Implementing Customer Engagement Management for low-cost carriers

“Ryanair branded embarrassing by customers”, “Stranded families, queues and awful service’’ and “Ryanair passengers claim they have not been offered water on board delayed planes”. Just a bunch of titles from news articles about low-cost airline Ryanair, published in the last couple of months. Even though their prices are low and attractive; customers expect more of an airline. Peelen & Beltman (2013) emphasise that the purchase only marks the beginning of the relationship between a customer and a company in which trust and commitment must develop.

Most low-cost carriers make use of the operational excellence discipline, from the value discipline model of Tracy and Wiersema (Peelen & Beltman, 2013). This discipline means that the company offers their customers a guaranteed low price and problem-free service. However, they do not spend much money or effort on product innovation or one-to-one relationships with its customers. This does not mean that airlines like Ryanair should not make use of strategies to improve their customer service and relationships. Peelen & Beltman also mention that due to the CEM (Customer Engagement Management) technologies, it is easier for companies to invest in CEM, no matter what their value discipline is. Therefore, it should be very valuable for low-cost carriers to focus on other aspects than their sales only.

The attractiveness of low-cost carriers lays in their price. Cheap, short flights without any other extras like food, entertainment or special service is the core product and also the unique selling point. We, as customers, accept this because we all know that we pay less money than we would pay for an airline like KLM, for example. Money is often a decision-maker and that makes us sometimes prefer a financial benefit over the service we receive. However, this might change when we are negatively affected by the lack of service. Would you still choose the same airline or would you rather pay €20 more for a company which is known for their better service? In the ideal situation, companies should be able to make a mistake without the continuity of the relationship becoming an issue (Peelen & Beltman, 2013). However, if this mistake or problem is never solved (not only for you, but for multiple customers), this can result in a clash in the relationship and results in you not returning to the airline.

The emphasis of most low-cost carriers is not on attracting more customers with a different strategy. The strategy is aimed on keeping the already existing customers, by keeping them happy. This is a defensive strategy (Peelen & Beltman, 2018), which means that the focus is on maintaining and defending one’s position. Rowe and Barnes (in Peelen & Beltman, 2013) expect that only two-sided relationships in which both the supplier and the customer respect each other have the potential to lead to a long-term competitive advantage. And that is exactly what an airline like Ryanair wants.  

Bibliography

Gizaukas, R. (July 24, 2018). Ryanair branded ‘embarrassing’ by customers over latest wave of strikes – as passengers’ support staff walkouts. Retrieved on September 11, 2018 from https://www.thesun.co.uk/travel/6850228/ryanair-strikes-2018-passengers-support-staff-walkouts/

Peelen, E. & Beltman, R. (2013). Customer Relationship Management. Harlow: Pearson.

Roberts, S. (July 27, 2018). Customers reveal truth about Ryanair chaos: Stranded families, queues and ‘awful’ service. Retrieved on September 11, 2018 from https://www.dailystar.co.uk/travel/travel-news/719115/ryanair-strike-flight-cancellations-cancellation-delay-compensation-customers   

Savva, A. (May 27, 2018). Ryanair passengers claim they have not been offered water on board delayed planes. Retrieved on September 11, 2018 from https://www.cambridge-news.co.uk/news/cambridge-news/stansted-ryanair-water-refreshments-complaint-14712824

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