Why Even Ryanair Failed at Loyalty: Are You Making the Same Mistake?

"You see," my uncle said, leaning back and loosening his belt a notch. We had just finished a spectacular dinner prepared by my grandmother—the kind of meal that leaves you feeling both heavy and invincible. He swirled the last of his wine, looking at me over the candlelight with a knowing grin:

"The problem with Andrej wasn't that he was losing money. The problem was that he thought he was winning."

The table erupted. It was a story we had heard a hundred times, but it never got old.

His mother just stared at him, probably wondering where she went wrong in his upbringing. But Andrej? He was just getting warmed up.

"A few months later, he comes back from Asia. He’s beaming with pride. 'Mom! Another win! The Asia trip only left us with a €1,000 deficit! I’ve improved by 50%!'"

My uncle paused for dramatic effect and took a sip of wine. "I asked him, 'Andrej, how are you still losing money on a sold-out tour?' And he looks at me, totally deadpan, and says, 'Well, I forgot that visas actually cost money. And I might have underestimated the price of fuel... and food.' He had literally forgotten to include the basic costs of existence in his 'vision.' In his mind, in two more trips, he’d finally be at zero and become a natural business genius."

We all roared with laughter that night. It was a funny anecdote back then, but many years later, I realize it was the most expensive business lesson I ever received for free. Andrej didn't realize that "vision" doesn't pay the utility bills. Only Customer Lifetime Value (CLV) does.

The "Bank of Mom" and the Nervous Investor

Andrej’s story is the perfect tragedy of the "hope-based" business model. He wasn't entirely wrong—it does take time for a business to become profitable. But here is the critical difference between a visionary and a gambler: The visionary knows exactly when the profit is coming.

Investors (and mothers) get nervous when they see a deficit without a destination. But in Andrej’s case, the destination was a complete mystery because he hadn't even mastered basic arithmetic, let alone high-level marketing metrics.

He wasn't just ignoring "Customer Acquisition Cost" (CAC)—he didn't even know the actual cost of his core service. When he looked at his spreadsheet, he saw a plane ticket and a hotel. He forgot that to get a guest to Asia and back, you also have to account for the visa fees he "generously gifted," the local transport he forgot to log, and the inconvenient fact that guests in Asia tend to enjoy eating more than once a day.

He was essentially running a "Buy One, Get One Free" sale where he forgot he was the one paying for both. His mother, looking at the bank statements, realized she wasn't investing in a growing business; she was subsidizing expensive holidays for strangers. She pulled the plug and "Bank of Mom" went into liquidation. She understood what Andrej didn't: you can’t calculate future profit if you don’t even know what it costs you to open the door today.

Even the latest digital tools that track every cent are useless if you don't input those "boring" foundational numbers first.

The Funnel: Understanding Upfront vs. Backend

CLV is the total profit from the entire customer journey. If you know your Back-end numbers, an initial loss is just an investment. If you don't? Then you're just paying for other people's vacations.

The Ryanair Lesson: Even Giants Fail the Homework

Even the biggest players can trip up when they don't do their homework. Take Ryanair. In 2025, they launched "Ryanair Prime." For an annual fee of €79, they offered free seats and insurance. They thought they were being clever, but they forgot the Andrej Rule.

Just eight months later, they killed the program. Why? Because while they collected €4.4 million in fees, their 55,000 "loyal" members were too loyal—they used the perks so efficiently that they drained €6 million in value from the airline. Ryanair suffered a €1.6 million loss in less than a year because they gave away their high-margin extras too cheaply. Even for a giant, if you don't have the math under control, your own loyalty program will sink you.

Beyond the Discount: Rewarding Without Losing the Margin

When we work with clients using our CLV tools, we always emphasize: Rewarding customers is not just about giving away money (or discounts). Some of the most powerful loyalty drivers are practically free.

True loyalty is built on:

• Attention: Recognizing a regular guest by name.
• Exclusivity: Early access to new offers or a "hidden" menu.
• Care: Remembering that a guest prefers a room away from the elevator.
• These intangible extras often bring better results than discounts because they create a human connection that a competitor cannot easily undercut with a lower price.

The Two Walls to Profit

To make your program actually work, you must break through two walls:

1. The "My Customers are Different" Ego: Many owners stubbornly believe that basic human psychology doesn't apply to their guests. They'll tell you their guests are "too serious" for such things. They are wrong. From billionaires to students—every human has a hardwired need for recognition. If you don't track them, you can't treat them like VIPs.
2. The Lack of SOPs (Standard Operating Procedures): You cannot leave profit to chance. You need a system. Your team must know exactly how to lead a guest from the first visit to that profitable "Back-end."

Today, these processes are easier to automate than ever. Digital tools tell you exactly when a customer is ready for the next step. But remember: No software can fix a visa cost that you forgot to put in your spreadsheet.

If you’re going to run a deficit, make sure it’s a calculated and deliberate one. Otherwise, you’re just another Andrej, hoping the next Christmas dinner isn't the one where you have to admit the bank is closed.