Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Term Paper:
It is clear that when busy employees and weary travelers are treated with respect, dignity and courtesy, it can make a profound difference in how the company operates and is perceived by customers - and potential customers -- and this is how JetBlue has succeeded in adding value through these simple but important techniques. "These guiding principles have been extended to all levels of JetBlue's operation, internally and externally, and have created unique customer appeal" (Bodouva & Bodouva, 2004, p. 317). These guiding principles have also been the driving forces behind JetBlue's efforts to gain additional market share by adding value from both the customer and employee perspective.
The impact of these foregoing value-added approaches has been significant and they have paid major dividends for JetBlue to date:
JetBlue has made significant progress in establishing a strong brand that helps to distinguish it from the competition. It seeks to be identified as a safe, reliable, low-fare airline that is highly focused on customer service, provides an enjoyable flying experience, and is constantly evolving; and the company's value-added services include:
An uncommon amount of legroom;
Free satellite TV at every seat;
Airplane yoga cards (there cards are stored right next to the "barf bags" and inflight instructions on how to survive a crash, and provide JetBlue passengers with some useful stretching exercises to alleviate the tedium, monotony and cramped muscles that can result from enforced sedentary activities, but cautions that the exercises may make "you look like a real weirdo to your fellow passengers" (Bodouva & Bodouva, 2004, p. 320);
No discount seats;
"TrueBlue" loyalty program
All fares are sold one-way (no Saturday-night layover required);
Online booking discounts;
High-quality service; and Safety (Bodouva & Bodouva, 2004, p. 319).
It is equally clear that Neeleman took what he learned during his tenure at Southwest seriously and has since fine-tuned what was best at Southwest to his own unique operations at JetBlue. In this regard, Ashby and Miles (2002) note that when the September 2001 terrorist attacks rocked the rest of the airline industry in 2001, Southwest Airlines' employees "quickly aligned, accepting pay cuts to avoid layoffs and maintain operations and low fares despite low loads. While United and other airlines reduced flights, Southwest kept a full schedule, winning customer and employee loyalty along with market share" (p. 108).
Unlike JetBlue, though, Southwest has spurned the strictly high-tech approach to ticketing embraced by JetBlue (although they remain in the vanguard of paperless travel) by ensuring there are humans involved in the reservation process. In this regard and in sharp contrast to JetBlue, Southwest uses an unsophisticated approach to this customer service function. Although Southwest has invested in CRM packages to track and analyze customer data, it also determined that the benefits of this approach failed to outweigh the associated costs. For example, Southwest specifically rejects multi-channel tools that are being used by other airlines such as JetBlue such as email and online reservations system menus because "they are too impersonal and take the cost out of customer contacts, but also the quality. It is aware of the fact that, by following this strategy, it ignores one of the basic principles of CRM, i.e. that the customer should be able to reach the company how and when he wants" (De Pelsmacker & Kitchen, 2004, p. 124).
These authors also suggest that JetBlue's investment in some features that contribute to its "making flying enjoyable" initiatives are prohibitively expensive and these resources should be invested elsewhere. For example, De Pelsmacker and Kitchen emphasize that investing in high-tech systems does not make good business sense if it does not adequately meet customer service requirements: "This technologically conservative point-of-view may be in line with the strategy of high-touch personal service; it may also become a fundamental weakness in a competitive environment in which high-tech customer contacts are saving money that is reinvested in extra value for the customer (JetBlue, another low-cost airline, puts a satellite TV in each passenger's back seat)" (emphasis added) (De Pelsmacker & Kitchen, 2004, p. 124).
These concerns do not seem to have affected the company's zeal for using high-tech approaches to help add value for their passengers, though. For example, in response to heightened concerns over aircraft security following the terrorist attacks of September 11, 2001, JetBlue installed onboard systems with two to four cameras outside the cockpit door and in the rear galley that were designed to warn the crew of possible hijack and air rage incidents (Couldry & Mccarthy, 2004). In addition, "Placards placed on cockpit doors advise passengers that they may be under video surveillance, assuaging fears of privacy violation (although the American Civil Liberties Union thinks otherwise)" (Couldry & Mccarthy, 2004, p. 245).
As noted above, like JetBlue, Southwest has also been a pioneer in paperless ticketing and online ticket selling, and it is well aware of the fact that in the future it will have to support its high-tech systems with customer service features that will make these efforts worthwhile for all concerned. Although every company is unique, of course, it would appear that JetBlue is continuing to use what is best from its competitors to help them achieve their organizational goals, and it is not surprising that many of these initiatives are reflective of Neeleman's experiences at Southwest.
Among other initiatives, Southwest continues to investigate how to better serve its customers and how to use the information it does collect in order to provide its customers with the level of service they have come to expect from this major carrier. In this regard, although employees cannot be compelled to be friendly or courteous to others, it is possible to emphasize to them what impact these kinds of value-added services can have on a company's financial performance - and therefore their jobs. For example, Southwest "also wants to develop CRM systems that enable sharing information between service counters and call centres. After all, Southwest do not pitch customer service just for the sake of the customer, but for the sake of the company. Good service is not meant to make customers smile, but to make customers come back" (emphasis added) (De Pelsmacker & Kitchen, 2004, p. 124).
From this perspective, JetBlue has been engaged in what De Pelsmacker and Kitchen term, "relationship marketing": "Relationship marketing is marketing seen as relationships, networks and interaction. It is aimed at establishing long-term win-win relationships with customers. In approaching a potential customer, relationship marketing has the ambition to climb the loyalty ladder: from prospect over first-time customer, to client, supporter, advocate and partner" (De Pelsmacker & Kitchen, 2004, p. 124). This is a tall order, of course, but JetBlue appears to have achieved its stated goals through this approach and it has in fact gained a loyal following. The company is not content, though, to simply rest on its customer service laurels: "Although JetBlue is experiencing enormous success, the company is not complacent. It realizes that it is only as good as its last arrival. That is why the company focuses on every aspect of the customer experience, from the first interaction of making a reservation to the last of ensuring on-time delivery of the final piece of baggage at the flight's destination" (Bodouva & Bodouva, 2004, p. 325).
The research showed that David Neeleman learned a lot from Herb Kelleher, and he did not have to pay Herb a dime for the privilege. In fact, it would seem reasonable to suggest that Neeleman took what he considered best about Southwest and added some "common sense" features to his business plan for JetBlue that have proven highly successful in attracting and keeping passengers. Indeed, JetBlue's operation costs are about half of those of other carriers such as U.S. Airways (De Neufville, 2006), and it continues to grow its business by following the golden rules established by Neeleman early on. In fact, the case study by Bodouva and Bodouva sounds more like promotional advertising copy that was sponsored by JetBlue than an objective analysis, but the research confirmed much of what these authors reported about the company. In the final analysis, it is also reasonable to suggest that the business model embraced by JetBlue will be studied by other, similarly situated carriers and the resulting competition will force the company to continue to identify other low-cost but effective techniques for adding value wherever possible.
Ashby, M.D., & Miles, S.A. (2002). Leaders talk leadership: Top executives speak their minds. New York: Oxford University Press.
Couldry, N., &…[continue]
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