Is there a CRM lesson in JetBlue's snafu?

Usually a model for customer service, JetBlue got burned by a winter ice storm and discovered its limitations. Should all businesses be considering a customer bill of rights?

JetBlue Airways acted quickly yesterday to try to salvage its reputation for customer service in the wake of a Valentine's Day storm that left its planes stranded on icy runways and its customers fuming.

Yesterday, the company's founder and CEO, David Neeleman, made a vow to customers that this wouldn't happen again, outlining a "customer's bill of rights" in a video posted on JetBlue's Web site.

The Forest Hills, N.Y.-based company wasn't quite so nimble last week when snow and extreme temperatures grounded planes at its terminal at New York's John F. Kennedy Airport. Some passengers were left stranded inside airplanes sitting on the tarmac for 10 hours, hundreds of flights were cancelled and the reservation system was overwhelmed by questions and customer complaints. Additionally, pilots and flight crews who offered to help were stuck in locations where they weren't needed.

"Obviously this is the most difficult time in our history," Neeleman said. "As with all challenges, when [one comes] your way, you can ignore it and pretend it's an aberration or you can do something internally to make sure that never happens again. The events that transpired last week, and the way they transpired, will never happen again."

Under the customer bill of rights, JetBlue pledged to compensate customers based on the length of time their flights are delayed with vouchers ranging from $25 up to the full price of the ticket. If the company cancels a flight within 12 hours of departure, customers can ask for a full refund or a voucher, according to the Associated Press, which received a copy of the rights program. Neelman did not detail the specifics of the program in his online video.

Neeleman's message was an important first step, according to Paul Greenberg, president of the Manassas, Va.-based 56 Group LLC, a CRM consultancy.

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"Regardless of the flak that JetBlue got, they are genuinely contrite, and their proactive attempt to create a JetBlue-specific passenger bill of rights is a good sign," Greenberg wrote in an email. "Not because they are going to retroactively compensate the customers that were stranded for their pains or provide other benefits to those passengers who have had bad experiences, but because they are institutionalizing the solution that is likely to best work for their customers in advance of future problems."

The fiasco did take its toll on the low-cost airline, which is well-known for its customer service. JetBlue has received praise from some CRM analysts for its approach to customer service. It has also earned CRM accolades for its early use of at-home agents, allowing service representatives to take reservations at home. JetBlue operates a call center in Salt Lake City, Utah, with 1,500 agents working from their homes, backed up by 500 people in a central location. However, in the wake of the storm and the subsequent cancellations, the center was overwhelmed. Customers were left on hold for up to an hour, because the company didn't have enough phone lines to handle the volume, according to reports.

It was a significant blow to JetBlue's reputation for service.

"One bad experience washes away a lot of good ones, and in this case, we are seeing what airline CRM is like," Denis Pombriant, managing principal with Stoughton, Mass.-based Beagle Research, wrote in an email. "In airline CRM you get all the buzzwords and none of the follow-through."

In the travel business, the limited number of carriers on specific routes makes airlines compete on price. They are unafraid of losing customers, according to Pombriant, making customer attrition a revolving door.

"It is precisely because the system can be gamed that the normal rules of free markets do not apply, and for that reason whether you call it a customer's bill of rights or government regulation, some form of counterbalance must be applied to re-level the playing field," he wrote. "This business of keeping people on a plane parked on a runway for 10 hours is felonious."

Yet, according to Greenberg, JetBlue's cache of customer service served it well last week.

"It was quite noticeable that because of the past history of great customer service from JetBlue and their generally excellent relationships with their customers, that their customers were willing to cut them a significantly larger portion of slack than would be likely for any other airline," he wrote. "That past practice of treating your customers like humans, not like transactions, goes a long way in good will and loyalty -- which was severely tested."

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