service recovery jet blue & lion air
DESCRIPTION
Lets learn service recovery from Jet Blue Airline when they faced a problem in a nightmare Valetine"s day. Then, we try to help Lion Air which also has many problems within this company. Hopefully Lion can learn and improve their service recovery in order to leverage their quality as in revenue.TRANSCRIPT
FGD TEAM PS121 FERRY|FRISCA|GITA| DWI
Marketing Services Magister Manajemen, Universitas Indonesia
JetBlue SERVICE RECOVERY
THIS IS PCL TIME !
A Service Failure Is generally describe as service performance that falls below a customer
expectation in such a way that leads to customer dissatisfaction.
• Please describe Service Failure, Service Recovery and the connection both of them 1#
Service Recovery refers to the action taken by an organization in response to a service failure And both of them give big impact on customer satisfaction, loyalty, word of mouth
communication and bottom line performance
• How customer react and how many types of complainer? 2#
Service Failure
Dissatisfaction/ negative emotions
No Complaint Action
Exit/Switch Stay
Complaint Action
Complain to Provider
Negative word of mouth
Third –Party Action
Exit/Switch Stay
VOICERS
PASSIVE IRATES
ACTIVIST
least likely to take any action
actively complaint to the service provider,
But less likely to spread word of mouth,
switch patronage or go to third parties
“Service Provider’s best friend)
less likely to give second chance to service
Provider and instead will switch to a competitor
above-average propensity to
complain on all dimensions
Make the Service Fail-Safe
Respond Quickly
Provide Appropriate Communication
Treat Customers Fairly
Cultivate Relationship with Customers
Encourage and Track Complaints
Learn from Recovery Experience
Learn from Lost Customers
Guarantee the Service Offering
Excellent Service Recovery
• Please explain Service Recovery Strategies 3#
A guarantee does not fit with the company’s image
Service Quality is truly uncontrollable
Potential exist for customer abuse of the guarantee
Costs of the guarantee outweigh the benefits
Customers perceive little risk in the service
Existing service quality in the company is poor
• When to use Service Guarantee 4#
“High Flying Airlines Melts Down in Ice Storm”
JetBlue
JetBlue was founded by David Neeleman 1998
“bringing humanity back to air travel and making the experience of flying happier & easire for everyone”
1999 Offer low-cost, high quality service to & from NY city “NY’s hometown airline”
Amenities reserved for pricier carriers, wider seats, more legrooms & storage space, 24 channels of inflight T, touch screen check-in
2000 Non-stop service between NY & Fort Lauderale, Florida
2001 The travelling public responded favorably to Neel’s offer of excellent customer service, upscale amenities & low fares
2002 JetBlue go public (IPO)
2004 Flying high. The revenues had quadrupled. 11st place in revenue passenger miles.
History of JetBlue
2005 Diamond Certificate Excellence Award
Second lowest rate of customer complaints among 10 largest US airlines Conde Nast Traveler + Travel + Leisure : the best domestic airlines OAG : the best low cost / no frills airlines
2006
2007 Fortune : 3 most admired airlines Market Metrix : best customer satisfaction
History of JetBlue
JetBlue’s Experience
BLISS SPA FOR KIDS
VALUE
SERVICE
STYLE
Black Valentine Day
14 Feb 2007 Winter Storm
in JFK Airlines delay
Cancelled flights
11 hours trapped on
plane
No support/ No food
Customer was damaged
Nightmare! Dissatisfied
$16,85 $15,60
$9,98
$7,20
$6,39 $6,75
$0,00
$2,00
$4,00
$6,00
$8,00
$10,00
$12,00
$14,00
$16,00
$18,00
2005 2006 2007 2008 2009 2010
JetBlue Stock Price
560
580
600
620
640
660
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
holders 600 600 645 644 655
Stock Ownership
$9.012
$11.783
$14.729
$18.565
$21.387 $21.920 $22.450 $24.254
$0
$5.000
$10.000
$15.000
$20.000
$25.000
$30.000
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010
REVENUE PASSENGERS
JetBlue’s
Report Source :
JetBlue Failure
1. Late/Slow Response
• JetBlue’s initial responses to the weather disruption were not quick and immediate.
• JetBlue failed to cancel flights on time, leaving some passengers stranded on the tarmac for as long as 10 hours.
• The policy of initially postponing, but not cancelling flights, resulted in snowballing cancellation for nearly a week.
• JetBlue’s managers always followed a “Wait and See” approach with the weather.
Jet Blue Failure
2. Unavailability of the Service Quality that was Promised
• JetBlue failure to provide the quality of service that was promised “Bring humanity back to air travel”
• JetBlue had not the proper service standard for any kind of weather emergency which drive the company to many other service failures.
JetBlue Failure
3. Employees Communication and Responsiveness:
• A basic problem JetBlue’s internal communication system which led to lower quality in employee responsiveness.
The ice storm had left a large portion of the airline’s while 11,000 pilots and flight attendants far from where they needed to be to operate the planes.
And JetBlue lacked the trained staff that was needed to find them and tell them where to go. It was the first time in the company’s history that they had so many people out of position.
• Undependable the reservation system.
The system was so overwhelmed that customers were unable to get through to human agents to check on a flight.
JetBlue Failure (Reca
1. Late/Slow Response
2. Unavailability of the
Service Quality that
was Promised
3.Employees Communication
and Responsiveness:
The Tragedy
Questions
How did JetBlue ultimately respond to this service failure?
How JetBlue Customers Respond to Service Failures?
Service Recovery Strategy
Service Failure
Dissatisfaction/ negative emotions
No Complaint Action
Exit/Switch Stay
Complaint Action
Complain to Provider
Negative word of mouth
Third –Party Action
Exit/Switch Stay
VOICERS
PASSIVE IRATES
ACTIVIST
Figure 7.3 Customer Complaint Action Following Services Failure
Jet Blue Customer Respons
IRATES
Respond Quickly
Provide Appropriate Communication
Treat Customers Fairly
Cultivate Relationship with Customers
Encourage and Track Complaints
Learn from Recovery Experience
Learn from Lost Customers
Make the Service Fail-Safe
Guarantee the Service Offering
Excellent Service Recovery
SERVICE RECOVERY STRATEGY
Fix the Customer
Fix the Problem
JetBlue Response: Fixing The
Customer
1. Issuing public apology
2. Announcing full refund
Respond Quickly
JetBlue Response: Fixing The
Customer
Provide Appropriate Communication
1. Give a free round trip ticket 2. Relaxed the policies of rebooking
Treat Customers Fairly
JetBlue Response: Fixing The
Customer
Cultivate Relationship with Customers
JetBlue Response: Fixing The
Customer
Regular Live show from T5 (Taylor Swift, Pink, Jamie Blunt)
Recommendation for Future Better
Service
Solve Customer: 1. Establish service recovery plan 2. Provide Customer’s Guidance (twitter, blog,
social media)
Solve Problem: 1. Build IT system for faster rebooking activity 2. Build Dashboard system (weather pre detect / Airlines Applicarion) 3. Training Employee to handle complain
Service Recovery Plan for
JetBlue
make customer easy to contact you
Lion Air case study
“We make people fly (and die...)”
Lion Air Failure - Bali Crash
Lion Air Failure
1. Much of customer don’t know how to complain. There’s no media for complain.
2. Management did not pay much attention to customer complaints.
1. Lion plane’s system monitoring and checking are not running well.
2. There’s no system or database for record ing complain
3. The Employee are not trained well.
Lion Air Customer Response
Indonesia Airlines
Overview Departemen Perhubungan 2013 Q.I
0%
44% 26%
15% 11% 4%
Market Share
Lioan Air
Garuda
Sriwijaya
Batavia
Merpati 70%
72%
74%
80%
81%
85%
Merpati
Batavia
Lion
Sriwijaya
Wings
Garuda
On Time Performance
00,05
0,10,15
0,20,25
0,30,35
0,40,45
Lion Air Response
1. Explanation to media
2. Give compensations to the victims
3. Adding more planes to fulfill customer needs
Recommendation
1. Explanation to media
2. Give compensations to the victims
3. Adding more planes to fulfill customer needs
Respond Quickly
Provide Appropriate Communication
Treat Customers Fairly
Cultivate Relationship with Customers
Contact Airport Team, ground Team, SARS
Press Release Kit, Press Conference with media, VP of Service in charge
Compensate with money according airlines rules.
Take care of the customer to Crisis Center
SERVICE RECOVERY STRATEGY
Encourage and Track Complaints
Learn from Recovery Experience
• Build CRM • If there’s a complain it can be easy to track it. - Type of complain (onboard/non-onboard) - Urgency and Majority Complain - How long the problem solved - The solutions , alternatives or compensation given - Who’s in charge
• Build a Knowledge Management for the employee. • Collect data of complain/problem solved. • Divide into categories : Urgent, Mandatory,
Miscellaneous. • Save it into database. • Employee use it as a tool kit for problem solving
guidance. • If necessary, it can be use as a material to define a
new SOP.
SERVICE RECOVERY STRATEGY
Learn from Lost Customers
Make the Service Fail-Safe
• Build a team/division who in charge of Customer Recovery Intelligence:
- Analyze why customer left. Who they are? Are they frequent flyer? - Research the problem caused? Is it majority? - Consider they into the pyramid of service recovery
progression. If they are worth, What can we do to take them back?
* Offer some special programs, i.e: holiday packet, family discount, hotel experience. * Discount for specific destination
• “Happy Complain Culture”. • Company should not consider complain as a poser, instead
manage it properly as service recovery. • Train employees intense and gradually. Benchmark from
others airlines. • Employees medical checkup gradually. • Management conduct plane inspection. • Empowering employees. Gives them authority to solve
problem on the spot in order to take care customer satisfaction.
SERVICE RECOVERY STRATEGY
Summary
• Service Recovery is a process to analyzing what happened and changing the routines in order to recover and fix failure.
• It is important, since a company spend five times as much to attract a new customer as to keep a dissatisfied one.
• Failure resolutions and Customer satisfaction after recovery has a positive on loyalty intentions.
• Service recovery is indirectly related with profit. About 65% of an average company’s income comes from loyalty intentions of repeat customers .
FAIL SAFE YOUR SERVICE
Do the job right the first time
Effectove complaint handling
Increased satisfaction and loyalty
Identify service complaint
Resolve complaintrs effectively
Learn from the recovery experience
Conduct research Monitor complaints Develops “complaint as opportunity culture”
Develop effectove syste, and training in complaints handling
Conduct root couse analysis
Sumber : Lovelock. Wirtz. 2007. Service Marketing : People, technology. Strtagey. Prentice Hall
Close the loop via feedback
The Pyramid of Service Recovery Progression
• Stage 1, Moribund. There is no complaint handling. Angry customers are ignored.
• Stage 2: Reactive. Customer complaints are heard, and a response is made. But it's a haphazard process with no defined goals for the response and no one owning this business process.
• Stage 3: Active Listening. At this stage, the response to issues voiced by customers is structured. Specific people have the responsibility to respond to complaints and guidelines are in place for the response. However, it is still reactive.
• Stage 4. Solicitous. The critical change from Stage 3 to 4 is the move from reactive to proactive solicitation of customers with issues. The reason this is so important is that most customers don't bother to complain. The solicitous role is accomplished by encouraging customer to voice their complaints
• Stage 5: Infused. The pinnacle of Service Recovery Practices is achieved when the complaint identification merges with business process improvement or six sigma programs to support root cause identification and resolution.
THANK YOU