The Effectiveness of Service Marketing in Virgin Atlantic - Case Study Example

Dear, RE: Mumbai to Heathrow It is with sheer amazement that I get to stare at the horrifying assorted items that you encountered during your flight on the fateful day. As a customer you deserve to be angry and irritated at the grueling state of service that was delivered to you in spite of your love for our brand Virgin. I begin by thanking you for being honest and standing out to express your views by being the voice of other customers who are voiceless. It is unfortunate that this is not the first time that you get to experience the horrifying service and to my amazement you still continue to be royal to our brand. This is why your complaint is being treated at a high degree of priority to ensure that we deliver the best and outstanding service to our customers in order to remain competitive in the industry. Just as Richard Branson states, we believe in exceptional service delivery to our customers and the customer is always right when it comes to taste and preference of quality service. You can rest be assured that a thorough investigation on the status of the quality of food being served on airline is currently being investigated to find out the real root cause of the problem that surrounds the kind of reception that you had to endure. There are two key problems that are highlighted from your letter, which are poor on board entertainment and the quality of food or snacks served to our esteemed customers. Richard Branson ensures that our employees undergo extensive training on the type of service they are expected to deliver and their performance expectations are regularly monitored to stay abreast with as the best and most efficient Airline in service delivery. From the pictures that you took as evidence, they are a clear indication that “somebody is sleeping on the job’’ because as an Airline that is not the standard that we have set for the brunches and entertainment. Our policy entails to extend and reach out to our customer needs by ensuring that their needs are met and they are satisfied in order to retain them just like any other business sets its objectives. It’s my assumption that normally makes mistakes but not on purpose. In our Airline for the success and reputation of its quality service we depend highly on the voice and words of customers that will retain brand loyalty. In this regard, on behalf of Richard Branson and the Management we wish to apologize for the poor service delivery offered and in return we are kindly offering to give you a free upper class suite two way return ticket to the destination of your choice among our fleet routes and give us your feedback on our new assorted brunches and on board entertainment that you will find being offered on board that flight. This offer has been made on the assumption that you fly frequently either on business or pleasure and it is has no limiting time factor. We hope that you will continue to fly with us and contribute more by sending us your opinions and comments for the success of service delivery. We are bound to ensure that we go that extra mile to offer customer incentives, be reliable, offer the latest technology, create product awareness and policy, reach out to our steady customers and empower our employees so that they can make decisions that benefit our customers. We however maintain that we are flexible and will try to solve your complaints to the best of our ability and meet your expectations as part of our policy standards. Yours Sincerely Marketing Manager. Research has clearly indicated that service failure can be the fall out of any business if the customer needs and expectations are not met accordingly. With the expansion and growth of the technology communication marketing has become more of a challenge and any slight mistake can bring the Company tumbling down to liquidation. Attention needs to be paid to the customer and strategies laid down to encounter the problem amicably. This literature will explain the components of service strategy recoveries used when service failure occurs and how to turn an angry customer into an evangelist. McCole, 2004 highlighted that the most important strategy in marketing is to ensure that a Company retains the existing customers and at the same time woes new ones to increase the market share and sustainability of the firm. Simons and Kraus went on further to suggest that once first-class service delivery is offered there is a high probability that customer satisfaction is achieved respectively. A positive correlation exists between repurchase intention and customer satisfaction which leads to increased future profitability. (Simons & Kraus, 2005) However studies have shown that mistakes, errors, failures and complaints are common in the process of handling customers. ( Babakus et al. 2003). Mack et al. ( 2000) emphasized that approximately 50% of business customer base are lost for a period of every five years while gaining the same number of customers would cost more by almost five times (Kerr 2004). Consequently this is a problem that can run a business out of the market. A Business like the Airline cannot afford to lose potential customers because the word of mouth travels faster that the media communication. One customer can poison approximately ten other influential customers and the number doubles every time reference is made. (Magnini et al., 2004) “Service recovery involves altering the negative attitude of a customer that is dissatisfied and taking action to resolve the problem at stake ’’ ( Miller et al. 2000, p. 388). Service improvement is therefore essential to ensure that customer expectations are met in spite of the policy standards set by the Company. The Airline is no exception when it comes to listening to customer complaints. To date research has not explored extensively on service failure and service recovery strategies in the tourism and hospitality industry however if recommendations and strategies are applied effectively they can help retain customers loyalty. ( Hoffman. et al. 1995) Alexander, 2009 described service failure as when the service provider fails to meet the customers’ expectations. Bill Bryce as a client felt that his expectations were not met and thus service failure is clearly indicated from this current fiasco. The main identified causes of service failure include actions that are not welcome by the customer, lack of response to the customer request by the service provider and poor service delivery. ( Bitner et al.,1990).. bitner et al., 1994 went on further to add that a customer may also behave inappropriately which may be the cause of poor service delivery. However, it is always recommended that the service provider should respond to the customer so that he or she is contended. The outcome may also lead to an improvement on the kind of service being offered once the service provider has identified their short comings and applied corrective action. Literature has outlined a number of ways in which Airlines can successfully apply in order to recover from lost service delivery. They include offering immediate alternative options that meet the customers’ expectations, direct communication the clients who are experience poor service delivery and providing an explanation for the failure. Boshoff et al., (2003) Matilla et. Al., 2005 further argued that an apology is in order for the Customer together with a compensation for either the opportunity lost or inconvenience caused either in tangible, discounts or vouchers. Magnini et. Al.,(2007) advocate that employees who have the first encounter with the customers should be adequately trained on how to deal with service failure efficiently and effectively. For if the flight attendant who served Brian Bryce was practically empowered he or she would have handled the situation adequately. Thus, we it is clearly evident that as an Airline there is failure on the part of the management. There is no defence on this situation because clearly if all systems were in place and everybody was adamant to perform then the costs being incurred for compensation and trying to invest in customer retention would not be the current discussion at present. Magnini et al., 2004, went on to discuss on the content of training needed for service recovery suggesting that employee’s reaction to emotional response of customers’ complaints and enhancing employee satisfaction be part of the topics. Day in day out Airlines handle numerous customer complaints that are brought about by service failures and to recover from this process of failure and minimize customer defections then the relationship between the service provider the customer should be strengthened through relevant training of employees. (Christopher et al., 2002) Once a relationship is broken with a potential client it is forever broken and almost next to impossible to recover from the encountered experience but as the saying goes once bitten twice shy. John Mehrmann, 2010 suggested ways on how to deal with an angry customer such as listening to emotion without emotion because it might not be completely possible to solve the distress brought about to the customer but it is essential to acknowledge the fact that there was failure on the part of the Company or firm. Secondly assume that the customer has a right to be irate and at the same time evaluate the extent of the damage done. People have different tastes and preferences and perhaps the food offered may have been music to the ears of another passenger on the same flight. But it is important to respect a customer’s choice. Perhaps the customer may be angry for having made a wrong decision just like it happens when you walk into a restaurant and order food only for you to realize when it is presented to you that you made the wrong choice of food. The customer may also be experiencing previous bad experience and this last encounter only heightens the betrayal. Therefore the service provider should listen carefully to the customer and identify the cause of emotion expressed. If the response to the customer is made through word of mouth or telephone then speaking softly to the customer will gladly calm him or her because they expressed their problem to you for consideration. Thirdly is by reiterating the priorities that you have heard from the customers’ opinion. Fourth is that regardless of who did not perform his duty well that resulted to failure; the service provider should own the problem. The fact that you own the problem gives the customer confidence that his complaint is being handled and they stop feeling frustrated. Since the customer is unaware of the policies and restrictions surrounding the Company operations assurance made that a resolution is being made will put the customer on guard that assistance is being sort. Fifth is to place the customer first and the problem second. Sixth is to triage the problem by analyzing in detail the problem and setting a corrective measure to avoid a repeat and duplication of the problem. A long term measure should be sort to bring an end to the situation and demonstrate confidence to the resolution set. Attention should be focused more on trying to impress the irate customer and customer royalty would be retained. If possible follow – up either through phone call or other means of communication will be warmly welcomed as the customer realizes that the problem has been solved eventually. A post card sent to the customer will also demonstrate individual attention at the same time wooing new customers. Carla Heaton et al., (2011) Perhaps the most distinguished theory is of turning a satisfied customer into an evangelist. It’s possible to create a corporate culture that clearly identifies a customer and the employees to be the evangelists of a business. There is nothing as scary in this world as being on the media today described as the worst or most poor performing firm. Perhaps it would even be better to be involved in a cult of the customer that is composed of advocates who spread word around the world on how your Company offers great service. It is possible to determine the culture of a Company and disseminate the same through training new employees on the resultant expected from the rooted culture. It is important to note that the cult in this context describes a system which consists of shared interest, experience and belief. For instance, if the employees are share the same belief and interests of a firm they would all be drivers to success and achievement of the desired Company goals. No one single Organization has been known to be perfect without detractors that set the Company backwards. Companies rely heavily on customers and the experiences that their customers encounter pave way for decisions made in future. Every contact made by the employee to the client or customer plays a major role in creating the customer experience as well as the service offered. For instance, Bill Bryce does not get any consolation from the flight attendant who went further to serve a brunch that falls short of the set policy standard. The problem may be traced back to the supplier of the food who may have failed to inspect the quality of output produced in a hurry to make a big buck. This is how businesses loose big time jobs for failure to provide consistent quality products and service. Every business should have a unit for quality inspection to ensure products or quality service effectiveness and efficiency is adhered to. The situation at Virgin airline is as a result of failure by the responsible supervisors to ensure that whatever is offered to the customers ensures that they are retained. The employees have also failed on their part in communicating with the customers because once they realized that the sort of food available was pathetic he or she should not have gone ahead to serve the meal. The employees are also tasked to ensure comfortability of their customers and therefore they would have noted the poor reception from the entertainment and notified the necessary team to deal with the problem and alternative source of remedy identified consequently. In order to create genuine customer relationships the Organization requires improving the customer’s quality of first class service and not by merely stating in words but by application. The truly customers are known to do more than buying the service for you but by marketing the experience to other known potential customers. Richard et., al (2011) A moment of Magic is a way to strategize and retain that one customer who has lost faith in your brand. This is a positive attitude that the customer has with the employees that they feel more at ease to express and voice their message in regards to service offered. It is a wow moment that the employee solves a problem before even it can reach the management. The experience is above average because the employee goes an extra mile to compensate the client that is dissatisfied. For instance, referring back to the Bill Bryce, the minute the flight attendant realized that the brunch offered was pathetic, he or she would have requested to offer the customer a better alternative that is available on the Airline menu. Henry, (2011) The customer may require being amazed for you as a service provider to be engaged in the customer cult of central experience. The efforts are truly not a waste of time because the reward is much greater than in singlehandedly investing in one product. The effort created to impress and amaze the customer ensures delivery of the unpaid legions that act as representatives or advocates to the firm. Most of the Company’s under estimate the level of shooting too low to provide an experience to a customer but amazing the client is truly a wonderful experience that is based on a whole different level of perspective. For instance, walker information conducted a survey recently which indicated that the wireless communication industry “loyalty leaders” did outperform the laggards by a whopping 173% in a record period of three years. The key word in creating a cult of customer amazement is consistency. Once the Airline creates consistency in the type of food being offered then the customer is assured that at no one time will the product and service fall below the set parameters. (Henry, 2011) The customer may also be under going through the cult on uncertainty such that they have encountered numerous bad experiences in the past that every time they have an encounter with your service they are anxious to know what this time round is going to happen. Just like the same thing happened to Bill Bryce, from the desert to the biscuit and finally to the entertainment he was just fed up and dreaded to get out of the Air plane. Such customers like Bill who are discontented offer no royalty in return and if the problem goes unnoticed the customer experience is distinguished despite numerous good services offered prior to previous travel flights. The cult of alignment requires that the service provider proves beyond reasonable doubt that the set standards by the Management are met and fulfilled. The expectations of the customer in regard to the brand are specific according to how the Company has illustrated and distinguished themselves from others. They want proof that what has been promised is what that is delivered. The other strategy is cult of ownership whereby the customer experiences confidence and loyalty in the organization. This is the beginning of repeat business and likely expansion of the business. Even as an individual you have encountered a similar position when you became an evangelist after having a wow encounter of a service delivered to you. A satisfied customer is not a loyal customer and hence the whole experience of amazement is essential to stay afloat and on guard. To maintain customer amazement, the whole organization should be engaged in dealing with customers both internal and external. As the saying goes there is no there is no confidence without consistency and there is no loyalty without confidence. As an employee, the flight attendant would have acted as the force within. By this we mean, offering an alternative as a solution. There are many at time when Airlines are forced to cancel their flights due to hitches such as the weather or possible Airline threats. In such situations the Air ticket officers have an opportunity to offer alternative flights which are a solution to the problem. Perhaps we can contend that the Airline attendants training is not conclusive of all the necessary information and knowledge required to be impacted on the staff or on the other hand the staff have fallen short of delivering excellent service thus disciplinary action should be taken against them. The voice of many is another way in which the staff can intervene in a situation and mend a wrong that is already done. For instance, the Airline may lose luggage of a customer and all the staff on duty should ensure that they turn everything upside down to locate the lost items and apologize to the customer once found. Henry,( 2011) Adams theory in regard to customer satisfaction has been revisited several times in the last 43 years and Ross (1992) also adopted the study of service recovery. The theory of equity has been borrowed to address the discipline of management when it comes to marketing and predicting the relationship that exists between customer satisfaction and equity perception. The theory sets a standard on the complexity and simplicity of measuring customer satisfaction and the benefits that are derived from the guide. Some of the indicators that an organization may identify as being the drivers to uncertainty cult are having inconsistent service, poor internal communication, low customer retention, lack of information on the firms brand vision and mission, lack of trust among the staff, communication breakdown between the management and staff, lack of employee recognition in times of success, low staff morale as a result of wrong job designation and lack of training for the staff. If the staffs’ performance is not reviewed consistently then the employees don’t feel appreciated and part of the team. They eventually do not feel that they any obligation to act independently and possess an attitude of indifference to handle the customers problems that may arise. Lewis, 2004 carried out a study in the hospitality industry showed that alarmingly local airlines that were recorded to have encountered customer complaints did nothing to try and recover the lost glory. Approximately only 40% of the hotels offered service recovery. Alternatively a research conducted by De Meyer on Airlines service recovery had 68% of the respondents stating that they were dissatisfied by the Airlines lack of response to service failure while majority of the respondents expected the Airline to apologize and give an explanation of the root cause or poor service delivery. This is similar to Mc Cann, 2004 findings on the percentage number of hotels that responded to service recovery. In the same research 66% responded that their relationship with the Airline deteriorated and affected even their friends whom they had earlier recommended to use the brand. While on the other hand the respondents’ whom complaints received individual attention their relationship with the Airline was enhanced and strengthened. Respondents who were dissatisfied discontinued flying with the Airline, while those who have enjoyed customer recovery strategies continued to fly with the Airline more often. Wirtz, 2004 et. al supports this sentiments from his findings that post recovery efforts are more rewarding in any business practice. Virgin states that safety, security and consistent delivery of the basics are the foundation of everything we do. The success of its performance requires focusing on driving efficiency and effectiveness to the business and leisure market. It is currently the second largest best long haul airline and was awarded during 2009 by Sunday times travel magazine. It also scooped the world travel award in 2009 as the leading Translantic Airline. As is the Airline policy to offer exceptional service, the customers are at the heart of its success and the superb training is second only to the Airline ability to attract fantastic people. Virgin Atlantic became the first airline to be accredited by the chartered management institute for providing their own Diplomas and certificate qualifications through training their own staff in 2005. It is by this concept we are left wondering whether the essential topics are inclusive on how the employees should handle any customer complaint raised by the customers as is the case with Bill Bryce. Since it was launched 25 years ago, Virgin Atlantic has become the second largest serving worlds’ major cities. It has achieved all the rewards and reputation through continuous product innovation and quality development. Through hard work, commitment and determination Richard Branson continues to smile all the way to the bank because of his success. The management will determine how inclusive the training program is to accommodate application of theory to the highest level and ensuring the employees are best equipped to meet the customers’ demands. The flight engineers are also answerable to the reception of in-flight entertainment since Virgin boasts of offering ‘Best In – flight Entertainment – international’ by Zagat in their 2010 Airline Survey. The survey incorporated over 8000 travel professionals and frequent fliers. With the increase in competition by other airlines every customer service provider is under pressure to build exceptional customer service delivery and customer retention. Virgin,(2011) In order to revive the service delivery Virgin Atlantic envisions surprising, satisfying and delighting their customers and thus Bill Bryce requires to be compensated for him to receive the magic touch. The policy ensures that the customer service expectations and how the organisation will continue to deliver on the promises that they make for a better future. Though it has got a fully equipped training rig for safety with the latest technology, a restaurant, café bar offering snacks and specialty coffees, the airline is still not perfect and errors on service delivery are inevitable. The professional team, who ensure that each flight is worth the experience, will ensure that after diagnosis of Bill Bryce complaint each customer will have an enjoyable experience. Marketing is not merely a matter of trying to impress the customers but living by the words. Therefore since the Airline has stated that they offer exceptional service failure to which the customer should be compensated for any short comings. Virgin, (2011) Service recovery strategies in a study carried out by the Department in Applied economics Taiwan on the service offered to hotel guests in Orlando towards service recovery strategies found out that there are seven dimensions of recovery namely correction, apologies, redirection, compensation, exceptional treatment, explanation and did nothing. The behavioral intentions of customers were weighted through price sensitivity, repeat purchase and referral. The findings concluded that behavioral intentions were as a result of significant service failure. In relation to the hospitality industry correctional action is a contributing factor towards the change of a customer’s perception as a result of failed service delivery. In conclusion virgin Atlantic should learn from the whole experience and using the threat or weakness as it may be described as an opportunity to capitalize on improving their services by offering quality service delivery. Mistakes do always happen when dealing with different set of people who have different backgrounds and the best solution in solving a crisis is first of all listening to the customer slowly and patiently, owning the mistake or problem, identifying the problem and solving it through long term measures. Even for a wrong product sold to a customer today Companies always compensate the individual either with another item or opportunity to choose a different sort of item. Therefore the same case applies for Bill Bryce who has the right to ensure a free flight on first class and receive individual attention throughout the flight. It should be noted that customers like to be contacted by the owner of the Company or a management representative in order to win the customers confidence. It would be unethical to compensate the customer in monetary terms because there were other people on board the flight who could raise concern on why they should not also be compensated despite having not made any complain and tabled evidence. Just as Virgin Atlantic believes that the customer is always right, so should any other business wishing to be among the best in British record. Finally the employees should be empowered such that they have the ability to break rules and fix a problem as the customer waits. Though sometimes the customers’ problem may not be our fault but the customer may be having a bad day, still their problems should make us create an opportunity by demonstrating how much we care for their satisfaction and comfortability. References Airgatesolutions. Retrieved on 15th August 2011 from http://www.airgatesolutions.com/index.php?option=com_content&view=article&id=176&Itemid Alexander, E. C. (2009). Consumer reactions to unethical service recovery. 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