tom muldowney - northwest airlines and the snow storm - dealing with customers in times of crisis

Download Tom Muldowney - Northwest Airlines and the Snow Storm - Dealing with Customers in Times of Crisis

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Here is an evaluation of the Northwest Airlines case study and how the company could have dealt with their crisis better to ensure their customers remained satisfied. This was part of my MBS Digital Marketing in DCU, Dublin, Ireland.

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  • 1. Northwest Airlines and the DetroitSnowstormMG 527 Services and Tourism MarketingTom Muldowney 59212790Eimear Murphy- 59210952Rosemary Clancy - 59212099Caroline Mullen - 59213267

2. Q1. How bad was the situation?Service failures can often be categorized by faults that fall into the following criteriapeople, policies, processes and the actual service. (Tax and Brown 1998) 1. People Aggression Impatience Hostility Rude 2. Policy Cell Phones Alcohol consumption Smoking 3. 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 4. Interview with Irate Customerhttp://www.youtube.com/watch?v=4fdVkAFgR9w 5. Q2. Did this have to happen? No! But it did... Weather Warnings American Airlines cancelled all flights 6. News Report from Detroit Lets hear from Sherry.. http://www.youtube.com/watch?v=V-8qqZso59g&feature=related 7. So why did it happen? Ground staff not prepared for ground delays 8. So why did it happen? Lack of communication 9. So why did it happen? Role conflict - Go like hell, get in there in front ofeverybody 10. So why did it happen? Misjudgement of safety Safety and security procedures often governed bylaw in service industries (Lewis & Clacher 2001) 11. How could NWA have approached the crisis differently? Set customer service benchmarks Planned for service recovery 12. Primary Themes for Service RecoveryTax and Brown (1998) Lewis and Clacher (2001) Outcome Fairness Communication Customer expectations Eliminate confusion Promise resolution Update information regularly Procedural Fairness Safety and Security Procedural Fairness Understand level of responsibility Assume responsibility Responsiveness Rules and procedures Clear communication Explain technical aspects Rules reduce anxiety Exercise judgement Interactional Fairness Politeness and respect Concern and caring attitude Customer Care Honesty Prevent abusive behaviour Explanation for failure Interpersonal and communication Effort to resolve skills Diffuse anger Team culture Aware of authority Sensitive to customers needs 13. Ignorance is Bliss.http://www.youtube.com/watch?v=yBNooZFqDss&feature=related 14. Q3. What should the NWA strategy be now for Service Recovery? Samaritan Health Services developed framework -AAAAAction 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 15. 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 16. Is it a bird? Is it a plane? (kind of) No!!! Its NWAs management team!!- Onlooker Flight 1829 (Quote may not have happened) CustomersManagement Customers NWA Management 17. 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 standards3) Providing Easy Access and Effective Response4) Maintaining Customer and Product Databases 18. 1. Hiring, Training & Empowerment 19. 2. Establishing Guidelines & StandardsTo improve procedures and performance ofcustomer 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. 20. 3. Providing Easy Access and Effective Responses 21. Sample Complaint Form for NWA 22. 4. Maintaining Customer & Channel DatabasesNWA cannot operate effectively as a standaloneentity 23. Management Implications DisadvantagesLabour Costs of training and educating employeesEmployee 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 24. Discussion: 25. Bibliography Tax, S.S. and S.W. Brown (1998) Recovering and Learning fromService Failure. MIT Sloan Management Review, 40(1): p. 75-88. Lewis and Clacher (2001) Service Failure and Recovery in UKtheme parks: the employees perspective (2001) InternationalJournal of Contemporary Hospitality Management. Volume 13(4) pp. 166-175 Askoy et al (2008) The Long-Term Stock Market Valuation ofCustomer Satisfaction, Journal of Marketing, Vol. 72 July pp105- 122

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