B2B International
B2B International

May 21, 2010

In his first Thursday Night Insight, Mark Hedley recalls his recent volcanic ash predicament, explaining how companies can very easily turn difficult situations to their long-term advantage.

It would be no exaggeration to say that I have appalling luck when it comes to air travel. Along with thousands of others, I recently saw my life turned upside down by the sudden eruption of Iceland’s tongue-twisting volcano. Having already spent more than a week in China and very much keen to get back to my loved ones, the prospect of being trapped in Beijing for another month didn’t exactly fill me with excitement. Unlike travellers stranded in continental Europe, many of whom were able to find their ways home by land or by sea, those of us stranded further afield were effectively frozen in a state of travel paralysis. In the end, after a week spent idling away the hours in my Beijing hotel room, the clouds of ash above Europe were finally to dissipate and I was eventually able to make it back to the UK with a massive sense of relief and an equally large mini-bar bill.

Whenever I have had flights delayed or cancelled, the biggest irritant has been the lack of clear and timely information from the airline about the situation. During the volcano crisis, for example, I was astounded to find that my airline had completely closed down its customer service hotline – not to be resurrected again until the after the crisis had ended! Given the extent of the chaos and disruption caused by the blanket shutdown of European airspace, it did seem a tad bizarre that the major airlines were allocating fewer rather than more resources to deal with customer enquiries and complaints. Vainly hoping to hear a friendly and reassuring voice at the end of my airline’s customer service hotline, I was disappointed to find myself repeatedly listening to a recorded message urging me to visit the airline’s website for more information (obviously, the thought of checking the website hadn’t occurred to me…!). In the end, the most useful sources of information turned out to be online blogs, social networking sites and satellite TV stations. The only pearl of wisdom to be found on my airline’s website ran: ALL FLIGHTS CANCELLED DUE TO ERUPTION OF VOLCANO IN ICELAND. WE APOLOGISE FOR ANY INCONVENIENCE TO CUSTOMERS THIS MAY HAVE CAUSED.

The whole volcanic ash crisis is estimated to have cost the airline industry over a billion Euros, and with a new of plume of ash from Eyjafjallajokull currently threatening European air space, the final cost to the sector is likely to be unknown for some time to come. Not only that, but the possibility of a second, larger volcano erupting sometime in the next few years means that frequent flight delays and cancellations could blight our lives for years to come. However, beyond the pure financial losses incurred by the airline industry, the volcano crisis may have inflicted even deeper scars in terms of its effect on long-term customer loyalty.

According to research, the airline industry benefits more from positive word-of-mouth recommendations than almost any other industry, which makes the poor customer service experienced by myself and others during the volcanic-ash debacle all the more baffling. Although you may not have been directly affected by the crisis, it’s almost certain that you know someone who was. Whether it be a friend, family member or colleague, I’m sure you have been forced to listen at length to someone you know vent spleen at the poor airline customer service they received during the crisis. Although you may not be consciously aware of it, such tales of woe are highly likely to affect your purchasing behaviour the next time you come to buy an airline ticket.

In both consumer and business-to-business markets, customer loyalty is as much about quality of products and services as it is about the ability of a supplier to go that extra mile (or even inch) to keep its customers happy. Customer loyalty is often driven by smaller, often inconsequential-seeming things, which may be hard to measure but can be vital to retaining customers over the longer term. The airline industry is perhaps unique in the impact that poor service can have on a customer’s personal and professional lives, and bad experience is therefore more likely to influence long-term loyalty than for other types of product or service. Consequently, when poor customer service leads directly to stress and anxiety for the customer (as in my case), these negative emotions will be internalised and will persist in a person’s psyche long after the ash has settled in continental Europe.

Although times of crises such as these present a real danger of losing customer allegiance, they also represent an excellent opportunity to gain customers’ trust and loyalty. With a few minor changes to its approach, my airline could have turned an overwhelmingly difficult situation for passengers into a positive customer service experience, resulting in increased long-term customer loyalty. For example, the airline could have dedicated more resources to keeping customers up-to-date on the unfolding situation, whether through a 24-hour customer hotline or by proactively calling, or using texts or emails, to keep customers informed. It seems absurd in an age where most of us are wired up to the teeth with mobile phones, laptops, I-phones, pods and pads that airline operators shouldn’t be able to use these technologies to keep customers up-to-date with the information they need most urgently. Such measures would have gone a long way to alleviating customer anxieties and would have concreted a positive image of the airlines in the minds of their customers.

In fact, most customers tend to show a higher level of understanding towards suppliers in times of short-supply or under challenging market circumstances. During such times, the simple act of keeping customers updated may be sufficient to meet customers’ basic needs and be the only thing that distinguishes a company from its competitors. Not only could this simple act help to secure customer loyalty in the long term, a failure to do so may have the opposite effect. Ultimately, as the airlines are slowly beginning to find out, a company’s ability to offer that extra level of customer service may well be crucial to securing long-term customer loyalty and enabling it to stand out over the competition.