Ryanair has made its name with its no frills, low cost approach – selecting to prioritise cheap fares over in-flight luxuries. The carrier has made steps to shake off its budget tag in recent years, with the launch of Ryanair Business Plus and renewed focus on customer experience.
But the airline is taking its move upmarket to new heights with yesterday’s launch of a corporate jet service. The customised Ryanair Boeing 737-700 will offer passengers luxury leather seats and fine dining as the airline shifts its focus from low-cost tickets to high-class travel.
Ryanair’s move can best be explained using the theory of 'selective excellence'.
Few businesses are as competitive as airlines. Innovative market entrants, deregulation and massive infrastructure investment — particularly in the Middle East and Asia — continue to drive up competition for passengers and profits.
With the lines between full-service, hybrid and low-cost carriers blurring, airlines have to work harder than ever to differentiate and build customer loyalty.
While each faces its own challenges, there is a simple fact that almost always rings true. An airline shouldn’t attempt to excel in every way if it wants to deliver an experience that aligns with what customers truly value. The key to success lies in looking at the customer experience more broadly, creating an experience that is ‘selectively excellent’.
Selective excellence means driving business performance by playing to a specific set of strengths and bringing them to life through the experience.
Ryanair’s new corporate service is a great example of this, with the airline choosing to focus on luxury and exclusivity for the first time.
Being selectively excellent follows the logic of many leading brands from other sectors, as they create clear value propositions that excel in some areas and simply meet expectations in others.
Zara shoppers will happily forgo durability to obtain the latest fashion at an affordable price. Similarly, passengers will accept flying into secondary airports if it means reduced airport taxes and cheaper pricing.
But low-cost doesn’t excuse hidden fees or late service, something Spirit Airlines’ new chief executive acknowledged last month. Despite being one of the most profitable low-cost carriers in the US, it was failing to provide a unique offering that would satisfy customers.
This meant customers were not willing to excuse the additional fees, and its reputation suffered.
So how can airlines achieve selective excellence? Like Ryanair’s private jet service, it starts with a clear brand idea.
Consider the US carrier, Southwest Airlines. Southwest’s brand idea of ‘Connecting People’ guides every aspect of the experience it delivers — from its overall value proposition to hallmarks such as allowing flight attendants to inject their own personality into on-board announcements. The brand helps Southwest stay focused on what it needs to differentiate itself and build emotional connections with customers.
Airlines have a broad set of opportunities to innovate the experience across the entire customer journey. That’s why understanding the customer mind-set, and how new experience innovations will impact the cost structure, is critical to guiding investments.
Delta Air Lines has mastered this over the last decade, being ahead of the competition in solving customer hassles such as device charging at the gate area and inflight Wi-Fi. Selective excellence helped Delta decide where, and where not, to innovate the customer experience.
And in doing so, ensured it came back from Chapter 11 to become a leader in both profitability and customer satisfaction among US carriers.
With its own take on selective excellence, expect Ryanair to continue soaring.