Tom Muldowney - Northwest Airlines and the Snow Storm - Dealing with Customers in Times of Crisis
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Here is an evaluation of the Northwest Airlines case study and how the company could have dealt with their crisis better to ensure their customers remained satisfied. This was part of my MBS Digital Marketing in DCU, Dublin, Ireland.
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Tom Muldowney - Northwest Airlines and the Snow Storm - Dealing with Customers in Times of Crisis
- 1. MG 527 Services and Tourism Marketing Tom Muldowney – 59212790 Eimear Murphy- 59210952 Rosemary Clancy - 59212099 Caroline Mullen - 59213267 Northwest Airlines and the Detroit Snowstorm
- 2. Q1. How bad was the situation? 1. People Aggression Impatience Hostility Rude 2. Policy Cell Phones Alcohol consumption Smoking “Service failures can often be categorized by faults that fall into the following criteria people, policies, processes and the actual service”. (Tax and Brown 1998)
- 3. How bad was the situation? • Processes • Lack of Communication • Lack of snow emergency plan • Lack of clear safety assessment • Quality of Service • Check in computers • Hotel • Food and Drink • Comfort • Toilets
- 4. Interview with Irate Customer http://www.youtube.com/watch?v=4fdVkAFgR9w
- 5. Q2. Did this have to happen? • No! But it did... • Weather Warnings • American Airlines cancelled all flights
- 6. News Report from Detroit • Lets hear from Sherry…….. http://www.youtube.com/watch?v=V-8qqZso59g&feature=related
- 7. So why did it happen? • Ground staff not prepared for ground delays
- 8. So why did it happen? • Lack of communication
- 9. So why did it happen? • Role conflict - “Go like hell, get in there in front of everybody”
- 10. So why did it happen? • Misjudgement of safety • Safety and security procedures often governed by law in service industries (Lewis & Clacher 2001)
- 11. How could NWA have approached the crisis differently? • Set customer service benchmarks • Planned for service recovery
- 12. Primary Themes for Service Recovery Tax and Brown (1998) • Outcome Fairness – Customer expectations – Promise resolution – Procedural Fairness • Procedural Fairness – Assume responsibility – Responsiveness – Clear communication • Interactional Fairness – Politeness and respect – Concern and caring attitude – Honesty – Explanation for failure – Effort to resolve – Diffuse anger – Aware of authority Lewis and Clacher (2001) • Communication – Eliminate confusion – Update information regularly • Safety and Security – Understand level of responsibility – Rules and procedures – Explain technical aspects – Rules reduce anxiety – Exercise judgement • Customer Care – Prevent abusive behaviour – Interpersonal and communication skills – Team culture – Sensitive to customer’s needs
- 14. Q3. What should the NWA strategy be now for Service Recovery? • Samaritan Health Services developed framework -‘AAAA’ Action Plan for Service Recovery: – Anticipate – be prepared for backlash, staff ready to deal with crisis – Acknowledge – full responsibility, at time of crisis, reduces conflict – Apologize – regardless of who is at fault, must be sincere – Amends – take action, compensate appropriately Action Plan for Service Recovery
- 15. Benefits of AAAA Action Plan • Management and staff would be aware of the emergency procedure • Prepared for the unexpected - remain calm and professional • Company performance will be improved through customer satisfaction • Organised and professional approach – no loss of customers
- 16. Customers Management “Is it a bird? Is it a plane? (kind of) No!!! Its NWA’s management team!!” - Onlooker Flight 1829 (Quote may not have happened) Customers NWA Management
- 17. Q4. What should be their course of action for the future? Tax and Brown 1998, have identified four practices that aid service recovery. 1) Hiring, training and empowerment 2) Establishing guidelines and standards 3) Providing Easy Access and Effective Response 4) Maintaining Customer and Product Databases
- 18. 1. Hiring, Training & Empowerment
- 19. 2. Establishing Guidelines & Standards To improve procedures and performance of customer service The ‘AAAA’ action plan could be used as a standard guideline as to what action the airline takes in the case of a service failure.
- 20. 3. Providing Easy Access and Effective Responses
- 21. Sample Complaint Form for NWA
- 22. 4. Maintaining Customer & Channel Databases NWA cannot operate effectively as a standalone entity
- 23. Management Implications • Disadvantages Labour Costs of training and educating employees Employee buy-in, if the risk is not obvious • Advantages Customer-orientated investment Customer satisfaction positively impacts bottom-line (Aksoy et al 2008) Minimises risk of damaging brand image
- 24. Discussion:
- 25. Bibliography • Tax, S.S. and S.W. Brown (1998) Recovering and Learning from Service Failure. MIT Sloan Management Review, 40(1): p. 75- 88. • Lewis and Clacher (2001) Service Failure and Recovery in UK theme parks: the employee’s perspective (2001) International Journal of Contemporary Hospitality Management. Volume 13 (4) pp. 166-175 • Askoy et al (2008) The Long-Term Stock Market Valuation of Customer Satisfaction, Journal of Marketing, Vol. 72 July pp 105- 122
Editor's Notes
- Lack of Communication between NWA staff and: NWA business units DWA staff Passengers Competitor Airlines
- Meteorologists gave them weather warnings. They stopped over in Tampa so that they wouldnt fly into the worst of the stno AA cancelled all their flights
- Staff couldnt get to work Runways werent cleared We’re not prepared to deal with ground delays Internal databases between NWA’s various automated crew communication and scheduling systems were overloaded during the snowstorm. This led to the chaos that preceded and followed the service failure.
- Message did not get throught to the Captain – but perhaps he wouldnt have wanted to hear it anyway because his mind was made up to fire ahead
- The issue of role conflict between who had the authority to make the decision to speed up the flight en route to DWA caused the misjudgement of safety from Captain Stabler.
- This option did not have to be taken and was a very risky move considering the adverse weather conditions they were going to be flying into. This was therefore a very poor perception of safety on behalf of both pilots involved. As noted by Lewis and Clacher (2001) in their study on service failure and recovery in UK theme parks; safety and security procedures are often governed by law in service industries. In the case of NWA, passengers lives depended on the decisions made by Captain Stabler and risks should not have been taken that could have put their lives in jeopardy.
- Tax and Brown address the resolution of customer problems based on customers perception of what is fair by assessing outcomes of the service failure, procedural features of the incident, and the interactional treatment they were engaged in. Lewis and Clacher (2001) address the strategy management can take to reduce unsatisfactory service outcomes by resolving customer problems before they escalate.
- Management and staff would be aware of the emergency procedure - would help deal with potential conflict that can arise from unexpected crises Shows to their customers that during a crisis they have remained calm and professional and most importantly were prepared for the unexpected Achieving fairness and customer satisfaction represents a direct approach to improving company performance Management will be looked on very favourably either during or after the crisis by the customers because of their organised and professional approach – no loss of customers