Share this content

Shaun Smith: Does Ryanair offer a branded customer experience?

4th Jan 2010
Share this content

With Ryanair in the headlines again, customer experience expert Shaun Smith takes a look at the controversial airline and its customer experience strategy.

I'm currently researching leading brands for my forthcoming book ‘Bold brands - how to be brave in business and win’. There are some obvious examples that we shall include but one brand that is causing us to pause for thought is Ryanair. Our research and experience of working with many leading brands suggests that those organisations that have a crystal clear view of their strategy and communicate their value proposition to target customers will outperform their sector. We also believe that the more focused organisations are in creating a customer experience that delivers their brand promise the more likely it is that they will win share of mind and ultimately, share of market.

There is no doubt about the clarity and single-minded focus of Ryanair; its stated aim is to disaggregate air travel and reduce costs to the point that it is able to sell seats cheaper than any other competitor. By unbundling air travel and forcing customers to pay for each service they use - be that check-in at the airport, hold baggage and even charging €1 for using the lavatories if mooted plans are implemented - it has turned the airline business model on its head. That is certainly bold in my book.
Ryanair can push this strategy right to the extreme of offering some seats free of charge knowing that it will make good margin on the add-on services they sell and from those passengers who book late and are forced to pay a large premium.
So is its strategy working? In the six months to September 2009 Ryanair reported that profits soared by 80% to £347m after tax despite a 2% fall in revenues over the same period. However, a large part of this increase was due to a 42% fall in fuel costs and the prospects for the next six months are not quite so bullish. 
Nevertheless, Ryanair is growing at the expense of its competitors. The airline reported a 17% increase in passenger numbers for September 2009. The airline said it carried 6.12 million passengers in that month, up from 5.12 million the same time last year. Ryanair now claims to be the ‘world’s favourite airline’, a tagline it cheekily stole from British Airways on the basis that BA reported its passenger numbers falling 1.7% in the same period. BA carried only 2.92 million passengers in September compared with 2.97 million in September 2008. BA also posted a £401 million ($663 million) pre-tax loss for the year ending March 2009.
Shares in Ryanair gained 2.9% in the week ending December 11th buoyed by an upgrade rating by Cazenove and a prediction that the airline will outperform the market. It would seem that the juggernaut will keep on crushing all opposition.
So much for financial results but what about operational performance? It is all very well being cheap but is Ryanair any good? Well it depends what you mean by ‘good’ of course. Will you have an enjoyable experience? Probably not. Will you be made to feel valued and well served? Highly unlikely. Will you arrive with your bags? Well according to Ryanair over 90% of its fights were on-time and less than one bag (0.67) per 1,000 passengers was misplaced between November and March while a report by the Association of European Airlines (AEA) confirmed that 17% of British Airways’ flights were delayed and BA lost 16 bags per 1,000 passengers, more than 20 times the number of bags lost by Ryanair. (I should point out that Ryanair does not report its performance to AEA and therefore whilst BA’s performance is verified, Ryanair’s is not)
OK, so it is pretty successful financially, and growing in market share. Its operational performance would not seem to be a limiting factor but what do customers think of it? The online travel guide TripAdvisor recently polled 4,000 of its members and the Irish discount carrier was singled out as the one that members liked the least. Probably most of us have experienced or know someone who has experienced, the cattle truck experience that is typical of Ryanair.  
But does that matter? My colleague Sampson Lee of G-CEM talks about the ‘Pain-Pleasure Gap’ and argues that the greater the contrast between the pleasure that a customer gets from using a product and the ‘pain’ required to do so, the more memorable the experience. So the long wait and anticipation at Disneyland merely serves to heighten the thrill of the ride when you eventually get it. The Ryanair travel experience reinforces the trade-off you make for the very low fares and therefore dramatises the value that it provides.
At Smith+co we define a branded customer experience as one that is Consistent, Intentional, Differentiated and Valuable. Let’s take each in turn and apply these criteria to Ryanair to see if, in fact, the airline does provide a branded customer experience.
  • Consistent. Ryanair certainly demonstrates consistency. This is not an organisation that wobbles between one strategy and another.
  • Intentional. Anyone that proposes to charge for using the lavatory and is willing to face the ensuing public outcry has though very carefully about the intended action and its consequences. The rudeness of Ryanair staff is only exceeded by the rudeness of CEO Michael O’Leary himself. We always suggest to our clients that leaders must epitomise the culture and DNA of the brand in their own behaviour. Michael O’Leary understands this and demonstrates his disdain for customers just as much as Richard Branson demonstrates his own passion for innovation
  • Differentiated. There is only one Ryanair. The airline has set its stall out on the basis of a totally frills-free experience at the very lowest cost. It has opened up the market for many people who could not have afforded to have flown but, unlike other low cost airlines, it doesn’t even pretend to care about service.
  • Valuable. Value is defined as what you get for what you pay. With Ryanair you don’t get much but you don’t pay much either and to that extent their proposition is very valuable for those customers for whom low price is everything. Let’s face it, you can put up with quite a lot for a short flight if you can get there for less than the price of a McDonald’s.
So according to our definition does Ryanair offers a branded customer experience then? Well no, not quite. In order for a customer experience to be branded the organisation must have intended to differentiate primarily on the basis of the customer experience and designed this to deliver value in and of itself. Whilst the Ryanair experience is distinctive, it has not been designed to differentiate the airline in a positive way from other airlines. It is more a by-product of Ryanair’s chosen strategy of price leadership.
Is this strategy sustainable? Here comes the crunch. I believe that in order for a brand to continue to grow it has to have a loyal following of customers. There has to be a positive emotional connection between the customer and the brand in order for there to be an enduring relationship. We are much more likely to remain loyal to the brands that we love. Nobody could accuse Ryanair of being lovable and Michael O’Leary might argue that that is not possible or desirable given his business model but I would point to John Lewis and Southwest Airlines, two brands that compete on price but who also have a following of affectionate fans. Ryanair will eventually run out of new short-haul routes and, in order to continue to grow at the same pace, it will need to consider longer flights and perhaps, even business class cabins. Whilst Ryanair’s business model might still work for longer flights will passengers be willing to accept the same level of experience?
As we emerge from this recession and the doom and gloom associated with the past two years, businesses and consumers will start to feel less strapped for cash. In this post-recessionary environment the appeal of the very low fares will start to be overshadowed by the pain that the Ryanair experience represents. The low morale and unpredictability of British Airways will make them unattractive because, let’s face it, who wants to pay a lot more for a mediocre experience?
My prediction for 2010? Customers will slowly start drifting back to those airlines that make them feel good again and who can put the fun back in flying. Airlines like Virgin Atlantic for example.
Of course Ryanair’s response may be to try to upgrade its service on the basis that it cannot drop its fares any lower, but the problem is that when you have spent so long forging a strategy and culture that places cost reduction way above customer service that avenue is essentially denied to you. As the old saying has it, ‘You can’t make a silk purse from a sow’s ear." Cazenove may be saying ‘Buy Ryanair’ My advice, for what it’s worth, is ‘Sell Ryanair’.
Shaun Smith speaks and consults internationally on the subject of the customer experience. His first book ‘Uncommon Practice- people who deliver a great brand experience’ investigates how leading brands differentiate, his second book ‘Managing the Customer Experience- turning customers into advocates’ is considered to be a landmark text book on how to create branded customer experiences. His latest book ‘See, Feel, Think, Do – the power of instinct in business’ investigates the role of instinct and innovation in customer experience.  For more information, check his website or follow him on Twitter.

Replies (3)

Please login or register to join the discussion.

11th Jan 2010 12:57



Companies have only one NEED - to run their business processes EFFECTIVELY (E).  Effective processes result in high profits (i.e. high 'R' of ROI - if 'I' is kept under control of course).

But E has two components - Quality (Q) and Productivity (P), in which P is (mainly) the reciprocal of cost.

Because in this life one:  

a) expects to pay for what one gets (because of market pricing), and

b) gets what one pays for (because of consumer protection laws)  

Now .......Q and P are, in AXIOMATIC DESIGN terms   === COUPLED ===.  

Actually Q and P are usually related as an S-curve on which there is only one optimal trade-off point for Q and P.  To improve profit requires that the equation of the S-curve be changed (i.e. shape/displacement).  This requires BPE (business process engineering and subsequent re-engineering). 

Business processes, especially B2B (business to business), but certainly also B2C (business to consumer) - B2C which is the main Ryanair business today - is very COMPLEX. Thus BPE is very complex and thus changing the S-curve shape will also be complex.

THUS - Ryanair needs a range of methodologies and, in turn a range of tools to help them ENGINEER THEIR PROCESSES in order that further Productivity gains do not degrade Quality to the extent that net Effectiveness, and hence Profit deteriorates.

Ryanair is an interesting example of the Michael Porter warning in his Competitive Advantage book published over a decade ago, "DO NOT GET CAUGHT IN THE MIDDLE OF COST v. DIFFERENTIATION".

But, as Michael Porter adds "UNLESS YOU HAVE AN INNOVATION".

An example of transformation of a segment of Enterprise Mobility, in which an innovation called PFCN (profitable fulfillment of customer needs) operates IN-THE-MIDDLE (between Cost and Differentiation) without getting caught is emerging in an on-going collaboration between Users, Vendors, Academia and Governments.

The PFCN Vision has already been broadcast in the Canadian Dragons' Den by Sir George the Dragon Slayer under the acronym MPS (mobile process service) - but the penny is yet to drop!

It is simply a coincidence with the appearance of this article that the participants in the MPS initiative will invite the airline industry, INCLUDING RYANAIR and Ireland, to join the ongoing 'Birth of the Mobile Process Service market' initiative. 

Conception has already occurred.  What a (k)night - namely Sir George - made that happen!

Now Conception to Birth will take nine months...we are almost human!

Watch this web-site for news during the ongoing gestation  period.....


Thanks (0)
By fernandomendes
09th Feb 2010 17:57

Hi Shaun,Thanks for your article. I really liked it, it's very "mind shaking", controversial, of course... but it's risky!It’s for sure a key issue now there is a big debate around Branded Experiences. In my opinion RyanAir has a real Branded Experience. We might have still different criteria, mine is very simple: Do you deliver what you offer at all the touch points? If the answer is Yes, then we have a branded experience being delivered.The promise doesn’t need to be based on service as we know it. Giving a great price to people and allowing people to fly for cheap is a very good service by its own.RyanAir signature is, as you said, "The Lowest Fares Airline". Its not "Fly with a smile"; or "Caviar on the wings". They basically promise "price" and "price" they deliver.To be honest they not only promise price, they also promise to be on-time, to be safe and to not lose luggage. And in all those criteria, as far as we know, they are delivering. So RyanAir is actually one of the few airlines actually delivering a branded service. Most of the airlines promise heaven and deliver nothing. That is where we should actually aim or finger, not to someone that promises a "2", charges "1", and delivers a "3". Anyway, here is my opinion, thanks again very honestly for you article which is a great source for an healthy reflexion and debate. Cheers,Fernando 



CEM Consultant

Thanks (0)
By Huan
02nd Dec 2010 21:27

Nice job! alot of usefull information, thank a lot!

Thanks (0)