Open letter to Ryanair: Three reasons why Ryanair's customer care strategy is wrong and damaging future profits
Open Letter to Robin Kiely, Ryanair
August 9, 2013 in London
Dear Robin,
In the article I read today in PR Week you stated that Ryanair will no longer provide customer service to its customers over Facebook and Twitter. You mentioned that “the sites 'would not be helpful' to Ryanair's comms strategy” and “A Facebook account would not be helpful to us, as we would have so many people looking for a response.” You questioned the benefits of investing into necessary resources by saying that “maintaining a dedicated account would probably mean 'hiring two more people just to sit on Facebook all day'.
As a founder and CEO of a company that dedicates its existence to helping business care about their customers using social media, I’d like to point out three reasons why I think that closing your customer service channels on Facebook and Twitter is wrong strategic decision and that it will damage your future profits.
1. Ignoring customers leads to customer losses
Social Customer Care is a simple and inexpensive way to ensure that a company is not losing valuable customers. Never has it been so easy to listen and to respond to customer queries. By deploying a social customer care solution, Ryanair will be able to identify dissatisfied customers and engage them in real-time so they will not choose the competition next-time. Research confirms that 88% of customers will leave to the competition after being ignored while seeking to resolve a customer service issue previously. 90% of upset clients can be retained thanks to social customer care.
2. A Missed opportunity of 13,000 customers every day
You mentioned that having a Facebook account would not be helpful to Ryanair as there would be too many of your customers looking for a response. Turn it the other way around. Your customers are calling you, you are ignoring them and now you are disconnecting the phone line. Ignoring your active customers on social media means losing a huge marketing opportunity. 71% of consumers who experienced positive social customer care are likely to recommend that brand versus 19% that don’t get a response. When we take an average Facebook user who has 130 friends, and let's say that there is some 100 customers daily that a company don't respond to, their total reach is 13,000 people. (It's reach to their Facebook friends is over 1.7 million people, but let's not get that far). Satisfying them by providing a timely response can generate a positive recommendations to roughly 9,200 customers. Monetarily speaking, when we compare each recommendation to a lead generated by pay-per-click advertising with fairly low CPC of £0.20, that creates a value of £1,840 a day, which is roughly £0,6m a year. Compare this to two FTE customer service operators yearly salaries (who can be your current service operators utilized over less frequent hours given the differences between peak usage of phones vs. social media), that might be let's say £70,000 and cost of customer care technology of up to £30,000 and you get total net value of £0.5m.
3. Losing customers trust is irreversible
Opening up social channels as customer touch points is inevitable for any business whose profits depend on loyal customers. More and more customers are using social media for solving customer service issues. When asked 52% of people would turn to in-store managers to resolve customer issues, 33% would call a customer service hotline and 39% would prefer to do it via social media. Your competitors are aware of this trend - The number of companies handling more than 25% of their customer care enquiries via Social Media doubled in 2012 from 9% to 18%.
Although Ryanair's strategy is to keep costs at the lowest possible level and create the highest value-price ratio, being not responsive to hundreds of customers on Twitter and others on Facebook is harming its brand equity. It's not companies that decide whether to be on social media or not, customers have decided already. Not responding to them is like not picking up the phone.
I hope that this open letter will help Ryanair to re-open it's discussion over communication strategy and re-evaluate the current situation. Ryanair should open up its Twitter and Facebook channels as a customer service channels and show that they care about their customers. The losses for not doing so might cause inevitable damages to company profits and most importantly to customers trust.
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