RyanAir: What happens when you just don’t care…

Michael O’Leary announced a couple of weeks back that he wanted to turn around the ‘abruptness of RyanAir’s culture‘.

So those of you who have heard me speak over the last few years will know that I use RyanAir as a great example of Customer Experience Management done well. Whilst this was initially shocking to many (a few years ago) most people have more recently cottoned on to why and audiences are now beginning to quote RyanAir back to me when I’m looking for examples of CX management.

However the vote as to whether people would invest in them has always been split into two camps.

  1. Just look at their results – they are a successful business, they are profitable and you said it yourself Martin – they have managed their CX very well – we know what to expect when we travel with them and there is a market for their product. So yes I’ll invest – I think they will continue to provide a good return
  2. They treat people like [insert your preferred strong words] – of course I wouldn’t give them my money

Personally I believe it really is as simple as Camp Two ultimately being the right answer however the problem is that Camp One were also ‘right’ – at least on the face of it.  From a short term investment point of view it was easy to see why money should be put into RyanAir.  The reason I believe Camp One have some faulty thinking is explained in my blog post earlier this year on where the money really comes from and why that model is not sustainable in the long-run.

RyanAir have issued a profit warning and are receiving a lot of bad press for their poor customer service.   I believe that this is the beginning of the end for RyanAir being a business that makes a profit out of consistently managing their ‘below benchmark’ CX.  Their business model is cracking (rising fuel prices, regulatory challenges to their revenues and competitive pressure on price) and their customers have no reason to stay other than for price.  We’re not going to see them go bankrupt anytime soon but I think that we will enter an era of discussion of RyanAir as a struggling airline in the face of tougher competition on both price AND service.  It is the latter that RyanAir just has no idea how to respond to.

It’s interesting to watch this unfold because it is, for once, shareholder pressure that is forcing Michael O’Leary to address his poor customer experience and also because I believe that despite his declarations he still doesn’t get it.

O’Leary has said that he wants to stop ‘pissing customers off’ and that this also shouldn’t cost any money.  From anyone else I’d take that as a simple statement of good practice.   From him I can’t help but feel that if it HAD cost any money he wouldn’t have bothered.  I simply don’t believe he cares.

Fundamentally he has a company built on his own personal set of values which show no regard for his customers or employees.  Changing that culture and turning around RyanAir, is going to require that he leaves or has some kind of personal revelation.

Now this HAS happened before with smaller companies but typically with the big ones the CEO moves on and a new culture comes in.  If you want to hear about what a big difference culture CAN make I’d encourage you to watch the video testimonial from Roma Mouldings who attended a 3-Day bootcamp with Zappos Insights – who know a thing or two about Culture’s impact on performance!

Mobile Wallets, Identity Security and Banking Digital Maturity

My iPhone is the least valuable thing I carry. I like it that way – William Lovegrove on e-Consultancy

… having been through this recently myself I would concur… my iphone5 had a security flaw in it that meant it could be unlocked, you hardly ever recover a stolen iphone because once the sim is out it’s untrackable and the identity theft risk is very tangible in a society that is ‘risk-innocent’ and not protecting itself appropriately. 

It’s a race between a ‘few’ people who are looking at device security and a tipping point of security issues that wake people up to the risks…  that tipping point will get closer once banks implement mobile wallets – the device will be a much bigger target.
I’ve been involved with or around a few Mobile Banking strategies for UK banks over the last few years.  Banks are very keen to get in on the mobile wallet space and get ahead of Google, PayPal, Apple etc.  However banks are not traditionally innovators, certainly in technology.  They have been slow to wake up to the realisation that MOST companies now are enabled by technology (even in somecase have become primarily technology companies).  No one was really discussing the issues highlighted in this article (some did but were cut down because ‘we have to be in on this’)
My experience is that the Banks, whilst rushing to develop cool mobile strategies that ‘position’ them for innovation and marketshare, are absolutely not going far enough in considering the wider impacts of this technology.  Many have a good intent with making things easier for customers and increasing customer engagement.   However if you are involved in enabling a technology to become so intrinsically more intimate (yes finances are intimate) and thereby also making us a target for crime without considering how to mitigate this then you are not really making it better for us.
Here’s what I need (with this particular subject lense on)
  1. Give me somewhere safe to put my money
  2. Make it easy for me to access (unless I want to lock it away in exchange for some upside)
Very much in that order!
Fraud departments of Banks need to be ahead of the game here (a lot are using old standards for new channels), technology groups need to be on top of the latest thinking/developments (a lot are outsourcing the development of mobile channels to 3rd parties).
If Banks are going to be truly serious about being involved in mobile payments and wallets there needs to be a step change in how they go about being drivers of technology and innovation – across all operations in the bank.
After my phone loss – I’ve locked my new phone down now, changed all my passwords to a very secure system, backed everything up, removed financial information from the phone, set findmyiphone to track (to no avail), downloaded hiddenapp for future protection, reviewed my mobile phone insurance – that’s all easy enough right?
I mean – EVERYONE does that right?

Shaking up the UK Banking Sector – I’m cautiously optimistic

So Virgin Money are having a showcase week following their acquisition of the ‘good’ Northern Rock.

I am personally very excited about

a) Virgin Money’s ‘full’ entrance to the market
b) The next 5 years of the UK Banking sector

Virgin have been hankering after the opportunity to transform this industry for a long time now and they stand a very good chance of being able to do so… but they are not the only change shifters around and they are not ‘automatically’ going to be THE people to change the industry necessarily!

What IS wrong with UK Banking?
When bankers or those in the industry survey customers about their opinions about banking we get answers back about interest rates, charges and fat-cats.

What we don’t get is what are people trying to do with their money (that means they want better interest rates), how are people managing their money (such that they incur charges) and what do people understand about the banking industry such that they perceive ‘Fat Cats’ as being unfairly paid…

The banking industry is just generally not used to being customer-centred in it’s thinking. It has never had to be.

Well that is certainly changing now. Rightly or wrongly the banking crisis has made us all say “Enough is enough… something has to change” and there are now new entrants to the industry who are clamouring to offer us alternatives in an industry numbed by sameness.

When I look at the new entrants the ones that excite me are the ones that I know are thinking about us as human beings (and yes consumers), our lives and what we want to achieve ‘through’ banking – as opposed to those who are just thinking ‘what is a better banking product’ or ‘what does mobile banking mean for a customer’.

The lens of change has to be wider than this.

My pick of ones to watch… and why some obvious names don’t make the list

  • [my out on a limb prediction] – Royal Bank of Scotland
  • [the favourite but with caveats] – Virgin Money
  • [The Industry Usurpers] – Apple/Amazon/Paypal
  • [The Surprising Innovator] – Standard Chartered
  • [The disrupter] – Yodlee

Who didn’t make the list

  • Aggregators/Online ‘layers’ – Bank Simple/Moneydashboard/Mint
  • The incumbants – The other high-street banks

So why is the perpetrator (as defined by the red-tops) top of my list?  Not just because the only way is up ;-) but because

  1. The new starts are struggling with actually implementing the technology behind a bank.  Don’t expect current accounts or mortgages from Tesco Bank anytime soon the FSA is far too busy scrutinising them on why they couldn’t robustly deliver Savings and Credit Cards [their core business]Virgin Money remain on the list because they have at least acquired a fully working bank but they may still have serious integration challenges (based on the same technology Tesco Bank is struggling with)
  2. The incumbants have already got a fully working bank system, are experienced at delivering change into it and rolling that out to their staff.Their challenge is a cultural and organisational one – their key change they need to make is to decide to be more customer centred and do everything they already know how to do – but with THAT focus.  They COULD move very quickly and deliver to their already hefty market share a great experience.

The disruptors may well be the ones that kick one or two of the incumbants into action (the jungle drums of customer experience suggest this is happening within at least three major UK retail banks)

There are so many ways to cut your predictions – and I may well change my mind in a years time – there is one thing that for me remains absolute though.  The winner will be one who works out what it really means to be customer-led from the inside-out, who can demonstrate a genuine sense of connection and understanding with their customers.

Can Payroll be linked to Increased Sales?

I was recently in our local B&Q DIY store and followed a classic strategy of mine to solve our “sanding and varnishing” challenge.

  • Research the product online
  • Check product availability
  • Check store location and opening times
  • Go to store to get more information and purchase

This store certainly had a large range of products in the section we needed, some were fully in stock and some weren’t however it wasn’t until I was able to talk to a very knowledgeable employee that I was able to be confident that what I needed…

  1. existed and
  2. was in stock in this store and could therefore
  3. make a purchase.

We had, to be fair, been in another store earlier and not found what we needed… but in that store there was no-one knowledgeable to help us. We left confident that there was no stock of what we wanted to purchase… and went to another store (fortunately for B&Q another of theirs…)

So I was interested to stumble upon a Wharton Business School article which links the satisfaction of customer experience especially around stock availability and making purchases with… yes you guessed it… knowledgeable staff.

In short, customers get lower satisfaction from their shopping experience when stores have too few employees and, more importantly, when stores lack employees who are knowledgeable about what’s in the store.

Further more the study actually links increases and reallocations of payroll (around staff availability and knowledgeable staff) to increase in sales via increased customer experience scores. At times they were able to show an $1 increase on a staff member to a $4-$28 increase in sales!!!

So before you jump straight to your supply chain technology, or customer relationship database to see where you can eak out a better bang for your buck, may be this week have a look at where you are investing in some of your most valuable assets and see how you can better leverage your staff to deliver a consistent, excellent customer experience…

I would be willing to bet that the store we finally purchased from, whilst bigger, was not more successful because of size of stock availability but actually because of the range of knowledgeable staff it was able to support in guiding customers through their in-store experience.

The full report is available on Knowledge@Wharton (free to register) which is an excellent resource for all Business related research including the many ways in which customer experience is becoming more and more integrated into boardroom level decision making strategies.