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.

1. FGD TEAM PS121
FERRY|FRISCA|GITA| DWI
Marketing Services
Magister Manajemen, Universitas Indonesia
JetBlue
SERVICE RECOVERY

2. THIS IS PCL TIME !

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. • 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. 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. 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. “High Flying Airlines Melts Down in Ice Storm”
JetBlue

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. 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. JetBlue’s Experience
BLISS SPA FOR KIDS
VALUE
SERVICE
STYLE

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. $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. 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. 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. 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. JetBlue Failure (Reca
1. Late/Slow Response
2. Unavailability of the
Service Quality that
was Promised
3.Employees Communication
and Responsiveness:

17. The Tragedy

18. Questions
How did JetBlue ultimately respond
to this service failure?
How JetBlue Customers Respond to
Service Failures?

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

21. Jet Blue Customer Respons
IRATES

22. 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

23. JetBlue Response: Fixing The
Customer
1. Issuing public
apology
2. Announcing
full refund
Respond Quickly

24. JetBlue Response: Fixing The
Customer
Provide Appropriate
Communication

25. 1. Give a free round trip ticket
2. Relaxed the policies of rebooking
Treat Customers Fairly
JetBlue Response: Fixing The
Customer

26. Cultivate Relationship
with Customers
JetBlue Response: Fixing The
Customer
Regular Live show from T5
(Taylor Swift, Pink, Jamie
Blunt)

27. 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

28. Service Recovery Plan for
JetBlue

29. make
customer
easy to
contact you

30. Lion Air case study
“We make people fly (and die...)”

31. Lion Air Failure - Bali Crash

32. Lion Air Failure

33. 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

34. 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

35. Lion Air Response
1. Explanation to
media
2. Give
compensations to
the victims
3. Adding more
planes to fulfill
customer needs

37. Recommendation
1. Explanation to media
2. Give compensations to the victims
3. Adding more planes to fulfill customer needs

38. 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

39. 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

40. 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

41. 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 .

42. 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

43. 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.

44. THANK YOU