Sales Promotion Techniques used by JETBLUE - Research Paper Example

?- Sales Promotion Techniques used by JETBLUE Overview: JetBlue was founded in 1999 by David Neeleman. It is an American airline with the approach of providing low-cost air travel just like its competitor, Southwest Airlines. It was among those few American airlines that recorded a profit following the September 11, 2001 attacks. JetBlue not only offers the service of air travel at cheap rates but it also tries to set itself apart from its competitors by offering a product that is superior than the rest at prices people can afford. With the objective of providing superior in-flight experience the airline was the first to offer all the passengers with a personalized service. Each seat had its own flat-screen monitor installed at the back and it allowed passengers to tune into many of DirecTV channels at the same cost. Due to its focus on providing the best service to passengers, the airline became synonymous to customer service. The airline was given a four-star rating by SKYTRAX (The World’s 4-Star Airlines| official SKYTRAX Airline Ranking). In 2007 a violent snowstorm led to a collapse of JetBlue’s and passengers were made to wait for many hours to wait for clearance to take-off. Many of the flights were even cancelled. This hurt JetBlue’s status badly, however, the airline was able to deal with the crisis effectively and rebuild its image among its customers. JetBlue’s success should be credited to its belief of “flying people” rather than “flying airplanes”. Low Air-fare & Superior Customer Service: The aviation industry is very competitive and most of the airlines have a lot of trouble in creating brand loyalty among the customers. Passengers usually search for available flights usually on sites such as orbitz.com, travelocity.com and expedia.com. The passengers, most of the times, end up buying a ticket on the flight that provides them with the cheapest fare (Lambrano). Hence airline companies have to come up with travel deals with cheaper rates than their competitors. They also need to reduce their costs and at the same time provide great customer service to passengers in order to attract more and more customers. JetBlue was able to do just that. When David Neeleman founded JetBlue, the idea was to provide passengers with a low-cost airline without compromising on the in-flight experience. When customers travel with JetBlue not only will they be able to reduce their fare costs by as much as 65% but they would also enjoy a great travel experience as JetBlue offers wider seats, more legroom, and more overhead storage space than any other airline in its class and, with 24 channels of live in-flight television, passengers would not have to miss on any of their shows while travelling (JetBlue Airways, The First 'Mega Start-Up' Unveils Launch Plans 1999). Through these measures JetBlue was able to increase the demand for their service as more and more passengers were attracted to flying with JetBlue. Not only were the low fares an incentive to travel for the customers, but the great in-flight experience provided by the airline offered an added incentive for customers to travel with JetBlue. Hence by lowering its cost the airline was able to offer lower rates for its flight fares as compared to its competitors. Coupled with that, it was embedded in the DNA of the airline to provide a high quality in-flight experience to their passengers better than the rest. As a result JetBlue was able to create some brand loyalty among its customers who kept utilizing JetBlue’s service while travelling because of the very personalized in-flight experience that they received. Eventually these customers would also recommend JetBlue to their friends or colleagues. Hence the role of word of mouth was a big help to increase the airline’s sales. When first-time travellers of JetBlue were asked from where they had heard about the airline more than 70% answered that they had heard about it from a friend (Carton 2001). Customer service plays an important role in improving JetBlue sales. It is a conventional sales technique to boost the airline sales through word of mouth. The airline lays emphasis on their notion ‘to bring the humanity back to airline travel’. The idea is not just to offer low-cost airfares as compared to the bigger airline but the JetBlue staff tries to nurture a friendly environment and provide a superior service. Customer service is a major feature of staff training at JetBlue. When asked about the one major bad point about a big carrier Gareth Edmondson-Jones, vice president of Corporate Communications at JetBlue, responded: “Indifference. Indifference directed at the passenger. It's easy to feel that you've lost your dignity flying the big guys. You are a number and a boarding pass. It's like a cattle call.... Everyone's trying to shave three or four cents off a passenger. Passenger expectations are so low that when you help them with their baggage, it's a real shock from what they're used to. It's amazing that the level of expectations for airlines in general and especially for discount entrants is so low that if you set your standards high, it's easy to create a reputation for customer service.” The staff at JetBlue is pleasant, helpful and stylish. The airline also offers added value to their service in the form of roomy seats, personal TV for each seat and snacks instead of food (Rusch 2001). Due to their excellent customer service passengers are swayed to travel with the airline again and again and many of these customers then encourage their friends, family and other acquaintances to travel with JetBlue too. By successfully adopting techniques that offer ‘better than the rest’ customer experience to their customers, JetBlue is able to promote its sales. The importance of good customer relations can be emphasized from the crisis JetBlue suffered in 2007. In February 2007, the eastern side of North America was hit by a violent winter storm, Valentine’s Day Storm, which resulted in heavy snowfall throughout the region. This led to the airline’s system getting collapsed. Phone lines were down, the site did not have information and crew members did not have access to important information. Due to this system collapse many flights were cancelled and passengers had to face a lot of problems while boarding flights. Customers were infuriated. Many passengers were stuck in airports and a few stuck on the tarmac for as much as six hours (Dilworth 2007). There was a lack of trust in JetBlue at that time and the airline, whose whole brand was built around customer experience, could have collapsed. However JetBlue managed the crisis effectively by issuing a Customer’s Bill of Rights and their CEO David Neeleman formally apologized in a video address. The Customer’s Bill of Rights promised to notify the passengers of any delay prior to departure, any cancellations or diversion of flights and their cause. The Bill of Rights further promised the affected passengers that they would be compensated for their losses or re-accommodated on any future flight without any charge if they chose to do so. In case the flight gets cancelled for some reason the customer will receive a voucher, in the amount paid to the airline, valid for any future travel. In case of delays the compensations (or rather the rewards) were even more impressive. Passengers who faced a delay of 1 to 2 hours would receive a $25 voucher, delay of 2 to 4 hours a voucher worth $50 for future travel, 4 to 6 hours a one-way trip and more than 6 hours delay was worth a round-trip voucher. According to David Bushy, JetBlue’s vice president of operations: “We are the airline of the people and we messed up and didn't come through. But we see this failure as an opportunity to reconnect with our customers and provide even better service than we did before (Dilworth 2007).” This response to the crisis faced by the airline not only helped save the company’s brand image but the compensations provided by JetBlue to its customers helped restore passenger’s trust in the airline. Since then JetBlue has come a long way and is serving its passengers with the same high quality service that it has maintained since its inception. So far it can be seen that JetBlue takes a great deal of pride in maintaining its customer relations so that customers are attracted again and again to the airline’s services. This is another tactic used to enhance the sales of the airline. Various Other Marketing Strategies: One of JetBlue’s ad campaign, The Flyer’s Group, was operated through Facebook and other conventional mediums of advertising such as gift guides and subway ads. The idea behind this campaign was to feature superficial products that help provide more of a kind of “JetBlue like experience” while passengers were travelling airlines other than JetBlue. For example a gift from the gift is a “knee jockey”. About the knee jockey, advertising manager for JetBlue, Kirsten Frazell quipped that it acts like a ‘bra for the knees.’ The knee jockey would hold the passenger’s knees up so that they do not touch the seat in their front. This product aimed to tell the customers that JetBlue has a lot of legroom. Apart from numerous products in the gifts guide (about 35000) many of the fans on the Facebook page gave their suggestions. One such suggestion from a fan, Nimrod Priell, was: “Ear protectors for guarding your ears from the dirt on the re-used earphones handed out on non-JetBlue flights! The hilarious part of the campaign is when the people try to buy the products online, a beautiful pop up come up displaying the following text: “Thanks for shopping at The Flyers Collection. Due to unexpected demand, this product has sold out. If you’d rather just book a more confortable flight, simple Go Jetting.” Another suggestion by a second fan Kelly Hansen was: “how about a guy with a satellite dish strapped to his head trying to get inflight DirecTV. Maybe he could have a small flat screen TV strapped around his waist too. (sold separately of course)” This campaign was an ideal model for companies who wanted to communicate online with their customers and how they could create brand loyalty (Lambrano). This was one technique employed by JetBlue to boost sales. Not only were they able to engage their customers through social networking but they were also able to create a want for their service. Passengers were reminded through the gift guide the kind of service they were missing if they travelled in an airline other than JetBlue. In this way many customers were attracted to JetBlue services. Such an initiative was necessary since in the 2007 winter storm the customer trust had been shaken and there was a lot of negative publicity for JetBlue all over the media. In order to counter that negative publicity and be able to communicate and respond to its millions of customers the airline needed an outlet, provided by Facebook and various other social networking sites. JetBlue also created a promotional account on the social networking site Twitter by the name of JetBlueCheeps. This account is separate from the main account and it tweets specific sales and other kinds of deals for their customers. Sales are tweeted every Tuesday and it has information regarding the time of take-off and the number of seats available with the fare price of the flight. The tweet is linked to the main JetBlue’s website so that customers can directly jump to the place from where they can book their ticket. These sales tweets are targeted at passengers who travel on-the-go as the flight sales details are on short notice. As a result the tweets need to be user friendly and can be accessed even through smartphones for the convenience of the customers (JetBlue tweets latest promotions and lowest deals, Clever 2010). The JetBlueCheeps account has 240168 followers. Their other Twitter account JetBlue has 1653480 followers. This account is used to answer any queries, respond to customer complaints, tweeting of sales promotions, offering travel tips and crowdsourcing ideas. JetBlue also has a page on YouTube that features news events, entertainment/humor and interviews. The company used the services of YouTube to issue a public apology through their CEO, David Neeleman, at the time of the crisis in 2007; the violent winter storm that caused passengers to be stranded on airplanes. JetBlue also created a humorous website, welcomebigwigs.com, which makes fun of CEOs who have lost their private jets due to the ongoing economic crisis (Jet Blue Social Media Snapshot). To promote their new air route, JetBlue hired well known YouTube personalities and bloggers to travel BetaBlue, the company’s only plane with wireless internet access (Mueller 2009). One campaign that amazed many people including those at JetBlue was JetBlue’s “All You Can Jet” campaign. The promotion allowed passengers to travel all they wanted among all the 56 cities where the airline operated from 8th September to 8th October for $599. The response of this promotion was unexpected. The demand was so high that it was extremely difficult for JetBlue to meet the demand. The campaign was debuted on 12th August however just a week later the airline decided that the demand for this campaign was too high and they suspended sales of the unlimited-flight pass. Sebastian White, JetBlue’s spokesman, explained the reason why the airline decided to suspend the sales the campaign’s passes before the deadline. He said that sales for the offer had already exceeded JetBlue’s expectations and they wanted to make sure that they did not want to sell excessive passes that it would become a challenge for the airline to manage the high demand from its passengers and it may lead to another crisis. Henry Harteveldt, airline analyst at Forrester Research, lauded JetBlue’s promotion “All You Can Jet” by saying: “I'm totally surprised by the amount of attention the promotion has earned. It's an extremely creative promotion, though, and creativity is something sadly absent from airline marketing and promotions. It's the kind of offer that makes you sharply inhale when you see it — it's so good that you almost can't believe it (Mutzabaugh 2009).” It was decided that customers would be able to buy passes till the deadline day or till the passes lasted but the number of passes in stock finished well before the deadline. The promotion was so popular that it was grabbing headlines even one week after being unveiled (Mutzabaugh 2009). This goes about to show the creative marketing ploy used by JetBlue to boost it sales. A more recent and most current campaign started by JetBlue in October 2010 was “You Above All”. This statement is actually a restatement that describes everything JetBlue stands for and everything the airline has tried to achieve since it was founded. The campaign is aimed at showing the commitment of JetBlue of putting the people first. “You Above All” was designed to shed light on the airline’s most important competitive differences and on the crew’s efforts to provide the best customer experience. Marty St. George, senior vice president of Marketing and Commercial Strategy, had this to say about the current campaign: “In so many ways, this exciting new marketing campaign speaks to the core of who we are as a brand. You Above All is authentic. It's transparent. It's understandable. Quite simply, it's very JetBlue. As we move into our second decade of service, You Above All underscores our commitment to always put people first, to bring humanity back to air travel. That's a message we can all relate to, whether we take to the skies once a year or once a week (JetBlue Launches New Advertising and Marketing Campaign: You Above All(TM) 2010).” The above statement reflected the DNA of JetBlue. The airline was committed to ‘flying people’ when it was created and even after more than a decade in business the commitment remained the same. The campaign featured an all-inclusive mix of media including online, social media, in-flight, print and out-of-home components. The online part of the campaign features a series of hidden camera scenarios called “Ground Rules”. The online videos point out the weaknesses of the aviation industry by bringing into limelight the policies, procedures and services of other airlines. The videos show real people in real situations who are deprived of things they have come to expect such as a full can of soda from a street vendor, legroom in a taxi and free luggage storage in a taxi. The campaign uses simple, colorful and illustrations to show travellers JetBlue’s key products, services and destinations. A key element of the campaign’s creative part was “I-People”, an illustration of the airline’s emphasis on humanity, used to provide JetBlue with an identifiable look different from the rest of its competitor airlines. Another part of the campaign was focused on utilizing the “Monster Media” technology which the airline would take advantage of in New York, Boston and Los Angeles. The technology made use of interactive billboards that responded to the movements of passengers that passed by these billboards and created an animation that quite literally placed the customer in JetBlue’s ads (JetBlue Launches New Advertising and Marketing Campaign: You Above All(TM) 2010). JetBlue is credited with having a passenger centric mindset that enables it to provide the best possible customer service to its passengers. The idea is to make the passenger travel in the airline one and then provide him with ‘better than the rest’ customer experience so that the customer cannot resist the temptation of flying again with JetBlue. The big airlines can compete with JetBlue on cheap fares however what sets apart JetBlue from the rest is the specialized and rather personalized service provided by them. So customers just keep coming to JetBlue for more and more of their excellent customer service. As fare prices are low passengers who are in search for low-cost flights are automatically attracted to the airline, so the focus is on passengers who could pay more however they are pleased to pay less without having to compromise on the quality of service. Another one of JetBlue’s technique to boost sales is the TrueBlue promotion. Under this offer passengers will be able to accumulate JetBlue points each time they fly with JetBlue. The number of points varies. For every dollar spent on airfare the customer would earn 3 points. In case the flight is booked online the customer will earn 6 points for each dollar spent and if the passengers use the JetBlue Card they will earn an extra 2 points. There are even points that can be earned if the passenger travels with their pet (and uses JetPaws service to earn an extra 300 points). These points will not expire as long as the customer uses the JetBlue card or travels JetBlue once in a period of twelve months. Passengers are able to earn bonus points for points accumulated. For every 3000 points JetBlue provides 500 bonus points. Points can be redeemed by travelling with JetBlue on any flight at any time. A one-way flight award starts at 5000 points and a round-trip is worth 10000 points (TrueBlue). This promotion is a good way to keep the customers in touch with JetBlue frequently. As passengers would want to avail the benefits of these points they will be encouraged to avail the airline’s services again and again. This would not only improve the communication between customers and JetBlue but it would also further help to boost the sales of the airline. Hence JetBlue’s TrueBlue is another great marketing ploy that helps to improve the sales of the airline in the aviation industry. JetBlue frequently provides passengers with discounts on fares. Although it is a low-cost airline so its airfares are cheap however it offers these discounts so that passengers regularly travel with their airline. The intention is to create some sort of brand loyalty among the passengers. Since JetBlue provides its passengers with low airfares for its flights without compromising on the quality of service provided hence customers are attracted to the airline leading to boosted sales for JetBlue. Conclusion: Although the competition is fierce in the aviation industry with little room for airlines to create loyal customers JetBlue was able to fashion out a niche and is serving them effectively. Even after the 9/11 attacks (the aviation industry suffered a lot) with many big airline companies recording losses in the immediate years and some companies even being declared bankrupt, JetBlue was able to keep steady sales and steady profits since its inception more than a decade ago. Between 2001 and 2004 while 10 of the biggest US airliners recorded a loss of nearly $28.5 billion, JetBlue was able to record profits of approximately $250 million (Gunther 2009). The reason for these profits is not just cost control but the large amount of sales that take place and generate enormous amounts of revenue for the airline. The success of JetBlue’s sales can rightly be given to the creative marketing strategy to spur demand for the airline’s service and JetBlue’s commitment to providing high quality customer service to its passengers. As was in the DNA of the airline at the time of its inception, that is, to ‘fly people’ rather than ‘flying airlines’, almost 10 years since then JetBlue has still stuck with the same policies and its DNA is embedded in each and every employee of the airline. Everyone shares the same vision and their goals are aligned so that the airline works as a single cohort. Although in the early years JetBlue focused more on its services such as spacious leather seats with more legroom, superior customer service and newer planes by placing full page ads in newspapers, the focus, as in the latter years through the “You Above All” campaign, remained on the passengers with phrases such as ‘we like you too’. JetBlue has also been very successful at fully utilizing the social media and internet as a whole. The focus is not only to promote JetBlue or announce sales promotion but the airline’s focus is to communicate with its customers: respond to their complaints, appreciate their suggestions and provide advice on air travel. Due to these reasons the airline has been able to create a market niche and it has been so successful at generating steady profits through its sales promotion strategies. References: Carton, Sean. (2001). Learning From JetBlue to Stay Out of the Red. Retrieved from http://www.clickz.com/clickz/column/1701913/learning-from-jetblue-stay-out-red Dilworth, Dianna. (2007). Jet Blue takes loyalty to heart. Retrieved from http://www.dmnews.com/jet-blue-takes-loyalty-to-heart/article/94660/ Gunther, Marc. (2009). Nothing blue about JetBlue. Retrieved from http://money.cnn.com/2009/09/03/news/companies/jetblue_airways_airline.fortune/index.htm Jet Blue Social Media Snapshot. Retrieved from http://customerengagement.com/next/content/jet-blue-social-media-snapshot JetBlue Airways, The First 'Mega Start-Up' Unveils Launch Plans. (1999). Retrieved from http://www.jetblue.com/about/pressroom/pressreleases/pr.asp?year=1999&news=07141999_startup JetBlue Launches New Advertising and Marketing Campaign: You Above All(TM). (2010). Retrieved from http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=1482885 JetBlue tweets latest promotions and lowest deals, Clever. (2010). Retrieved from http://simpliflying.com/clever/2010/jetblue-cheeps-clever/ Lambrano, Librado. Successful Strategies of JetBlue in Online Marketing. Retrieved from http://syndikomm.com/blog/2010/01/successful-strategies-of-jetblue-in-online-marketing/ Mueller, Dominik. (2009). JetBlue’s YouTube Marketing Strategy. Retrieved from http://www.dmueller.com/2009/06/18/domain-names-domains/jetblues-youtube-marketing-strategy/ Mutzabaugh, Ben. (2009). JetBlue’s ‘All You Can Jet’ pass sells out. Retrieved from http://www.usatoday.com/travel/flights/2009-08-19-jetblue-suspends-all-you-can-jet-sale_N.htm Rusch, Robin. D. (2001). Blue Skies Ahead. Retrieved from http://www.brandchannel.com/features_effect.asp?id=41 TrueBlue. Retrieved from https://trueblue.jetblue.com/web/trueblue/home;jsessionid=A705ABF5F5A0E95FC7BFD45C60CC8659.l2 Read More