When Ryanair announced its profits increased by over a third in the past year, chief exec Michael O’Leary attributed the success to a new and improved approach to customer experience. Jen Faull reports from The Joy of CX conference organised by The Drum, where marketing director Kenny Jacobs reveals the secrets behind the brand’s uplift in customer perception, and what the change of direction means for the airline.
To highlight how far Ryanair has come in the 10 short months since it embarked on its ‘Always Getting Better’ programme to improve the customer experience, you need only look back at some of the comments made by notorious chief executive Michael O’Leary.
“You’re not getting a refund, so fuck off.”
“We bombard you with as many in-flight announcements and trolleys as we can – anyone who looks like they’re sleeping, we wake them up to sell them things.”
“We think [passengers who forget to print their boarding passes] should pay £60 for being so stupid.”
“Short of committing murder, negative publicity sells more seats than positive publicity.”
For better or worse, that was the Ryanair strategy until November 2013, when the budget brand hit a low and was forced to issue a profit warning which sent shares plummeting 13 per cent. By the following January it had hired its first ever chief marketing officer in former Moneysupermarket and Tesco executive Kenny Jacobs.
Jacobs was not only tasked with bringing “new and fresh” ideas to the boardroom; he also replaced the sharp-tongued chief as the go-to spokesperson for the brand across Europe.
Just three months into his career at Ryanair he had packaged up and rolled out the ‘Always Getting Better’ programme in an effort to reset consumer perceptions and move it away from being the hostile brand people “loved to hate”.
And it has worked. This month, exactly a year after the profit warning of 2013, Ryanair announced that for the half year to the end of September, traffic grew four per cent to 51.3 million customers, profits were up 32 per cent to €795m, and total revenues increased nine per cent to €3.54bn.
Jacobs attributes the turnaround directly to the “improved customer experience”.
“We’ve said sorry. We said the service was a bit rough around the edges and we’ve started to make changes,” he tells the audience at The Joy of CX conference.
Cutting out bad experiences
Some of the first efforts at changing the brand perception went into getting rid of the defining experiences which Jacobs says customers hated, and Ryanair staff didn’t enjoy enforcing. Out was the costly and difficult process of making even the most minor edits to a booking, and in came a 24-hour grace period to allow customers to make changes.
There was a cut in the controversial baggage fees and a relaxation of hand luggage rules with a new two free carry-on bags policy. Meanwhile, to address customer grievances of either having to pay £10 per passenger to reserve a seat or face a lengthy queue at the boarding gate to ensure groups could sit together, the airline introduced allocated seating on all flights.
The overhauled website has been a cornerstone of the ‘Always Getting Better’ strategy.
“It’s going to transform our customers’ experience,” promised Jacobs at the time of its April launch. The previous site booking process meant at least 17 clicks were needed before paying for a flight, the majority of which were needed to reject offers of travel insurance and car hire. Now it takes just five.
The airline also launched a dedicated app – downloaded by 2.5 million customers to date – and mobile boarding passes in an effort to harness the increasing number of customers booking via mobile devices.
“We are relentless,” says Jacobs on the digital offering. “Every week something goes live – the job is never done on the website.”
The brand voice
Arguably, the most tangible change has been to Ryanair’s marketing strategy. It hired its first advertising agency, Dare, and has rolled out a series of campaigns highlighting the changes to customer experience as well as new services such as Business Class and Family Extra.
The move indicates greater consideration of tone of voice – something Jacobs explains is still evolving.
“We didn’t have a definitive tone of voice before. There’s always been an element of controversy and cheekiness about Ryanair with very good tactical and relevant communications, but nothing continuous. We’ve now established that.
“We also had a bit of a go at ourselves with good use of irony in our first campaign to show customers being genuinely surprised that we’ve changed.
“We are still establishing our tone of voice and it will be different, more grown up, but there will still be an element of cheeky Irishness. We will have a point of view and we’ll do that in a category where there is a lot of placebo and sameness.”
Toby Horry, managing director at Dare, explains that finding the right balance in the tone of voice was tricky as O’Leary “didn’t want to lose the spirit” of the brand.
“You forget that when Ryanair was set up it was revolutionary – it was the Robin Hood of airlines,” he explains. “Why should customers have to pay for all this extra stuff that they don’t really need? And of course there was an element of keeping that cheeky element as well. What we felt was really important was to make it clear we understood that in some aspects it had lost that Robin Hood spirit and had flipped over into what O’Leary had called ‘unnecessarily pissing people off’.”
Moving forward, data will drive the customer experience strategy at Ryanair. The myRyanair loyalty scheme launched in December 2013 and allows travellers to store travel information, documents and payment cards.
In time, the brand also hopes to offer personalised content and deals across the website and apps. It is ramping up its efforts with the creation of an innovations hub, Ryanair Labs, which it claims will help “reimagine the world of online travel”.
Jacobs explains: “A lot is changing in marketing; it’s becoming much closer to technology. So we’re breaking down that barrier and having marketeers and technologists working side by side on the digital platform.”
Jacobs also expects the teams to work on the development of in-flight content, Wi-Fi, and a trial with beacon technology.
Looking forward, thanks to these efforts to improve customer experience, Ryanair has raised its profit guidance for the rest of the year and expects to generate between €750m and €770m, ahead of the previous guidance of €650m. Traffic is expected to be up by 12 per cent in the third quarter and 20 per cent in Q4.
“In five years’ time, I would love people to be saying Ryanair has a relentless focus on improving the customer experience,” says Jacobs.
That’s quite a turnaround from telling them to fuck off.