Returning to the U.S. on Sunday after a week’s vacation in Switzerland, I waited for over half an hour for the luggage handlers at JFK airport to deliver my skis to the appropriate conveyor belt. Little did I know how lucky I was. As this article in the New York Times confirms, my wait could have been a lot worse. An eight-and-a-half hour flight time is bad enough, but more than six hours on the tarmac because of an ice storm? That’s purgatory.
Until the events of last week, JetBlue had been a poster child for passenger airlines in the United States, leading the industry in customer satisfaction, according to J.D. Power and Associates. In large part, the company’s success was the result of the great customer experience they provided: comfy new planes, leather seats, and in-flight TV entertainment. Combined with good on-time performance, these factors helped JetBlue achieve profitability and growth.
Like Google and Starbucks, JetBlue is often cited as a brand that became successful through word of mouth rather than traditional marketing. What these disparate companies had in common (at least until last week) was the great brand experience they offered. JetBlue’s marketing helped people share their experiences with the brand, making good use of word of mouth, as well as personal testimonies and recommendations.
Then JetBlue made a bad decision last week in dealing with the Valentine’s Day ice storm. Seeming to believe that they could keep their planes in the air when other carriers cancelled flights, they subjected their passengers to a fate even worse than being stranded at an airport. At JFK, passengers on nine flights were stuck for upwards of six hours inside of ice-shrouded planes on the tarmac with no food and no explanation of what was going on.
David Stempler, president of the Washington-based member-supported Air Travelers Association, suggested that JetBlue tried too hard.
“Their heart was in the right place,” said Stempler, “but their head was not.”
When the flights failed to get off the ground, JetBlue’s system for getting flight crews in place to resume service was inadequate. This prevented JetBlue from getting back to normal until the following week. In total, over 1000 flights were cancelled.
The interesting thing is that JetBlue was not the only airline to suffer problems. Delays to American Airlines and Delta flights were nearly as long. But then, maybe JetBlue’s customers simply expected better? If so, the delay struck at the heart of the company’s success. Forget leather seats and TVs—what people really want is on-time flights at a cheap price.
Faced with a crisis, the company is now trying to mitigate the potential impact. The airline’s CEO, David Neeleman, has taken responsibility for the excessive delays, admitting that systems were not adequate. The company has announced a customer bill of rights and offered compensation which could cost the company $30 million. But will this be enough to recover the goodwill of travelers?
Neeleman is confident that it will be. “Is our good will gone? No, it isn’t. We fly 30 million people a year. Ten thousand were affected by this.”
True, but the media, both traditional and consumer-generated, made sure that most of JetBlue’s 30 million flying customers know what happened. Blog posts referring to JetBlue spiked on Thursday last week and peaked yesterday at a level six times higher than the pre-storm level.
With many potential travelers sensitized to JetBlue’s stumble, the company needs to act fast and get contingency plans in place to ensure that nothing similar happens again. The first time around the problems might be judged accidental, but the second time, they will be attributed to carelessness.
What do you think? Will JetBlue suffer from the fiasco of the last week or ride out the storm of customer discontent unscathed?
Tags: Nigel Hollis, JetBlue, brand experience
(23 votes, average: 3.22 out of 5)
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February 22nd, 2007 at 12:05 am
The key actions required, I feel, in managing crises of this kind are
1. Senior management / CEO’s immediate engagement with the customers
2. Addressing the negative ‘perceptions’ rather than pointing out ‘facts’, which even if true, may not be too helpful
3. Taking steps to ensure such events do not occur again / having an action plan if they do
I believe in this case, the fact that JetBlue admitted its failure & more importantly apologized thru a message from its CEO, would help it to emerge from this crisis without too much damage to its reputation. Coincidentally, I was reading the other day about how United tackled a similar crisis in 2000 due to rising fuel costs. Its chairman featured in a TV ad campaign himself, in which he apologized to customers. Apparently, this worked wonders for the brand (attitudinal measures in tracking showed an upward trend after this)
While I was in Beijing in 05, a crisis befell Nestle China, and I was comparing the above with how badly they managed that situation. Food inspectors found more than permissible levels of iodine in their infant milk powder, which could harm babies. Mothers were aghast, but instead of assuaging their concerns immediately, Nestle did nothing initially and then tried to address the ‘facts’ and explain away the issue. A grave error, which they paid for, with sales getting hit.
An aside to this debate, which is currently raging in India, is who is better when it comes to starring in ads which are created to tackle crises – CEO or celebrity. The genesis of this debate was the recent ‘pesticides-in-colas’ controversy, which Pepsi addressed by using their CEO, and Coke their celebrity endorser. The general consensus at the end of it seemed to be that Pepsi scored as their CEO came across as being far more ‘credible’, despite Coke’s celebrity endorser being seen as a highly trustworthy individual. Your views ?
February 22nd, 2007 at 5:37 am
“The first time around the problems might be judged accidental, but the second time, they will be attributed to carelessness.”
Cadbury in the press for again contaminating confectionary - you have to question this time though there intentions by leaving it upto the retailer to notify customers of the potential risks
http://www.marketingweek.co.uk/item/55102/254/260/3
http://www.cadbury.co.uk/EN/CTB2003/information/product_recall
Jet Blues intentions positive – you have to question Cadbury in this instance, especially with food standards and hygiene in the UK being a hot topic at the moment.
February 22nd, 2007 at 8:04 am
Hi Praveen and Trevor, thanks for your comments.
Praveen, I agree with your points and also that JetBlue has moved fast to remedy the situation. While it remains to see how their bill of rights is received, the fact that they are using YouTube and other outlets to get the word out proves that they are some of the savvier marketers out there. The ‘feel’ of the video is good, even if the promise that this “will never happen again” does set them up for future problems.
We can contrast the response of jetBlue management with the response of Cadbury (thanks Trevor) and Nestle. Why are these companies slow to respond when something goes wrong? My belief is that there are three factors at play:
1) Poor internal escalation procedures
2) Concern over the bottom line
3) Concern over possible litigation
But, as you will read in an upcoming POV on the subject, I believe it is a case of pay now or pay later. Delay just makes things worse and undermines the value of the brand.
With regard to the Cadbury case highlighted by Trevor, they better hope there are no ill-effects from the contamination, because if there even worse publicity will surely follow, particularly in light of the issues last year. I am sure the proximity of the Easter Egg season was a large factor in their thinking but the downside risk seems pretty high to me.
Has there been any attempt to get the word out other than the press release?
February 22nd, 2007 at 8:16 am
Praveen,
I thought I would address your point about CEO versus Celebrity separately. The question, “Which is better under a crisis situation?” is really interesting.
I would suggest that Pepsi correctly anticipated that the authenticity of their CEO going on record would be far more convincing and credible than a celebrity. Why? Because people know that a) celebrities are all about glitz, glamour and fame, and, b) that they are paid to promote the brand. Both of these factors undermine the value of the celebrity when attempting to reassure people. In times of crisis and contoversy people look for reassurance from someone they can believe in and trust.
Cheers, Nigel