Even in an industry where expecting the worst is a pre-requisite for operational efficiency, February 14, 2007 was awkward for JetBlue Airways. In what became known as the Valentine’s Day Massacre, an ice storm in the eastern US grounded almost 1,200 flights and stranded tens of thousands of the low-cost carrier’s passengers.
The three-day snafu could have been disastrous for JetBlue’s bottom line. Yet by the third quarter of 2007, JetBlue’s revenues were up 22%, defying analyst expectations. In Q1 2011, with much of the industry in the doldrums, the company remained profitable.
While operational adjustments and executive reshuffles have been credited with avoiding a repeat of 2007, JetBlue’s untarnished reputation is also down to the way it has used the internet, and social media in particular. Founder and then CEO David Neeleman took to YouTube within hours of the ice storm to issue a straight-to-camera apology. An email to ticketholders has become a case study in corporate apologies. The result was no significant downturn in bookings.
JetBlue doesn’t just use social media for damage limitation. It was one of the first major brands to join Twitter, and now has more than 1.6 million followers. It uses the service to directly interact with customers. Morgan Johnson, JetBlue’s Manager of Corporate Communications, says: “When travellers have more knowledge, it helps them keep calm. It can change the dynamics in the airport, and that makes all our lives a lot easier.” On a separate Twitter feed, it offers last-minute deals to fill empty seats: a form of Web 2.0 inventory management.
Airlines’ customer service is helping them reduce attrition and cut costs, and others could learn from their experiences. A study by Genesys concluded that airlines lose around US$650m annually in avoidable churn through poor customer service. Consumer markets companies lose almost twice as much.
Airlines have learned that customers are happy to blog or share positive experiences – and they’re taking the fight to them via social media. Delta Airlines monitors Twitter and often steps in when passengers tweet their dissatisfaction. Malaysia Airlines lets passengers book through Facebook and move seats to be near their friends. KLM’s ‘Surprise’ campaign saw the airline present travellers waiting to board their flights with the perfect small gift, having researched their interests using social media. The result of these ‘random acts of kindness’: one million views of KLM’s official Twitter feed in a month.
“If it’s made easy for customers to have issues resolved online, they’d rather do that than spend 10 minutes on an automated phone service,” says Tom Skoog, a KPMG retail services partner in the US firm. “It also enables companies to serve customers more holistically – anybody from the CEO down can answer.” But he cautions that clear ownership is vital: the web is often seen as a marketing concern, but customer service is an operational issue.
Web-based initiatives needn’t be expensive: at the same time as being lauded online, JetBlue was quietly shedding customer service costs. It now allows reservation agents to work from home, eliminating call centers. Neeleman, who is now CEO of Azul Brazilian Airlines, even served as a flight attendant – though, like social media engagement, that had more to do with being seen to care than scrimping on cabin crew.