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 ...
• How customer react and how many types
of complainer? 2#
Service Failure
Dissatisfaction/
negative emotions
No Complaint
...
Make the Service Fail-
Safe
Respond Quickly
Provide Appropriate
Communication
Treat Customers Fairly
Cultivate Relationshi...
A guarantee does not fit
with the company’s
image
Service Quality is truly
uncontrollable
Potential exist for
customer abu...
“High Flying Airlines Melts Down in Ice Storm”
JetBlue
JetBlue was founded by
David Neeleman1998
“bringing humanity back to air
travel and making the
experience of flying happie...
Second lowest rate of
customer complaints among
10 largest US airlines
Conde Nast Traveler + Travel
+ Leisure : the best d...
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/...
$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...
JetBlue Failure
1. Late/Slow Response
• JetBlue’s initial responses to the weather disruption were not
quick and immediate...
Jet Blue Failure
2. Unavailability of the Service Quality that was Promised
• JetBlue failure to provide the quality of se...
JetBlue Failure
3. Employees Communication and Responsiveness:
• A basic problem JetBlue’s internal communication system w...
JetBlue Failure (Reca
1. Late/Slow Response
2. Unavailability of the
Service Quality that
was Promised
3.Employees Communi...
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
Complain...
Jet Blue Customer Respons
IRATES
Respond Quickly
Provide Appropriate
Communication
Treat Customers Fairly
Cultivate Relationship
with Customers
Encourage a...
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
...
Cultivate Relationship
with Customers
JetBlue Response: Fixing The
Customer
Regular Live show from T5
(Taylor Swift, Pink,...
Recommendation for Future Better
Service
Solve Customer:
1. Establish service recovery plan
2. Provide Customer’s Guidance...
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...
Indonesia Airlines
Overview
Departemen Perhubungan 2013 Q.I
0%
44%
26%
15%
11%4%
Market Share
Lioan Air
Garuda
Sriwijaya
B...
Lion Air Response
1. Explanation to
media
2. Give
compensations to
the victims
3. Adding more
planes to fulfill
customer n...
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 Air...
Encourage and Track
Complaints
Learn from Recovery
Experience
• Build CRM
• If there’s a complain it can be easy to track ...
Learn from Lost
Customers
Make the Service
Fail-Safe
• Build a team/division who in charge of Customer Recovery
Intelligen...
Summary
• Service Recovery is a process to analyzing what
happened and changing the routines in order to
recover and fix f...
FAIL SAFE YOUR SERVICE
Do the job
right the
first time
Effectove
complaint
handling
Increased
satisfaction
and loyalty
Ide...
The Pyramid of Service Recovery Progression
• Stage 1, Moribund. There is no complaint
handling. Angry customers are ignor...
THANK YOU
Service Recovery Jet Blue & Lion Air
Service Recovery Jet Blue & Lion Air
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Service Recovery Jet Blue & Lion Air

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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.

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Service Recovery Jet Blue & Lion Air

  1. 1. FGD TEAM PS121 FERRY|FRISCA|GITA| DWI Marketing Services Magister Manajemen, Universitas Indonesia JetBlue SERVICE RECOVERY
  2. 2. THIS IS PCL TIME !
  3. 3. 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
  4. 4. • 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
  5. 5. 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#
  6. 6. 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#
  7. 7. “High Flying Airlines Melts Down in Ice Storm” JetBlue
  8. 8. JetBlue was founded by David Neeleman1998 “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
  9. 9. 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
  10. 10. JetBlue’s Experience BLISS SPA FOR KIDS VALUE SERVICE STYLE
  11. 11. 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
  12. 12. $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 ReportSource :
  13. 13. 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.
  14. 14. 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.
  15. 15. 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.
  16. 16. JetBlue Failure (Reca 1. Late/Slow Response 2. Unavailability of the Service Quality that was Promised 3.Employees Communication and Responsiveness:
  17. 17. The Tragedy
  18. 18. Questions How did JetBlue ultimately respond to this service failure? How JetBlue Customers Respond to Service Failures?
  19. 19. 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
  20. 20. Jet Blue Customer Respons IRATES
  21. 21. 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
  22. 22. JetBlue Response: Fixing The Customer 1. Issuing public apology 2. Announcing full refund Respond Quickly
  23. 23. JetBlue Response: Fixing The Customer Provide Appropriate Communication
  24. 24. 1. Give a free round trip ticket 2. Relaxed the policies of rebooking Treat Customers Fairly JetBlue Response: Fixing The Customer
  25. 25. Cultivate Relationship with Customers JetBlue Response: Fixing The Customer Regular Live show from T5 (Taylor Swift, Pink, Jamie Blunt)
  26. 26. 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
  27. 27. Service Recovery Plan for JetBlue
  28. 28. make customer easy to contact you
  29. 29. Lion Air case study “We make people fly (and die...)”
  30. 30. Lion Air Failure - Bali Crash
  31. 31. Lion Air Failure
  32. 32. 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
  33. 33. 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 0 0,05 0,1 0,15 0,2 0,25 0,3 0,35 0,4 0,45
  34. 34. Lion Air Response 1. Explanation to media 2. Give compensations to the victims 3. Adding more planes to fulfill customer needs
  35. 35. Recommendation 1. Explanation to media 2. Give compensations to the victims 3. Adding more planes to fulfill customer needs
  36. 36. 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
  37. 37. 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
  38. 38. 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
  39. 39. 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 .
  40. 40. 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
  41. 41. 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.
  42. 42. THANK YOU
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