A little love goes a long way in customer service

In today's business world, companies need to think twice about a take-it-or-leave-it attitude

PUBLISHED : Wednesday, 13 November, 2013, 12:52am
UPDATED : Wednesday, 13 November, 2013, 12:55am

Is it necessary for business owners to love their customers and, indeed, do businesses need to be loved by their customers? This question has been brought into sharp focus by a seemingly remarkable change in attitude on behalf of Michael O'Leary, the abrasive boss of Irish-based Ryanair.

O'Leary is responsible for turning the low-priced, no-frills Ryanair into one of the world's biggest airlines. It has been as famous for its low fares as it is infamous for its surly attitude towards passengers.

Stories abound of huge levies added to ticket prices in cases where passengers failed to stick to the letter of the terms on their tickets. While flying, passengers were subject to spartan conditions and hard-sell tactics for drinks and food, etc.

On top of this was the way that O'Leary talked about his customers and his relentless "take-it-or-leave-it" attitude; basically telling critics to get stuffed if they did not like the way the airline was run.

Hong Kong’s most prominent tycoons go that extra mile to present a benign image

All this notwithstanding, Ryanair carried 79.3 million passengers last year. It played a key role in giving people of limited means access to foreign travel and helped businesses cut costs. But the tide is turning and recently the company has been forced to issue two profit warnings as customer resistance to its way of doing business mounts and rival airlines have piled on the pressure, winning passengers by contrasting their services to those offered by Ryanair.

O'Leary has now performed an impressive volte-face and declared: "I want to be loved by my customers; I want my customers to love me the way I love them."

Blimey, these were words no one expected to come out of his mouth and they raise bigger questions.

These questions do not just apply to the mass markets where customers are expected to put up with a lot in return for low prices.

Right at the other end of the spectrum, we see customer resistance to the haughty attitude of exclusive brands that behave as though their customers are privileged to buy their goods and services.

Occasionally and spectacularly, the brashest successful businessmen show a level of contempt for their customers that rebounds fatally. This was certainly what happened when low-cost jewellery retailer Gerald Ratner made a speech in 1991 rhetorically asking an audience how he could sell his goods at such a low price. His answer: "Because [they are] total crap." Ratners, the jewellery group, went out of business almost overnight.

A less dramatic example, but far closer to home, comes from HSBC, which decided to operate a new system for cash withdrawals from its network of overseas automated teller machines that basically resulted in some customers being stranded without cash. The company's response oscillated between implying that customers were responsible for their own stupidity, grudging acknowledgement of fault, and belated recognition that the company had to do something to fix the problem.

Anecdotal evidence suggests that this was the tipping point for long-standing customers who were thinking of changing banks. Having been an HSBC customer myself, I gave up on this haughty "service provider" many years ago after shabby treatment far exceeding anything that was acceptable.

However, the basic question lingers - do businesses really need to be nice to customers and should business leaders go out of their way to be nice?

In Hong Kong, levels of service are far higher than those in Europe or North America and customers are very demanding. It should be noted in passing that these demands are satisfied even by some publicly owned businesses such as the post office and water authority, which provide exceedingly good services. The same cannot be said of the duopoly that dominates the supermarket trade or, even more infamously, of the property developers' cartel that wins few prizes for customer satisfaction.

Yet Hong Kong's most prominent tycoons go that extra mile to present a benign and favourable image. The city's universities are littered with buildings bearing their names as testament to their generosity. Charities patronised by the super-rich spend a lot of money publicising the names of their wealthy donors. And, as veteran business reporters will testify, Lunar New Year was a time of rather impressively filled red packets from tycoons offering seasonal greetings.

The bottom line is that a little niceness goes a long way and that even the most successful companies need to think very carefully about a take-it-or-leave-it attitude.