Business practices that don’t prioritise customer service can reflect on a whole sector. Retailers should be wary of repeating Ryanair’s mistakes.
And it was all going so well for Ryanair. Having previously made a living from proving that you can’t be too cheap and nasty, they seemed to have finally decided that they might try this ‘being nicer to customers’ malarkey.
And the business had been responding (example headline: “Ryanair credits ‘being pleasant to customers’ for profits rise”). Only 18 months ago, Michael O’Leary attributed a 37% rise in pre-tax profits to that change in approach.
Who knew better customer service was good for business?
That came back down to earth with a bump last week, and its colourful chief executive came with it. O‘Leary was back to his more authentic role as a pantomime business villain, and the smilier customer service on the outside cracked open to reveal some less attractive truths within.
Just at a time when you need your own staff to support the business, Ryanair pilots have seen their opportunity to settle a few scores and threaten the management.
This is the challenge for brands that profess that they’re fine about being respected rather than liked. That’s all very well when the business is operating with brutal efficiency.
The problem comes when things go wrong – people are queuing up to give you a good kicking. Including your own people.
The ‘pilotgate’ fiasco could cost the airline £1bn in compensation.
The longer-term impact will depend on whether and how it manages the three golden rules of crisis management.
Number one: take responsibility for the problem. Number two: go way beyond what you have to do as a legal minimum – spend what it costs to do the right thing, and make a big thing out of making improvements that ensure nothing like it can happen again. And number three: communicate, communicate, communicate (ideally through the right mouth – which may not be that of the chief executive).
This is how the likes of Toyota, Tesco and Johnson & Johnson have recovered their positions.
“It’s truly depressing that politicians know that they will get many more votes from giving business a good kicking rather than by supporting it”
At the start of the recent crisis, Ryanair was doing pretty well on numbers one and three. O’Leary came out and admitted the problem with all due humility. But it failed dismally on number two.
Whatever the short and longer-term financial impacts, the broader effects of examples like Ryanair are more sinister and corrosive on a number of levels that are bad for all businesses, and indeed everyone who believes in the importance of free markets.
The catalogue of ‘nasty business’ examples like Volkswagen, Sports Direct, BHS, Uber and banker stories that keep on giving, have a cumulative effect.
Each of these stories are another round of ammunition for those who want to be seen to control business, to legislate and regulate in a way that reduces all our licences to operate and discourages enterprise and investment.
It’s truly depressing that politicians know that they will get many more votes from giving business a good kicking rather than by supporting it.
It’s particularly pernicious in the current political climate when we need the engine of business to be firing on all cylinders.
It’s good that organisations like the CBI, Chambers of Commerce and others speak on public platforms and try to defend and champion business. But when ‘Brand Business’ itself has a problem, so do the business representatives.
And that’s where the retail sector, and retail leaders come into it.
Retailers lead the field in terms of customer satisfaction and affinity; they have way more entrants in the top 50 of the most popular businesses than any other category. Retail is – both literally and emotionally – closest to customers and communities.
Retail is most able to take a leading position in giving business a good name, above and beyond individual businesses – to get into schools, colleges, media commentary and political events, talking about the importance of free markets and enterprise.
To argue the broader case and get public understanding and support. And to be the human faces of business on a constant and consistent level.