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 Feature
22 May 2009 | Paul Gostick Blog
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Customer Service the Ryanair Way
This week Paul looks at customer service and why it is important and far cheaper keeping existing customers happy than trying to acquire new ones..

I have long advocated that customers’ needs should be at the heart of any successful business and commented that all profit comes from the customer. Put the customer first is thus the mantra of many businesses. Yet the average company still loses 10% to 15% of customers each year. Most of them leave due to poor service or a disappointing product experience, yet only 4% of them will tell you about it. They do however tell other people about their bad experiences. Once they've left, it's difficult and often expensive to get them back. It is far cheaper to keep existing customers than to acquire new ones.

Over the last few years one company in particular seems to have gone out of its way to take a different approach – pretty much alienating customers at every turn. A few years ago they were OK to fly with as their fares were relatively cheap and service was reasonable. But, nowadays, they treat their passengers with utter contempt and seem to take the view that they are an annoying but necessary inconvenience.

Ryanair certainly seems to take the view that all publicity is good publicity. Over the last year they have made a string of announcements that have captured the headlines and even made front page news. Chief Executive Michael O'Leary’s epistles have certainly given us much to think about. His claims are often baffling and seem to defy common sense, frequently inflammatory but sometimes just plain amusing. For example, he might introduce charges to use aircraft toilets and a ‘fat tax’ for overweight passengers. Received wisdom suggests that such actions are seen to be carefully choreographed exercises designed to fan the flames of free publicity.

Ryanair regularly imposes hard-to-avoid fees on their customers, which now make them less than a budget deal. The latest wheeze is unbelievable. They are introducing another raft of additional charges with customers having to pay a £10 surcharge when booking a return flight as the budget airline moves to abolish traditional check-in desks at 146 airports by 1 October 2009.

The move means passengers buying flights online will no longer benefit from the free booking service. From today, May 20, anyone booking a seat online will be required to print their own boarding pass and will pay a £5 surcharge for each flight, bringing the excess on a return flight to £10 for the ‘privilege’ of using our own printers and paper. I thought the payment card charge was bad but this is priceless. And, just to ice the cake, customers who forget to bring their boarding card with them will have to fork out for a £40 'boarding card re-issue fee' on arrival at their designated airport - in other words a fine. The new policy replaces the previous practice of offering free online ticketing and charging £10 for anyone who opted for face-to-face check-in.

Restrictions on Ryanair's on-line ticketing system mean that many customers will be unable to print out their boarding passes at the time of booking, increasing the chances of penalty charges from customers who think they have completed the process. In fact, Ryanair says its computer system does not allow customers booking more than 15 days before their flight, or within four hours of scheduled departure, to check in at that time.

You have to admire the audacity of Michael O’Leary who doesn’t really give a damn whether you like it or not. O’Leary knows that when it comes to the crunch there is a good chance that you will still turn to him for a cheap weekend escape. Perhaps this is the new era of customer service in the credit crunch – expect nothing! Certainly the concept of value is conspicuous by its absence. But, that said, are the fares really that cheap and does the model work? The Times recently compared Ryanair to British Airways and the findings made interesting reading. Once all the unavoidable costs were taken into account there was little difference in overall fares between Ryanair and British Airways.

The Times quoted a two-week trip for a family of four to Malaga, Spain travelling on Saturday with three bags and a set of golfclubs in the hold to illustrate their point. On British Airways (from Gatwick) the flights would cost £1,166 paying with a debit card or £1,171 with credit card. Ryanair (from Stansted) would cost £1,265 paying with either a debit or credit card.

However, if you don’t use the Ryanair website to prebook your luggage then the costs escalate still further. In fact the Ryanair flight to Malaga without prebooked luggage and check-in would cost over £400 more than the same journey with British Airways.

A second example quoted a weekend break for two adults travelling to Rome on Friday evening, returning Monday evening with one bag in the hold. On British Airways (Gatwick to Rome Fiumicino) the flights would cost £251 with a debit card or £256 with credit card. Ryanair (Stansted to Rome Ciampino) would cost £244 with either a debit or credit card.

It costs only £7 more to fly with British Airways if you choose to pay for your flight with a debit card - about the cost of a couple of bottles of water on one of the budget airlines - which would be complimentary on British Airways, as would the food and drinks. It is also worth noting that Ryanair flies from Stansted and into Ciampino, a small military airport with relatively few facilities for tourists, rather than Rome’s main international airport, Fiumicino.

So, here are few things to consider before committing to those 1p headline grabbing Ryanair flights.

1. 1p flights are never actually 1p - this is misleading advertising due to the unavoidable charges. The flight may be 1p but the charges for paying for it dwarf the price at £4.75 for each passenger, each way.

2. Check-in charges. If you want to book a bag into the aircraft hold you must check in at the airport, which will cost you £4.75 per passenger, each way, if you book online. If you pay at the airport or over the phone, £20 per passenger, each way from 20 May. But watch out if you travel as a party. It doesn’t matter if only one person in your party needs to check a bag as hold luggage, everyone else has to pay to check in at the airport too.

3. Ryanair set its weight limit for hold luggage at a miserly 15kg and does not allow pooling of bags so, even if you have a party of three sharing luggage, if an individual bag weighs over 15kg you will be charged £14 per additional kilo. The baggage charge is £9.50 per bag, per flight. Doubled to £19 if you book at the airport or over the phone. Additional baggage charges apply if you check in more than one bag per person. It will cost you another £19 per extra piece of luggage, each way.

I could continue at length but suffice it to say that many more of the service features are less than customer friendly. There are enormous queues at the surcharge payments desk. There is no choice but to book a Ryanair flight through its website, which is awful, making the whole experience as stressful as possible. The premium rate internet helpline costs £1 per minute to speak to someone in a call centre. Cheap fares are only available on a Tuesday, Wednesday or Thursday. You can’t book a specific seat and you have to travel at obscene hours to destination airports in the middle of nowhere. Refunds? – You must be joking and, if you do travel, poor compensation for their screw-ups. Guess who was named by UK’s Air Transport Users Council as the worst airline for compensation if your bag goes missing or is damaged?

So my advice is fly with a carrier like British Airways, it probably won’t cost you any more when everything is taken into account. And, on the off-chance that it does, it won’t be much and you are safe in the knowledge that they do value their customers and have the backup to deliver the service. Personally, I'd rather fly with other scheduled airlines, pay a bit more, and feel that I am actually getting something for my money and be treated like a person instead of self loading cargo.

Ryanair seems to be more interested in its customers’ money than their needs. They must have taken a lead from Gordon’s school of hidden taxes and charges! Now, remind me, why did you want that cheap flight?

Any feedback and comments are always welcome!! 

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27th May2009

Hi Paul

Bingo! I could not agree more. Any work to keep an existing customer happy is very much necessary. It is cheaper and more valuable to make that client happy again. They will engage additional services and possibly become a customer for life. The one problem I have experienced is frustrated staff can sometimes migrate away from difficult cleints and move toward newer more interesting clients. I would recommend changing the team around trying to match personalities as relationships are critical in keeping clients happy. The next question is when is it appropriate to drop a client?

Randy Linden

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