'Calling Passengers' - An Ethical Problem in the Design of Self-Service Web Sites Amongst Low-Cost Airlines in Ireland

Ethics on the Internet has been a widely debated topic in recent years covering issues that range from privacy to security to fraud. Little, however, has been written on more subtle ethical questions such as the exploitation of Web technologies to inhibit or avoid customer service. Increasingly, it would appear, some firms are using Websites to create distance between them and their customer base in specific areas of their operations, while simultaneously developing excellence in sales transaction completion via self-service. This paper takes a magnifying glass with an ethical lens to just one sector – the low-cost, Web-based selfservice airline industry, specifically in Ireland. The paper notes the teaching of information systems development (ISD) and, for the most part, its practice assumes ethicality. Similarly, marketing courses focus on satisfying customer needs more effectively and efficiently within the confines of an acceptable ethos. This paper observes that while these business disciplines are central to the success of self-service Websites, there seems to be a disconnect between the normative view and the actuality of practice. What follows begins with an analysis of the normative approach to information systems (IS) design and marketing. A review of questionable ethical practices used by low-cost carriers (LCCs) is then conducted, followed by a discussion on the phenomena. The paper concludes with a look at the implications for research, teaching and practice. 1 The Success of Low-Cost Carriers (LCCs) Traditionally, air travel succeeded by offering a premium service and through the protection of government regulation, cartels of established airlines flourished and easily drove out competition (de Neufville 2006). The advent of economic deregulation of the US airline industry in 1978 followed by the United Kingdom (1987), Canada (1988), Australia (1990), the European Union (1992) and Japan (2000) meant legacy airlines had to consider carefully their cost of operations. The most important consequences associated with the progressive deregulation of markets are lower fares and higher productivity (Kahn 2002). Although the average yields per passenger mile (i.e. the average of the fares that passengers actually paid) were de2 Chris Barry and Ann Torres clining prior to deregulation, between 1976 and 1990, average yields declined 30% in real, inflation-adjusted terms, which translated into an estimated savings to travellers of $5 to $10 billion per year (Kahn 2002). Deregulation also fostered higher levels of productivity by removing the airlines’ restriction on pricing and destinations. Without these restrictions, intense price competition ensued, which spurred airlines to seek improvements in efficiency (Kahn 2002). The low-cost operation has been a highly successful model in the airline industry over the last decade (Alamdari and Fagan 2005). In Europe, LCCs are growing 20% to 40% annually (Alamdari et al. 2005) and currently hold 33% of the overall market (de Neufville 2006). Although there are variations in strategy among carriers, the basic LCC model is to achieve cost leadership to allow for flexibility in pricing and achieve higher operating margins. Typically, this strategy requires the carrier to examine every function and service they perform and either to eliminate those considered as superfluous frills or to charge for them separately as an addition to the basic fare. The sophisticated information systems (IS) LCCs employ for dynamic pricing and revenue management have contributed substantially to their healthy profit margins. However, in their focussed pursuit to eliminate frills, customer service is one function that has declined in importance. Among some LCCs, the justification given for neglecting meaningful customer service (i.e. managing complaints and concerns) are the very low air fares they offer customers. 2 The Normative Approach to Systems Development The dominant approach used in developing systems for several decades has been structured methods. Their origins are in scientific research and they are of a positivist tradition. The normative approach is explicit in the more popular structured systems analysis methods (Constantine and Yourdon 1979; DeMarco 1979; Martin and Finkelstein 1981), and is widely used by practitioners. Human-computer interaction (HCI) has long held that its basic goal is to improve the interaction between users and computer systems by making them more usable and amenable to the user’s needs (Dix, Finlay, Abowd, and Beale 2004). These fields are taught with the aid of popular texts on virtually every IS/IT under-graduate programme as the way in which information systems should be developed. Within these methods there is a near-universal supposition that a key goal of information systems development (ISD) is to improve usability and deliver a satisfying user experience. The authors would argue that this supposition has become unsafe. To borrow the language of Argyris (1980), the ‘espoused theory’ of how IS should be developed is, for some, quite different to the ‘theory-in-use.’ An examination of widely used texts on the principles of Web design (Nielsen 1999; Sklar 2006; Sharp, Rogers, and Preece 2007) supports the hypothesis that IS professionals should adopt a benign and moral posture in designing and developing information systems. It fails to uncover any instruction on design strategies that inhibit customer response or retard interaction. Indeed, such texts ordinarily implore designers to, for example, include contact links on the homepage that contain address, phone numbers and email (Nielsen and Tahir 2001). ‘Calling Passengers’ An Ethical Problem in the Design of Self-Service Websites 3 3 The Normative Approach in Marketing Marketing’s central premise is to satisfy customer needs and wants more effectively and efficiently than the competition, as a means to achieving organizational success (Boone and Kurtz 2004; Brassington and Pettit 2006; Jobber 2007; Kotler and Armstrong 2007). This marketing management philosophy, also know as the marketing concept, clearly distinguishes between those firms which merely have forms of marketing, such as the presence of a marketing or customer service department, from those firms which are market-focused and customer-driven in implementing their strategies. Firms successfully employing the marketing concept pursue a delicate balance between satisfying customers’ needs by creating more value, while simultaneously achieving organizational objectives by accruing profits. An effective interaction between a buyer and seller may result in a satisfied customer, but to retain customers over the long-term means managing customer relationships consistently. In today’s technology rich environment, marketers facilitate their individual interactions with customers through customer relationship management (CRM) systems. Other terms for CRM are relationship marketing and customer intimacy; these terms reflect CRM’s strategic intent – focusing on satisfying individual customers meaningfully as well as profitably for the firm (Wagner and Zubey 2007). Through the systematic combination of people, process and technology, CRM enables firms to find, acquire and retain customers. Finding and acquiring customers costs firms money, but retaining existing customers is substantially more profitable than seeking fresh customers for new transactions. On average, the cost of acquiring new customers is five times more than servicing existing customers (Keaveney 1995). Furthermore, the marginal cost of servicing existing clients declines over time, whereas the cost of attracting new customers typically increases over time. In CRM ‘meaningfully satisfying customers’ refers to facilitating the full spectrum of customer interactions, including complaints. Marketers view customer complaints as opportunities for service recovery that can turn angry, disgruntled customers into loyal, vocal advocates for the firm. Indeed, good service recovery typically translates into higher sales than if all had gone well initially (Smith, Bolton, and Wagner 1999). Ultimately, poor service recovery translates into lost customers that migrate, often permanently, to competing firms (Keaveney 1995). Because many firms handle customer complaints poorly, those firms that do succeed in offering excellent service recovery, secure an unrivalled source of competitive advantage. 4 LCCs’ Lack of Application of a Normative Approach in Marketing LCCs offer value to customers through their low fares, and achieve profits by calibrating costs carefully to achieve attractive margins. A number of LCCs use their information systems in a conflicting manner when managing customer interactions. The Websites for these LCCs smoothly engage and facilitate customers through the self-service process to purchase tickets and ancillary products, such as insurance, accommodation and car rental. However, the Websites are ‘gummy’, awkward and 4 Chris Barry and Ann Torres sluggish in facilitating customer complaints and concerns. The Websites do not readily display contact details, such as telephone numbers, email addresses to register complaints and concerns. Customers are given only a postal address and, on occasion, a fax number, which delay the customers’ opportunity for a timely response. This gumminess is an intentional design feature and is contrary to the ethos of designing a ‘good system’ to facilitate the full spectrum of customer service. These LCCs are exhibiting the classic strategic flaw of having the trappings of marketing without offering substantive marketing practices (Ames 1970; Peattie 1999). That is, LCCs offer superficial customer service on their Websites, but do not make meaningful efforts to address customer complaints and concerns, resulting in service failures, poor service recovery, and ultimately, the loss of future revenue from these disappointed customers. In employing these gummy features, LCCs are pursing a transactional rather than a relational model of marketing behaviour. They are seeking a high-volume of discrete, profitable transactions rather than a high-volume of profitable customer relationships enduring over time. That is, the airlines are pursuing short-term profitability through generating high-volume transactions, rather than pursing long-term profitability through the development of a loyal customer base. The loss of existing customers does not appear to be a concern for many LCCs; they believe their low fares compensate for poor service or justify the lack of service recovery efforts. Ultimately, these LCCs are increasing their operating costs in the search for new customers. Moreover, they appear to manage their business as if there were an infinite supply of new customers. In time, the most successful LCCs may be those who offer customers competitive pricing policies and high levels of service recovery. 5 Reviewing Ethically Questionable ‘Gummy’ Practices 5.1 Heuristic Evaluation The authors conducted an exploratory study to evaluate the usability and functional design of six LCC Websites used in Ireland; four of these carriers (Aer Lingus, Aer Arann, bmibaby and Ryanair) operate out of the Republic of Ireland and two carriers (easyJet and Jet2.com) out of Northern Ireland. The methodology used was heuristic evaluation, well established within the HCI field. It is a usability inspection technique that systematically assesses a user interface design for usability (Nielsen 1994). Heuristic evaluation is guided by usability principles (i.e. heuristics) that examine if interface elements conform in practice to those principles. The technique is adjusted for evaluating Websites (Sharp et al., 2007). The heuristics were customized for identifying usability issues for the low-cost airline industry based partly on Nielsen’s set and the authors’ knowledge of issues, as well as ethical problems emerging from the sector (Alter 2003; Clark 2006; ECC Network 2006). The analysis, however, goes beyond the assessment of the ‘goodness’ or otherwise of usability and makes judgements on the concordance of Website features with broader expectations of IS design and marketing principles. The heuristics developed are shown in Table 1. ‘Calling Passengers’ An Ethical Problem in the Design of Self-Service Websites 5 Table 1. Evaluation Heuristics Heuristic Description Aesthetic and minimalist design  The Website should not contain unnecessary or rarely needed clutter. Navigation design  The means by which users navigate their way around the information structure should be clear. Internal consistency  Users should not have to ponder whether different terms or actions have the same meaning.  The language should be that of the user where possible and information should appear in a natural and logical order. Depth of navigation menu  The Website should be designed so that it is shallow rather than deep. Completion of tasks  The system should be designed so that users are able to efficiently and effectively complete a task to their expectations.  Are there features that accelerate functionality for expert users but remaining flexible enough for novice users? Clarity of feature functionality  A feature should fulfil the function implied by the dialog.  Dialog should be simple with no irrelevant or unnecessary information. Minimizing the user’s memory load  The interface should not require users to remember information between one part of the system and the next. Help users recognize, diagnose and recover from errors or unintended actions  Careful design that prevents a problem from ever happening is better than good error or warning messages. 5.2 Task Construction Given the heuristics in Table 1, a number of tasks were established (see Table 2) to gauge the effectiveness of each of the LCC Websites. These tasks are commonly conducted activities that users would be expected to use as part of an online, selfservice Website. They are representative pre-sale, sale and post-sale activities. Table 2. Analysis Tasks