Customer experience (CX) ratings amongst airlines have fallen within the last year. This may come as no surprise to those who have followed the recent negative publicity which has plagued both low-cost and traditional carriers. From British Airway’s (BA) cost-cutting and removing free drinks from short haul services and poorly handled IT meltdowns; to Ryanair’s recent horde of cancelled flights.
KAE’s Customer Experience Study (2017) uncovered customer experience rankings across industries, and found that airlines ranked below supermarkets and department stores. This is particularly surprising considering, for traditional carriers at least, aviation is an industry with the prioritisation of customer experience at its core. While many airlines may have a vision of excellent customer experience – the question remains if this vision has been prioritised both internally and externally to provide a holistic standpoint on customer experience, that radiates through the company and allows every employee to deliver this standard. In what ways does customer experience differ across low-cost carriers (LCC) and traditional carriers, and how are airlines prioritising initiatives?
KAE’s Customer Experience Study (2017) shows a large variation in customer experience across both LCCs and traditional carriers.
Specifically, the CX ratings for traditional carriers are dispersed across the higher end of the scale. The standout rating is that of Emirates – who are considered a best in class example in delivery of customer experience. Emirates view customer experience as a key commodity and market differentiator. Every employee in every department is given training on the Customer Journey – linking employee behaviours to the emotions of the customers and giving an understanding of how they can make a difference. Not to mention the innovative investments in technology and aircrafts (like their recent USD$15.1 billion investment in 40 new Boeing 787-10 Dreamliners) to improve the experience of the customer.
Some, however, have lost sight of their CX focus. BA, for example, have recently experienced a fall from grace, having historically held a solid reputation of good customer experience. Recent cuts and the reprioritisation of customer experience has edged its reputation into question and alienated loyal customers. Cuts such as removing free drinks and meals on their short haul flights, and substituting breakfast with a biscuit, has left them with little to differentiate themselves from LCCs. This has likely been a mistake in BA’s growth strategy.
However, it seems that BA have backtracked on their decision to cut their CX investment and are now reinvesting in what makes their customers value them and their service. It will be interesting to see how or if BA’s customer experience ratings will recover from this slight detour from their full-service carrier status.
Unsurprisingly, the LCC’s were ranked lower in the survey: with their low-cost and no-frills offerings being their key differentiator. However, with competition growing amongst this LCC group – will the importance and prioritisation of customer experience be a growing concern for low-cost carriers?
Ryanair, for example, have traditionally downplayed customer experience and worked on the assumption that low costs will be their biggest business driver. Clearly, this is a business model that has worked, with Ryanair holding the title of largest European airline, by passenger traffic. However, within the last few years, the mammoth airline has attempted to place an emphasis on their customer experience with their “Always Getting Better” (AGB) program, which aims to target and improve customer pain points to make flying with Ryanair more frictionless. It appears that while LCCs may not be investing in customer experience in the same way that traditional carriers are, but they are beginning to understand the benefits and incorporate them CX-led investment decisions in line with their business plans.
As has been previously discussed in KAE’s blog, customer expectations drive customer satisfaction. Under the aviation umbrella, the consumer expectations of travelling with a LCC and traditional carriers are very different. If a customer flies with a traditional carrier and receives an experience more akin to a LCC, they are rightfully unhappy. Whereas if a customer flying on a LCC is provided with a ‘WOW’ moment, they will be far more pleased than if they had the same experience with a traditional carrier. This disparity in customer expectations associated with each type of carrier influences the level of investment required in their business. When a traditional carrier has an ethos of customer service, but this ethos is not fully embedded within the internal and external sides of the company, it can cause problems. Using Emirates as a use case example – their investment in customer experience has been embedded across the organisation and their excellent customer experience reputation and ratings are the results. This is where the lines have been blurred in the case of BA, who had lost sight of their brand promise. Investing in CX is a must for traditional carriers, for risk of losing custom; whereas LCCs have more flexibility.
For LCCs, customer expectations are lower than on a traditional carrier’s flight. They expect to pay for extras, they expect an acceptable service, but not exemplary. Their expectations are low and therefore do not have too far to fall. On the other side of the coin, when one walks onto a short haul flight run by a traditional carrier like BA, they expect a greater standard of service than an LCC – they perhaps expect a friendly face, to be treated well – and to get drinks and some food. They do not expect to pay for basics – as the cost of their ticket is already reflective of their supposedly improved service, and it is the incongruence which causes dissatisfaction. Increasing competition at the low-cost end of the airline scale mean that price may not remain the biggest differentiator for long, and as Ryanair realised with their own investment, a top-down understanding of customer experience is beneficial.
The investment in customer experience in the airline industry is a contentious one, namely because of the different priorities of LCC and traditional carriers. These priorities are driven by consumer expectations and the company’s positioning of competitive differentiation. Both an internal and external view of customer experience and how it impacts the business should be considered a priority to achieve a seamless experience for the customer in the case of traditional carriers. LCCs have greater flexibility, but should still consider CX investment as a beneficial commodity.
Photo taken by Chris Holmes, SVP, KAE
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