiday season. They’ve also been ranked as the worst service of any company in Europe, not just the worst airline. In January 2018, they announced new size restrictions and charges for carry-on bags. Only one (very) small bag is allowed for free. Any additional bags will cost at least five euros.
    O’Leary was recently asked if he was concerned about the company’s negative image. He responded with this provocative statement. “Our booking engine is full of passengers who have sworn they will never fly with us again.” Flying RyanAir will save you money, but it will be painful. They know it and they flaunt it.

    I agree with the overall sentiment that Ryanair is a business success and not a CX success. But the experience they provide has become a differentiator. Perhaps my favorite quote comes from late Ted Levitt. He speaks about marketing, but I’d argue you can interchange it with (CX). “The search for meaningful distinction is central to the marketing (CX) effort. If marketing (CX) is about anything, it is about achieving customer-getting distinction by differentiating what you do and how you operate. All else is derivative of that and only that.” – Ted Levitt

  23. Eric,
    The best CX companies should have the highest market share.
    The poorest CX companies should have the lowest market share.
    Why is RyanAir succeeding. Is ti because CX does not relate to loyalty?

  24. I have written about Ryanair many times Bob – in my opinion, their success is down to ‘clarity of proposition’ – customers know exactly what to expect – if you willingly choose to travel with Ryanair, it is difficult to say that you are disappointed with the experience. Their challenge is to ensure that their proposition remains relevant. If they only differentiate based on price, if they remain the cheapest, they will continue to attract customers who only care about price. However, as they have learned in recent times, if competitors are able to match their only differentiator whilst offering a better experience, they will struggle to hold on to their market share. You can read my thoughts on them here – https://ijgolding.com/2015/09/02/ryanair-always-getting-better-has-the-worlds-largest-international-airline-really-changed/

  25. Ian:
    You write Ryanair has achieved this incredible feat by offering consumers what they want.
    Is that not good CX in that segment (meeting customers’ expectations)
    The CX must be good enough to enable people to re-buy and re-use

  26. A few thoughts on view shared:
    1. A better offer it to create value
    I partially agree only. Providing value is contextual, and I personally value different aspects of loyalty at different points in time. On top of that, I value the experience that I receive while consuming the product / value. My view would be that these are interrelated constructs.
    2. Best company relates to market share.
    I would need to be convinced of this. I buy into may brands that are not mainstream, or market leaders. The reason why I buy is what I believe about the brand, or how I believe it makes me feel. As an example, there are companies that have biggest market share in their industry, but their products give you lung cancer, or diabetes.

    Summary: The various disciplines & management constructs have their place in the business ecosystem. Each needs the relative amount of focus.

  27. Ok, so some say that Ryanair is a “business success story” but not a “CX success story.” Obviously a lot of passengers must be loyal to Ryanair or they wouldn’t keep traveling with the low-cost airline.

    I’m still a little confused about a couple of things.

    Ryanair does a masterful job of marketing its low fares. And, it makes it painfully clear that you won’t get much in the way of customer service. That should set a low expectation for service.

    And yet, Ryanair satisfaction ratings are still low. How can that be? Ryanair has delivered on its brand promise, and yet customers still are dissatisfied.

    What many of you (not all) are saying is that low prices are fine when customers are highly satisfied (think Southwest or Amazon) provided it’s not coupled with bad service (Ryanair, Walmart).

    If CX includes any perception (including price), then why shouldn’t Ryanair and Walmart be considered CX success stories?

    Is it as simple as this: CX success requires a focus on great customer service? If not, then please provide an example of a CX success that doesn’t include great service.

  28. There may be another explanation. Do Ryanair customers do business with them because they want to or because they have to? We may be getting hung up on the difference between what loyalty researchers call affective vs. calculative commitment. In the former, people patronize a business because they’ve had a rewarding experience. In the latter, they have no other choice. For example, I have calculative commitment to my local power utility–their CX is terrible, but my only other option is to live “off the grid.” Viewed from the outside, my behavior is the same (I’m 100% loyal to the power company) but the context is entirely different. The power company is a business success (it’s a monopoly) but it’s a total failure from a CX perspective. How many of Ryanair customers have no other choice? Perhaps due to economics and available routes, it’s a substantial number.

  29. Are Ryanair’s experiences always poor?
    I asked myself this and then looked at some data…..
    If you go on tripadvisor you will see that of all the 15k+ reviews on Ryanair
    51% of them rate it excellent or very good and 27% say it was poor or terrible.
    Go to Airline Quality and you see a very similar picture
    Ryanair aren’t always the cheapest either by the way.

    In 2017 Southwest Airlines 20% of flights were late.. in 2017, 12% of Ryanairs flights were late.
    https://cronkitenews.azpbs.org/2018/04/09/plane-truth-airline-quality-at-highest-level-in-decades-report-says/
    https://corporate.ryanair.com/about-us/punctuality/

    Apple has probably been sued by more former customers than any other company in history, are they more or less of a CX success story and why would that be?

  30. Great post, Bob. A few points:

    – Customers are illogical, irrational and unemotional. My one dreadful flight on this airline will never be willingly repeated, but I don’t want to judge the majority of customers who continue to fly with Ryanair. Ed talks about “truck nuts,” and there are literally millions of European consumers who are neither discerning about CX, nor do they care about anything other than price, (so long as they arrive at their destination safely.) I live and work in South Africa, a country which for decades allowed for no dissent, and where standards of service were never questioned. While I may personally never buy the disgustingly sweet sugar-water combinations called cold-drinks, nor buy the cheapest cuts of meat and offal, nor put up with horrible toilets at a football stadium, I have no right to judge my (poorer) fellow citizens for their cheap as chips choices. It is for business leaders to decide where their pricing levels will be for the experiences they wish to offer. Listen to your customers, and they will tell you. Just because you and I may have higher expectations does not mean that everyone else also has these.

    – I think that we also need to look at what they awful experiences at Ryanair mean to some of the passengers. While completely anecdotal rather than research-based, I have certainly been in many seminars and workshops where delegates want to share their, “Have-I-got-an-even-worse-story-to-top-yours!” stories. It makes us interesting and entertaining to other people, and people respond positively to stoke good feelings in the storyteller. It somehow connects us to other human beings that have also had these shocking experiences, and creates a community almost as powerful as the H.O.G.s, for example. Hence the success of the I-hate-Ryanair and similar websites. In one of the chapters of Colin Shaw’s book The Intuitive Customer, he also summarises how our brains are hard-wired for something more than just achieving “the job to be done.”

    – I think Gautam summarises this nicely: what is the perceived value that they seek? When I buy a T-shirt that I will wear once only at my kid’s school fete, I’m not looking for Versace or Polo. It doesn’t matter if it falls apart after the first wash. For many Ryanair passengers, the exciting prospect of being able to afford to go home to see their loved ones for Christmas after a year of working in the UK is far more important than a crappy experience on an airline that gets them there.

    – Finally, in this world of “fake news” and manipulative, cynical, cheating, lying and even thieving leaders in the world of politics, business, sports, (like Australian cricket cheats, Gautam,) educational and even religious institutions, maybe Ryanair and O Leary are a refreshing whiff of some straight talk and honesty. After all, isn’t that why so many Americans voted for Trump?

    In spite of all these things, I still agree with Olga and others that it is all okay in the short term, and in times like these. I agree that this behaviour doesn’t create true loyalty. And, yes, as the old Chinese curse allegedly states, we live in interesting times.

  31. Hi Bob: Gartner’s definition of CEM has fueled the confusion about the efficacy of RyanAir’s customer strategy. To net it out, I disagree with Gartner’s CEM definition, “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”

    Had Gartner placed a period after the word interactions, and omitted everything to follow, the definition would be sensible. What I object to are the logical leaps Gartner makes by assigning purposes for CEM. Purposes like ‘meet or exceed customer expectations,’ and then attributing outcomes to that, like ‘increase satisfaction, advocacy, and loyalty.’ That’s a lot of Kool-Aid to drink. There are many reasons to manage customer experiences, and many possible desirable results. Is it reasonable to expect or plan for customer advocacy for bladder care products or addiction treatment services? We have to think of the range of products and services, and understand that for marketers, the goals of managing customer experiences will be just as diverse. And maybe there are other outcomes just as compelling as ‘loyalty’, ‘advocacy’, and ‘satisfaction.’

    I like Ed’s comparison to RyanAir as a utility. I trust that people use the New York City subway system not for the olfactory or visual experience, but because they have to get somewhere cheap, and they have little choice, given the cost and the fact that their reasons for travel often are not discretionary. I think if you boil down RyanAir’s business purpose to its essence, it’s moving humans long distances at the lowest cost possible. I can’t judge RyanAir for not building in more CEM stuff, like “brand promise.” If their strategy works for them, and their customers keep returning – for whatever reason – they’re onto something. Clearly, for an airline, dominating the low-cost provider niche is damn hard for others to copy. I can understand why RyanAir wants to hold onto their hegemony in that slice of the market.

  32. Really enjoying this discussion!

    Bob, perhaps your last question is best answered with a question. What is the definition of CX? Is it really a universal equation? (okay, that was two questions – sorry…)

    In our company, we look at four things when auditing CX: Processes, Policies, Practices and People (People being the Customer Service aspect). Each are weighted differently in importance depending on a company’s value proposition and the expectations of the target group.

    It is similar to the debate about ‘Frictionless experience,’ where detractors point to Ikea as a counterpoint. Effort is important to Ikea, because their model is based on customer discovery. For them, a frictionless processes doesn’t work. But it DOES work for an e-commerce model

    Examples of CX success without customer service? ATMs, Airport self-check-in, tap credit cards… there are thousands of them!

    Keep asking the great questions!

  33. Just for consideration here. It feels to me as if there are certain sectors where customers have such a low expectation of customer service and high distrust of most of the brands operating that disloyalty is being banked all the time. Airlines and banks would be 2 examples of these sectors.
    The primary tactic used in these sectors to create brand loyalty is distraction; flyer miles or investing in school education to show I’m really nice.
    In these sectors disruption can be built through low cost offers, a real point of difference where I see little else, I’d argue in these sectors the customer experience is individual and employee dependent not a delivery by the brand. Alternatively the brand could genuinely pursue positive customer experience, for example Southwest who manage it through combining a no frills we’re all in this together style.
    Where the sector has banked pent up dislike a disruptor even with poor CX can succeed by having a clear price benefit.

  34. Thanks, Aki:
    I agree with you.
    Bob, this example is very clear: CX and Customer Satisfaction do not relate to business results. That CSat does not relate to business results is well documented.
    Second, differential or relative CX can. But CX is no more than experience, which is always good for businesses to offer, but it does not replace value which is why, as Aki said, people buy or re-purchase.
    As experts, we should examine all of these

  35. Gautam – absolutely – their clarity of proposition has historically meant that they have consistently met customer expectation – that in itself is an example of an organisation being able to deliver an intentional experience. This can be defined as ‘good CX’ for those who ‘buy in’ to the proposition. Those who do not think their proposition is acceptable have the choice not to use their services. If more organisations were as clear about their proposition, they too would be able to deliver a consistent, intentional experience.

  36. Ian, if Ryanair is meeting customer expectations, they should have high satisfaction/experience ratings. That they do not have.
    We are trying to fit CX into Ryanair, instead of examining whether CX works in their case, and why not

  37. That leads to a whole different conversation Gautam – as to the suitability of VOC metrics – just because an experience meets expectations, does not necessarily mean that a customer has to ‘like’ it. In my opinion, this is the difference between ‘needs’ and ‘wants’ – what customers of Ryanair ‘need’ is the lowest cost flight option possible – what they ‘want’ in an ideal world is to be treated as well as possible – in Ryanair’s case, the need outweighs the want.

  38. The current Ryanair success is its efficiency in costs. We must pay attention that Ryanair often choose secondary airports to play as a dominant, the goal: limited competition, better position to negotiate prices and maximize the number of passengers per flight. Yes they have frequent flyers but how many are hostages?No several options to choose…
    It is not a CX success, indeed they are trying to evolve the model considering todays world

  39. Ebenezer –

    There are many examples of CX success stories, and in many sectors – Singapore and Southwest Airlines, Wegmans Supermarkets, Ritz-Carlton Hotels, Nordstrom, Trader Joe’s, The Container Store, Ultimate Software, Zappos, Amazon, etc. All of these can be found online. Again, with Ryanair, you’re not looking at a CX success per se, but rather a situation where basic needs – money and safety – are sufficient emotional and value delivery elements for a proportion of the air-travel population.

    Michael Lowenstein

  40. This has been a great discussion. Thanks to all for participating!

    One thing that’s puzzling to me is why Ryanair’s satisfaction ratings are so low when they are upfront about pricing. One possibility is that low price is not the same as a “good value.” Some passengers complain of being surprised by various fees, although Ryanair appears to be improving in their transparency.

    Another theory: finding out that landing in secondary airports means paying more for ground transportation. So the price of the airline ticket is low, but the complete journey may not be.

    And I wonder if reducing service below industry norms is another reason. Expectations are set not just by the company’s marketing, but also what others offer. Passengers who think peanuts are just part of the deal may rate service poorly even when the company says: “Hey, no peanuts are included.”

    Looking through all the comments, I didn’t find anyone saying that Ryanair was a “CX success story.” Many said it was a “business success story” because it shows you can focus on price and grow when a) there are enough people that value that above all else and b) competitors don’t appear that match the low price with better service.

    So, my conclusion is that while price is part of the customer experience, if price is the only thing driving business success then it’s not considered a CX success. Something *else* must also be present. What is it?

    I would be interested in seeing some other examples of CX success stories, in addition to the ones that Michael presented.

  41. Here’s a thought on the something *else*, Bob. Speaking in terms of how the brain works, humans actually use six factors to determine value (see http://se-partners.com/what-is-value/), so it’s more complicated than benefits minus cost. Quality, however, is distinctly different than value. It has to do with rewards compared with expectations, and the brain computes it using different circuits. If rewards consistently meet or exceed expectations (as is the case in a good CX), then the brain forms long-term, positive associations. This learned preference, or brand attachment, is the source of affective commitment, the type of loyalty we all pursue with better CX. Preference, however, is only one of the six factors in the evaluation, and individuals will weigh each of these differently. According to Maslow’s theory, meeting practical needs trumps meeting aspirational needs, but if five value factors are roughly equal (context, rewards, costs, risk, time) then the sixth, personal preference, always wins the day. Successful CX therefore biases value-based decisions but doesn’t uniquely explain them.

  42. Bob –

    Seemingly forever, we’ve been having dialogue about a) the inconsistent connection between satisfaction scores and actual customer behavior and b) the fact that marketers and researchers have been trying to identify stable and predictable links between what consumers say (often through satisfaction studies) about product and service experiences, what they mean, i.e. the emotional and unconscious underpinnings about what they really think and believe, and what they do in terms of actual decision-making and actions in the marketplace. I wrote a post about this a couple of years ago: https://beyondphilosophy.com/consumers-say-vs-mean-vs-toward-understanding-emotional-subconscious-drivers-behavior/

    Another well-known CX success story is Disney. My colleague Colin Shaw often points out that, though Disney theme park vacationers and visitors often say (again, in satisfaction studies) that they want salads and other healthy foods for themselves and their families, what they really want, and buy, are hot dogs and hamburgers. If Disney only followed what customers said, they’d focus on salad; and this would diminish the overall park experience, potentially leading to churn.

    So, one possible explanation of Ryanair’s business results is that their customers may say, through their low satisfaction ratings, that they are unhappy with the overall experience; but, what a percentage of them really mean and do is that they will put up with the other poorly delivered components of value, such as mainstream airports, courtesy and service, for the low price and safety they receive.

    Michael

  43. Michael, you make a great point. I had a chat with Colin recently about just this issue — what people say they want doesn’t match what they really value, which influences behavior. Behavior is what drives business, not survey responses.

    If Southwest gave people want they want — assigned seats — it would undermine their quick turn, low cost model. They figured out, just like Ryanair, that while people might gripe about certain aspects of the experience, the core value was an affordable flight.

    In the case of Ryanair, it seems clear that despite low customer satisfaction scores, the airline is also appealing to what customers want most — a low price.

    What’s different? Southwest adds friendly service.

    What’s fascinating is that Southwest is considered a CX success, and Ryanair is not. Both feature low fares (Ryanair copied Southwest’s model) and give people what they want, business is successful. Why does it matter if customer satisfaction is low, since it appears to not matter at all?

    There seems to be a “feel good” bias in the CX industry. Customers must be happy for a company to be considered a “CX success.” If you disagree, please share an example of a CX success that has low customer satisfaction.

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