Staying Faithful in a Crisis - Lessons from a Volcano
It's now over 8 years ago, since an unpronounceable volcano (Eyjafjallajökull) in Iceland caused extraordinary disruption around the world. For some, the 2010 closure of British airspace was welcome, allowing them to enjoy an extended holiday or simply some peace and quiet under the flightpath. But for many, it was the cause of huge inconvenience, stress and extra cost. It also proved to be a test of whether many companies involved could keep their customer’s faith. Some excelled, managing to delight customers in very difficult circumstances, whilst sadly others fell very short of expectations.
Contrast Easyjet and Ryanair- both budget airlines faced losing large amounts of money, but chose very different responses. Ryanair initially refused to pay out to cover accommodation and food, in contravention of European regulations. They were then forced to make an ungracious u-turn, by which time the damage to the brand had been inflicted. Easyjet proactively supported passengers- providing over 100,000 hotel rooms and rescue flights once airspace reopened. Who would you rather make your travel plans with in the future?
Insurance cover highlighted further contrasts. Endsleigh, Virgin Money and others point-blank refused to allow any claims relating to the ash, declaring it an “act of God”. HSBC decided to “stand behind policy holders” and stated that “travellers have the reassurance that valid claims will be met”. That reassurance counts for a lot when making decisions on insurance providers. Not only that, but HSBC announced it would refund all cash withdrawals made abroad during the crisis – both surprising and greatly exceeding customer expectations.
Whilst some travel companies floundered, there are stories of others following the example of Wellington School in sending homework out to stranded pupils - maybe not so popular with the kids but earning points with the parents!
Some businesses, even those not directly affected by the ash were creative in turning it to their advantage. Savvy travel agents, with an eye to the future, illustrated the advantages of using ABTA-approved agents, in an age when many holidaymakers have migrated to ‘DIY’ holiday bookings. Meanwhile, The National Trust, Disney and many other attractions gave free visits to stranded passengers, gaining great publicity (at marginal cost) in the process.
So how can you stop your brand relationship turning to ash? How can you build loyalty and advocacy in difficult circumstances?
Key lessons from the volcano experience:
1. Consider the long term – immediate business costs may be easy to spot and calculate, but weigh any actions against the lifetime value of your customer. If you are able to delight them in a crisis, what benefit could this bring to repeat purchase and word-of-mouth advocacy in the future?
2. News travels fast - in this multi-media age, reports of good deeds and, more damagingly, bad customer service can circulate around the world in seconds. When planning a response, consider how traditional PR and contemporary social media can support your actions in a consistent manner.
3. Think outside the business box - know your customer and put yourself in their place. Be creative; understand what will make a difference to them in the situation they are in, beyond your normal business boundaries and responsibilities.
4. Be flexible – in a crisis, it’s rare that one rule will fit everybody. Take the opportunity to demonstrate that your business is not hidebound to a policy, but instead look for a range of options that offers choice and care. You may even discover a new way of working, better policies for the future or even a new customer offer altogether….
PS: new research suggests next time could be a lot worse.