Ryanair, Europe’s hugely successful low-cost carrier certainly doesn’t spend a cent more that it has to, so the fact that it is two-and-a-half years into a major overhaul of its customer service offering is certainly noteworthy.
The reason behind its new business strategy – five years ago the words Ryanair and customer service were hardly ever mentioned in the same sentence – is that it has worked out that by improving the customer experience it can generate considerably more income with minimal investment.
The truth is simple: poor customer service, costs. There is the upfront cost of handling complaints, there is the hidden cost of premium-fare passengers avoiding the brand and there is the long-term cost of trying to recover a reputation.
During a recent BBC interview, the airline’s chief marketing officer, Kenny Jacobs, admitted: “We are a great example of one of those brands where we are better than anyone else at one thing — price. And then you do customer service in the right measure.
“It hasn’t cost us that much more to be better to our customers, and during the last three years the price differential between us and our nearest competitor has become even greater.”
There is another message from the Ryanair experience. Focus first on getting the basics right — developing a core, sustainable strategy which will attract increasing numbers of customers in the first place — and then you can fine-tune the customer service to the appropriate levels to improve the revenue streams even further.
Strong service and strong profits can be mutually reinforcing, but they have to be done in the right order: developing excellent service levels to support a unsustainable business plan is simply a waste of effort.
What it means for airports
For airports, as for airlines, there are clear financial benefits for improving the customer — and in this instance, we mean the passenger — experience.
Offering more choice, more service opportunities and a friendlier, more personalised travel experience widens the market to more mature, corporate and affluent customers.
And happy customers spend more and are more likely to return,
so there are retail benefits, too. Indeed, satisfied passengers are likely to spend 10% more time at the airport; twice as likely to shop; spend 7% more on retail; and spend 20% more on duty free.
Overall, ACI estimates that a 1% increase in passenger satisfaction levels delivers an increase of 1.5% in non-aeronautical revenue.
Airports that exceed their customers’ expectations have a competitive edge, especially in regions where passengers can select among multiple airports.
Two-thirds of Europeans live within two hours’ drive of at least two airports. In addition, improving non-aeronautical revenues makes the airport more resilient and better able to invest.
There are important less-tangible benefits, too. For example, working together with colleagues from different departments and other on-site airport businesses towards common goals to improve the customer experience makes the overall airport more efficient and a better place to work.
And as the airport is the gateway to a city, a region and a country, anything which makes the passenger’s passage through the airport a surprisingly enjoyable experience has wider economic implications.
But how do airports make passengers happy? And, equally important, how do they translate passenger happiness into an improved bottom line?
An airline has a simple, relatively direct relationship with the passenger, but for an airport improving the customer experience is far more complex.
Why? Well, for one, most airport organisations are designed around ‘silos’ for processes, not passengers. Also, airport managers are rarely incentivised to improve customer service, and third-party players —ground handlers, border control etc — who interact most with passengers, have zero incentive to improve their customer service.
It should also be remembered that customer dissatisfaction in airports usually results from many small, hard-to-improve things and not one big that’s easy to implement.
Many airports typically lack meaningful data about customers and their underlying needs; and what customer data exists is rarely shared or understood within the airport management team.
And finally, improvements in ‘ambiance’ or ‘experience’ are very difficult to justify from a return-on-investment perspective; and more shops and bigger terminals do not always equate to happier passengers.
So, for an airport that is serious about improving the customer experience and translating this into improved profits, a three-step process is required:
Get your house in order
The journey to transforming customer service levels starts with a
single step, but it involves a change of mindset – a shift from
focusing on airport processes to understanding and improving passenger experiences. It sounds simple, but it’s not.
Every airport CEO needs to ask a few basic, deceptively simple questions, such as:
- Does the airport have a clear strategy for the airport – where’s it going, what it stands for and why?
- Does the airport have a data-driven internal customer strategy with specific objectives for all senior managers? For example, a few years back Munich Airport set an ambitious goal of being Europe’s first five-star airport in the Skytrax survey and put in place a comprehensive management strategy to achieve this objective.
- Is there a clear sense of what the appropriate customer service levels should be for the airport’s passenger mix? Is it ‘cheap and cheerful’ or a five-star palace?
- Do airport managers have an incentive to put customer experience first and traditional silos second? To take an example outside the airport industry, 40% of all senior executive bonuses at Disney are typically driven by guest satisfaction.
- Would airport employees describe their experience working at the airport as positive? If not, it’s unlikely that passengers will have a positive experience either.
- Is customer service training a core element for all employees?
- And is good customer service rewarded? Airports in North America, such as Portland, have been innovative in introducing new customer-focused initiatives.
- Do stakeholders and partners (border control, security, shops/restaurants, ground handling companies) share the airport’s objectives? Are they incentivised to work together?
Unfortunately, in my opinion, too many airport CEOs still act as passive landlords or traffic police whose job is simply to collect the rent and enforce regulations, so not surprisingly customer experience doesn’t improve.
But if they act more as an orchestra conductor, at the centre of all airport activities focused on making something beautiful, things will get better.
The art of excellent airport management is to bring all the elements together, all the orchestral instruments, and to make them work together to the composer’s score.
The most notable orchestra conductors find something in the score which will surprise and delight an audience that has heard the piece a hundred times before. Similarly, the best airport CEOs know what their passengers will expect when they enter the terminal, but still find something, which will make travelling through their terminal a unique experience.
To take this first step, airports need data. Most airports have stacks of data but rarely share them between internal silos, so they are of limited use.
The trick is to convert data into useful market information about your customers and then begin exchanging data with the airlines, ground handlers, retailers, for instance, to build trust and create a shared approach to improve the overall customer experience to an agreed-upon level.
Get the basics right
For any airport serious about improving customer experience, it is important to focus on the basics, which sometimes can be the most difficult. These include:
- Fast, efficient check-in, security and border control
- Clean toilets
- Good, clear signage
- Reasonably comfortable places to sit
- A minimum level of courtesy
- Good Wi-Fi and connectivity — now a must!
But just one hitch in the process (whether it’s at check-in, security, signage or cleanliness of toilets) can damage a passenger’s perception of the entire airport and make him or her unwilling to spend time in the retail area.
It is vital for the airport to be present in moments of truth. Most passengers are surprisingly patient with delay and disruption once they understand that there are staff at hand who are sympathetic and competent, doing everything they can to help.
Even a routine problem such as a cancelled flight is an opportunity to show that the airport is truly customer-focused. It is important to realise that the experience of the passenger encompasses many aspects, seemingly small, but whose accumulation can create a difference.
A successful customer experience translates into a competitive advantage, while a bad experience harms the airport and spreads, sometimes even going viral.
One of the biggest challenges any airport faces involves service delivery, especially when most customer touchpoints are with ground handling, security and border control personnel. How can an airport get them on board with a shared vision?
Both London Gatwick and Copenhagen have been innovative in creating a vision for their airports and then encouraging airlines, ground handlers and other partners to share the same vision. They’ve recrafted their role with their airport partners from just being a landlord to a real partner, an orchestra conductor that helps them become more efficient and profitable.
Standout and delight
Know your passengers, master your basics, and only then, focus on delighting your customers in a distinct and memorable way.
Clean toilets and good signage are important, but customers will not love your airport because the loos are clean. Not only do the core airport processes have to be excellent and staff reasonably friendly but the overall airport has to have a positive, agreeable — and memorable — ambiance.
Delighting passengers requires making an emotional connection, showing that you really care and are doing something imaginative and memorable. The aim here is to have Facebook and Instagram covered in page after page of passenger selfies — relaxing in the airport pool, ‘chillaxing’ in the airport meditation centre, standing by amazing statues, orchestras and art galleries at the airport, along with accompanying text, which effectively markets the airport around the world.
Airports should be exciting places — the start of adventures and the first taste of a new country. Originality in design and thoughtfulness in providing unusual levels of comfort and tranquillity for passengers — artfully sponsored, of course — can create a buzz, which is part of a wider strategy of delight and surprise.
Passengers need to feel they are entering a world where their safety and security has been considered carefully by professionals – yet there is space for their children to be entertained and, if they want it, carefully crafted frivolity.
They can choose between rest, relaxation, entertainment and work. There is a quick route through the terminal if time is against them and places to relax in comfort if they have time to spare.
Competing airports need to be noticeably more passenger-friendly than their rivals. New infrastructure helps, but it’s also about good interior design and ensuring a consistent, pleasant visual experience.
Some of the world’s most successful airports bolster their success by creating delightful experiences that build upon the airport’s core identity and are memorable.
Some examples include beach volleyball and a Christmas market at Munich; the Butterfly garden at Singapore Changi; Rijksmusuem at Amsterdam Schiphol; and cultural processions at Seoul Incheon.
In an age of increasing airport competition and traveller expectations, the only choice for airports is to become more customer-focused.
For the CEO of a regional airport or a major global hub, it requires a new way of thinking, no longer just as a facility manager or traffic cop, but as a genuine leader at the core of the airport focused on improving customer experience to a level that’s appropriate for his or her airport, whether it’s low cost or first class.
It begins with transforming the airport internally, before mastering the core passenger processes and eventually surprising and delighting passengers to create value.
At the end of the day, happy customers are good for the airport’s bottom line — and the airport CEO’s career!