JetBlue Service Failure Business Proposal

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JetBlue

1c) JetBlue struggled through the events in the case to manage its capacity to align with the demand. The airline service is perishable, such that when flights are unable to fly, that reduces the total capacity in the system. The nature of flight also makes it difficult to make up that capacity loss later -- if there are 30 seats left on a flight to Little Rock, that does not help make up for a capacity shortage of 15 customers on a flight to Orlando. This is where the service failure escalated for JetBlue. With a lack of excess capacity in aircraft, pilots and crew, JetBlue found itself having to pre-cancel flights to give it the opportunity to restore capacity and demand equilibrium.

JetBlue also struggled with the integrated communication mix. The company in particular had problems managing the public relations side of the business. While it has a consistent advertising message, it was unable to effectively deal with the public relations nightmare that the Valentine's Day storm caused. When faced with customers who were mounting organized, vocal social media campaigns, JetBlue cracked. The CEO was unable to deal with the problems that the company had created for itself and only made matters worse. As a result, JetBlue found its customer service reputation -- to that point stellar -- damaged.

The service failure in New York was thankfully not related to pricing. JetBlue has, throughout its history, been able to price appropriately such that it was able to deliver a high level of customer experience relative to price. The result is that the company was able to grow quickly. Thus to this point, JetBlue has performed well in aligning its price with the quality level. The financial data shows that the company has been able to increase its profits steadily over the past several years, even when the other airlines had much higher volatility in their profits.

2a.

It is recommended that JetBlue should address the service failure and potential of future service failures by establishing a proper process to handle any type of weather emergency and to mitigate the risk of other service failures. There were a number of problems that were identified. First, the company put passengers on planes when it was fairly evident that they would not be able to take off, thereby exposing more customers to this problem than needed. Second, the company had communications issues whereby it was fairly obvious that there was no communication. People in other areas of the company had no idea what was going on in New York. The workers in New York, for their part were overwhelmed and because of the lack of communications channels they were unable to get help from other parts of the company. Thus, the customers were often unable to find someone who could help, or who even knew what was going on. Communication is important in a crisis and it generally failed here.

The information systems were identified as another issue, in that these systems were generally ill-equipped to facilitate communication, so some of the communication adjustments need to happen at the IT level.

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But perhaps more importantly, there needs to be specific people in charge when such situations arise, because having people in charge allows for better communication, better deployment of resources and ultimately a faster ability to resolve issues.

The marketing message is another area where there can and should be improvement, because JetBlue was unable to live up to the promises that it was making to its customers. This was a storm, so it affected all airlines, but only Jet Blue had the major black mark on its customer service reputation, because it had promised to be different than other airlines, and wasn't in this crisis. The marketing communication needs to make promises to the customers that the company is actually capable of keeping.

2b.

JetBlue needs to not only have a better feedback system but it needs to take such feedback more seriously. The crisis here in part occurred because customers affected were able to leverage social media and essentially control the dialogue with the company. This was a negative factor for JetBlue, especially when it failed to show due respect for the situation that the customers were in. The company had made its name on treating customers with respect, so it became a bigger issue than it needed to be, if only the company had taken the consumer feedback more seriously from the outset.

So the first step here is that JetBlue needs to ensure that it has a lot of feedback mechanisms, so that customers can reach the company directly and get resolution. This way, JetBlue has a much better chance of controlling the dialogue and managing the media reaction to its service failures. JetBlue also needs to recognize that the customer is a stakeholder -- an important one at that -- and as a result it should be certain to address customer concerns right away.

Ownership and action are key takeaways because it became apparent that while many employees were aware of the problems, none were empowered to actually solve the problem, so that service failure ended up being much worse than it needed to be. Further, Neeleman just made matters worse when he disrespected the blogger. The CEO needs to set the tone for behavior in the organization, which means that the CEO has to prioritize the customer feedback, ensure that there are enough feedback mechanisms and show that customer feedback is taken seriously.

2c.

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