MG 527 Services and Tourism MarketingTom Muldowney – 59212790Eimear Murphy- 59210952Rosemary Clancy - 59212099Caroline Mullen - 59213267

Northwest Airlines and the Detroit Snowstorm

Q1. How bad was the situation?

1. PeopleAggression Impatience Hostility Rude

2. PolicyCell PhonesAlcohol consumptionSmoking

“Service failures can often be categorized by faults that fall into the following criteria people, policies, processes and the actual service”. (Tax and Brown 1998)

How bad was the situation?

• Processes• Lack of Communication • Lack of snow emergency plan • Lack of clear safety assessment

• Quality of Service • Check in computers• Hotel • Food and Drink • Comfort • Toilets

Interview with Irate Customer

http://www.youtube.com/watch?v=4fdVkAFgR9w

Q2. Did this have to happen?

• No! But it did... • Weather Warnings • American Airlines cancelled all flights

News Report from Detroit

• Lets hear from Sherry……..

http://www.youtube.com/watch?v=V-8qqZso59g&feature=related

So why did it happen?

• Ground staff not prepared for ground delays

So why did it happen?

• Lack of communication

So why did it happen?

• Role conflict - “Go like hell, get in there in front of everybody”

So why did it happen?

• Misjudgement of safety• Safety and security procedures often governed by

law in service industries (Lewis & Clacher 2001)

How could NWA have approached the crisis differently?

• Set customer service benchmarks

• Planned for service recovery

Primary Themes for Service Recovery

Tax and Brown (1998) • Outcome Fairness

– Customer expectations– Promise resolution– Procedural Fairness

• Procedural Fairness– Assume responsibility– Responsiveness– Clear communication

• Interactional Fairness– Politeness and respect– Concern and caring attitude– Honesty– Explanation for failure– Effort to resolve – Diffuse anger– Aware of authority

Lewis and Clacher (2001)• Communication

– Eliminate confusion– Update information regularly

• Safety and Security– Understand level of responsibility– Rules and procedures– Explain technical aspects– Rules reduce anxiety– Exercise judgement

• Customer Care– Prevent abusive behaviour– Interpersonal and communication skills– Team culture – Sensitive to customer’s needs

Ignorance is Bliss….

http://www.youtube.com/watch?v=yBNooZFqDss&feature=related

Q3. What should the NWA strategy be now for Service Recovery?

• Samaritan Health Services developed framework -‘AAAA’ Action Plan for Service Recovery:

– Anticipate – be prepared for backlash, staff ready to deal with crisis– Acknowledge – full responsibility, at time of crisis, reduces conflict– Apologize – regardless of who is at fault, must be sincere– Amends – take action, compensate appropriately

Action Plan for Service Recovery

Benefits of AAAA Action Plan

• Management and staff would be aware of the emergency procedure

• Prepared for the unexpected - remain calm and professional

• Company performance will be improved through customer satisfaction

• Organised and professional approach – no loss of customers

Customers Management

“Is it a bird? Is it a plane? (kind of) No!!! Its NWA’s management team!!”- Onlooker Flight 1829

(Quote may not have happened)

Customers NWA Management

Q4. What should be their course of action for the future?

Tax and Brown 1998, have identified four practices that

aid service recovery. 1) Hiring, training and empowerment2) Establishing guidelines and standards 3) Providing Easy Access and Effective Response 4) Maintaining Customer and Product Databases

1. Hiring, Training & Empowerment

2. Establishing Guidelines & Standards

To improve procedures and performance of customer service

The ‘AAAA’ action plan could be used as a standard guideline as to what action the

airline takes in the case of a service failure.

3. Providing Easy Access and Effective Responses

Sample Complaint Form for NWA

4. Maintaining Customer & Channel Databases

NWA cannot operate effectively as a standalone entity

Management Implications

• DisadvantagesLabour Costs of training and educating employees Employee buy-in, if the risk is not obvious

• AdvantagesCustomer-orientated investmentCustomer satisfaction positively impacts bottom-line

(Aksoy et al 2008) Minimises risk of damaging brand image

Discussion:

Bibliography

• Tax, S.S. and S.W. Brown (1998) Recovering and Learning from Service Failure. MIT Sloan Management Review, 40(1): p. 75-88.

• Lewis and Clacher (2001) Service Failure and Recovery in UK theme parks: the employee’s perspective (2001) International Journal of Contemporary Hospitality Management. Volume 13 (4) pp. 166-175

• Askoy et al (2008) The Long-Term Stock Market Valuation of Customer Satisfaction, Journal of Marketing, Vol. 72 July pp 105- 122