Consumers Products And Services Value Perception

 

Value is defined in the pricing literature as the trade-off between customers' perceptions of benefits received and sacrifices incurred (e.g. Leszinski and Marn, 1997). Monroe (1990) and Gale (1994) cited quality as customers' primary benefit. Monroe (1990) proposed that the sacrifice component exerts the greater influence on buyers' value perceptions. All noted that the role of price is complex and customers do not buy solely on the basis of low price. The context, customers' access to information and past associations also affect price perceptions and consequently customers' value determination (Monroe, 1990).

Other definitions of value have a broader interpretation of sacrifice, in which non-monetary factors such as time and effort are included (e.g. Butz and Goodstein, 1996; Carothers and Adams, 1991; GroÈnroos, 1997; Kotler, 1996; Naumann, 1995; Treacy and Wiersema, 1995; Zeithaml, 1988). Sacrifice is again defined from the customer's perspective, as emphasised by Doyle's (1989, p. 78) definition of value as ``not what the producer puts in, but what the consumer gets out''.

Many authors have acknowledged the difficulties involved in defining value (e.g. Piercy and Morgan, 1997; Woodruff, 1997). These stem from the subjectivity of value (Hardy, 1987), variations between customers (WikstroÈm and Normann, 1994), within customers (Parasuraman, 1997), between cultures (Assael, 1995), in different situations (Ravald and GroÈnroos, 1996), pre- and post-purchase (Gardial et al., 1994), and between tangible and intangible offerings (Naumann, 1995).

This is compounded by customer value being a dynamic concept that evolves over time (Jaworski and Kohli, 1993). Indeed it has been claimed that customer value is inherently ambiguous (Naumann, 1995) and that value could be considered “one of the most overused and misused terms in marketing and pricing today” (Leszinski andMarn, 1997, p. 99).

In an attempt to consolidate the diverse definitions, Woodruff (1997, p. 142) proposed: ``Customer value is a customer's perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitate (or block) achieving the customer's goals and purposes in use situations''. Although the multiple contexts, tasks and criteria in Woodruff's definition reflect the richness and complexity of the concept, they impede its translation into a measurable operational definition (Parasuraman, 1997).

Most consumers will adopt all of these buying behaviors, but to varying degrees, behaving in different ways according to the type of product they are purchasing and the purchase situation. However each buying behavior group has different triggers in terms of information, support and persuasion.

Marketing communications across the differing buying behavior groups vary enormously. For the brand-focused group, traditional advertising, such as posters, press and TV, will continue to play a part and a key message will be emotional reassurance that they are buying the ‘right' brand. The brand should be dominant in all communications, but especially when presenting the brand in nontraditional media such as the internet.

Brand-focused consumers respond to strongly-branded consumer offers and merchandise via the post - good news for the direct marketing industry. But this group requires constant reassurance and the dissemination of information will be particularly vital should the sector undergo rapid change or suffer some crisis. Maintaining brand trust is critical to this behavior group.

Price-sensitive consumers need to experience value for money at every stage of the buying process. Marketers should build and maintain everyday low-price brand perceptions, and advertising should play a key part in this. Direct communications should be simple, appear inexpensive and emphasise special offers, moneyback deals and price comparisons with competitive brands. And if you want to drive this traditionally less new-media savvy behavior group on to the internet, demonstrate the low prices they can expect to find there. Everybody loves a bargain but none more so than this group. Communications must highlight value, and news of special prices or invitations to events such as special sales evenings will work well.

Feature-savvy consumers are information-hungry and will respond to direct marketing that offers product information such as comparisons with competitors and independent product reviews. Internet sites are ideal for presenting this information.

Independent editorial will carry greater weight than paid-for advertising, so effective public relations will pay dividends.

Call centre personnel must be highly trained and knowledgeable about the brand they are representing. They should be able to answer complex questions and provide comparative details. Brand is least important to these consumers.

Personal interaction is key to influencing the buying behavior of advice-led consumers. Testimonials, access to online chat rooms and online shopping guides will also play their part. Word of mouth will be the best reference, and in this respect, telephone operators will need to be both authoritative and reassuring at the same time. Reassurance can also be conveyed through moneyback guarantees and returns policies, and can help to overcome post-purchase dissonance. It is widely anticipated that these buying behaviors can be applied in different markets, although to varying degrees, and the communications applied ‘tweaked' accordingly.

Higher-level needs approach the status of values, which are critical determinants of behaviour (Baier, 1969). Rokeach (1968) regarded a value as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence'. For Schwartz and Bilsky (1987) values transcend specific situations and one of the most widely accepted value inventory is the Rokeach Value Survey (RVS). The RVS measures 18 instrumental values and the same number of terminal values. Instrumental values are related to preferred modes of conduct such as honesty and friendliness which people know can lead to being accepted by others and to having good relations with others. Instrumental values are thus means to reach a goal. Terminal values are more related to end-state goals such as wisdom, happiness and freedom.

Instrumental values are: ambitious, broad-minded, capable, cheerful, clean, courageous, forgiving, helpful, honest, imaginative, independent, Intellectual, logical, loving, obedient, polite, responsible, self-controlled.

Terminal values are: a comfortable life, an exciting life, a sense of accomplishment, a world at peace, a world of beauty, equality, family security, freedom, happiness, inner harmony, mature love, national security, pleasure, salvation, self-respect, social recognition, true friendship, wisdom.

Vinson and Lamont (1977) devised a model of consumer value systems (fig.1) by arranging values at three different levels and giving a hierarchical arrangement to them.

People are not born with their values. Rather, values are passed from one generation to another; they are learned. Engel (1986) point out that some values are relatively constant while others are subject to change. They propose that the triad of families, religious institutions and school plus early lifetime experiences leads to a model of intergenerational value transmission.

Products and services quality perceptions represent consumer judgment about the superiority of a product or service, which the user-based approaches think is essential in describing quality. Bundles of attributes together represent a certain level of quality, which therefore provide utility to the customer. The benefits are measured through a perceived level of quality (level of working superiority), a bundle of attributes in comparison with the consumer's expectations. Schiffman and Kanuk (2004) stated consumers often judge the quality of a product on the basis of a variety of informational cues that they associate with the product. They also stated that the cues can either be intrinsic or extrinsic. Intrinsic cues are related to the physical characteristics of the product itself, like size, colour, flavour, aroma etc. The extrinsic cues on the other hand are related to elements that are put together with the actual product like packaging, pricing, advertising etc. The perceived quality of products and services is central to the theory that strong brands add value to consumers' purchase evaluations.

Brand loyalty is the ultimate desired outcome of consumer learning. Brand loyalty is the likelihood of positive attitudes and behaviors of consumers towards a particular brand, this could amount to repeat purchase and positive word of mouth. A loyal customer base is an asset for a company and it reduces the need for seeking new customers. It is also a known fact that retaining current customers requires less money and effort than getting new ones. The strongest measure of brand value is the loyalty a company produces among customers.

Because product quality perceptions influence value, efforts of marketers focus on improving product quality in order to enhance perceptions of value, and consequently purchase intentions leading to loyalty.

The most functional and fundamental means of identifying a market is by its systems of needs. By literally seeing the purchase decision maker's problem through the decision maker's eyes, it is quite easy to determine:

what combination of product characteristics represent real value,how to communicate the product for the maximum perception of value, and, once that's done,how likely the respondent will be to buy.

1. Assael, H. (1995), Consumer Behavior and Marketing Action, 5th ed., South-Western College Publishing, Cincinnati, OH;

2. Band, W.A. (1991), Creating Value for Customers, John Wiley & Sons, New York, NY;

3. Bhat, S. and Reddy, S.K. (1998), ``Symbolic and functional positioning of brands'', Journal of Consumer Marketing, Vol. 15 No. 1, pp. 32-43;

4. Brandenburger, A.M. and Stuart, H.W. (1996), ``Value-based business strategy'', Journal of Economics and Management Strategy, Vol. 5 No. 1, pp. 5-24;

5. Butz, H.E. and Goodstein, L.D. (1996), ``Measuring customer value: gaining the strategic advantage'', Organizational Dynamics, Vol. 24, Winter, pp. 63-77;

6. Carothers, G.H. Jr and Adams, M. (1991), ``Competitive advantage through customer value: the role of value-based strategies'', in Stahl, M.J. and Bounds, G.M. (Eds), Competing Globally through Customer Value. The Management of Strategic Suprasystems, Quorum Books, New York, NY;

7. Doyle, P. (1989), ``Building successful brands: the strategic objectives'', Journal of Marketing Management, Vol. 5 No. 1, pp. 77-95;

8. Durgee, J.F., O'Connor, G.C. and Veryzer, R.W. (1996), ``Observations: translating values into product wants'', Journal of Advertising Research, November/December, pp. 90-110;

9. Engel, J.F., Blackwell, R.D. and Miniard, P.W. (1995), Consumer Behavior, 8th ed., The Dryden Press, Fort Worth, TX;

10. Farquhar, P.H. (1994), ``Strategic challenges for branding'', Marketing Management, Vol. 3 No. 2, pp. 8-15;

11. Fournier, S. and Yao, J.L. (1997), ``Reviving brand loyalty: a reconceptualization within the framework of consumer-band relationships'', International Journal of Research in Marketing, Vol. 14, pp. 451-72;

12. Gale, B.Y. (1994), Managing Customer Value. Creating Quality and Service that Customers Can See, The Free Press, New York, NY;

13. Gardial, S.F., Clemons, D.S., Woodruff, R.B., Schumann, D.W. and Burns, M.J. (1994), ``Comparing consumers' recall of prepurchase and postpurchase product evaluation experiences'', Journal of Consumer Research, Vol. 20, March, pp. 548-60;

14. GroÈnroos, C. (1997), ``Value-driven relational marketing: from products to resources and competencies'', Journal of Marketing Management, Vol. 13, pp. 407-19;

15. Hansen, F. (1972), Consumer Choice Behavior: A Cognitive Theory, The Free Press, New York, NY;

16. Keller, K.L. (1998), Strategic Brand Management. Building, Measuring and Managing Brand Equity, Prentice-Hall, Upper Saddle River, NY;

17. Kotler, P. (1996), Marketing Management, 9th ed., Prentice-Hall, Upper Saddle River, NY;

18. Leszinski, R. and Marn, M.V. (1997), ``Setting value, not price'', The McKinsey Quarterly, Vol. 1, pp. 99-115;

19. Levitt, T. (1980), ``Marketing success through differentiation of anything'', Harvard Business Review, January-February, pp. 83-91;

20. Mathur, S.S. and Kenyon, A. (1997), Creating Value, Butterworth-Heinemann, Oxford;

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Sutherland Global Services Is A Financial Corporation Marketing Essay

For any business excellent customer service is the income. Bringing back the customers is the best customer service. And in relation send them away pleased – happy enough to pass encouraging criticism about the business alongside others, who may perhaps then attempt the merchandise or service you recommend for them and in turn into repeat clients. You can offer advancement and cut prices to bring in as many fresh customers as you want, but unless you can search out some of those customers to come back, there will no profit for a long time in your business. If the firm truly wish for having good customer service, all you have to do is make sure that your business constantly does these things:

Respond to the customers’ phone call.

Don’t give the customer promises unless you will fulfil the promise.

Listen to your customers patiently while they are talking and make appropriate responses to show the customers that we are listening.

After listening to the customers’ issue, we have an idea how to deal with complaints.

Be helpful towards the customers even if there are no instant financial gains in it.

If you have any staff, give training to be always supportive or helpful, knowledgeable, and chivalrous.

By taking the extra steps does not mean that you have to tell the customer to search for it, you have to guide them to the right path and wait if they have any queries.

Throw in some additional information about the product that the customer buys.

Following these eight steps, ones business will be known for their good and excellent customer service. The irony of the excellent customer service is that this will increase the number of new customers is the best part. (Ward 2010)

For dealing with the customer service, I have opted Sutherland Global Services for doing the research, as the firm is widely known and personally I was a member of the customer service team in this BPO firm.

Sutherland Global Services is a financial corporation headquartered in Rochester, New York. There are 22,000 employees employed in this business process outsourcing firm and operations in seven countries including India, the Philippines, Canada, Mexico and Bulgaria. Sutherland cherishes their customers or clients as their business companions. They are enthusiastic and keen to provide the highest quality service to the customers and will treat their target and objectives as company’s own. The firm will boost their aggressive benefit by constantly higher than the expectations.

Globalization, expertise promotion, lesser telecommunications expenses, and the adulthood of outsourcing facility providers are motivating companies to influence business process outsourcing (BPO) as a tactical move towards the enhancement of efficiency and taken as a whole functional efficiency. Industries that serve a large number of customers are the most important beneficiaries of a BPO. Because of the physical scenery of the business processes that are mandatory to attain, sustain and retain their customers, companies in these industries are outsourcing a variety of customer-facing and back-office operation.

For more than two decades, Sutherland Global Services has built and managed outsourced operations for 1000 companies’ crossways numerous industries. Over the course of 20 years of experience, Sutherland has urbanized a demonstrated method for supervising outsourced operations that is applied to BPO whereabouts athwart any industry. By sternly clinging to this evolution on each commitment, the company is able to trim down start-up and changeover endangers, accomplish beleaguered objectives more rapidly, and run a more reliable steady-state operation on the clients’ behalf.

Sutherland offers specialized BPO services for the following industries: (i) Retail/e-Retail (ii) Insurance (iii) Mortgage

(iv) Banking/Financial services (v) Healthcare (vi) Telecommunication

(vii) Technology (viii) Energy/Utilities and (ix) Travel and hospitality.

Retail/e-Retail: Retailers function in a globe of tremendous market volatility, cost pressure and supply-chain intricacy. Sutherland supplies incorporated customer-facing and significant back-office support services to a high-speed increasing roll of key leaders in the vend space. Sutherland’s services are geared in the direction of conventional trade, online/e-commerce and direct to customer oriented companies looking for an incorporated resolution. For each client or customer, the firm designed a personalized explanation built just about their explicit needs - together with safety, skill and equipment, procedure, quality and exposure. Leveraging the firm’s field knows how, expertise, processes, and infrastructure, Sutherland helps worldwide retail firms concentrate on end-to-end dare.

Insurance: Sutherland furnishes public and private Insurance companies an end- to-end scheme to perk up their functioning efficiencies and enables them to vie more capably which in turn facilitate them to innovate and generate a eternal aggressive benefit. In particular, Sutherland delivers:

cost lessening and a changeable cost replica

income increases through various allocation channels

go around time upgrading for field force and members/consumers

the aptitude to bring a steady customer skill

Mortgage: Mortgage originators must productively deal with outlay in the phizog of altering technological, operational, and personnel demands. Sutherland’s Mortgage Origination services drastically lesser the risks and expenses linked with a multiplicity of business processes rise above the entire instigation sequence. Sutherland can considerably improve a lender’s output, customer satisfaction, and income generating occasion.

Banking/Financial services: Financial or Banking services companies in each section are beneath strong stress to stay on beneficial. Customer expectations keep on increasing as business leaders features expenditure challenges. Sutherland Global Services suggests a BPO model for contact centre and back-office processes. Delivery options comprise North American aground, work at home, offshore service delivery via the facilities in the Bulgaria, Canada, India, Mexico, Nicaragua, Philippines, United Kingdom and United States.

Healthcare: Generally in customer-focused industries, Health Insurance companies are appraising tactical sourcing alternatives that will consent to them to improved control costs, diminish resource expenditures and get better level of overhaul they deliver to their customers. One way, Health Insurance companies can achieve these objectives is to deem choosy Business Process Outsourcing (BPO) for definite sales, customer service, claims organizational and back-office processing functions.

Technology: Sutherland has about two decades of experience with building and controlling sales, advertising and customer support operations for the technology industry. Sutherland Global is branded and recognized in the industry for knowledge, realm skill and track-record of grades working with some of the most flourishing names in the hi-tech industry.

Energy/Utilities:

Travel and Hospitality: Sutherland understands that travel and hospitality companies’ functions multifaceted organizations with many global business units overseeing separate P&L responsibilities. As business and individual journey experience stable quantity increases, every company faces passionate rivalry to supply astonishing customer service while controlling outlay. Companies must swiftly take action to varying consumer demands, which requires litheness and flexibility in operations, customer relationship management and back office processes.

Telecommunication: It habitually seems hard to locate a business with the aim of more competitive than telecommunications. Service providers are quickly escalating an innovative service skill and insistently entering fresh markets, blurring the lines connecting voice, data, cable, IP and wireless. Exceptional cost and rigid pressure is making it trickier for providers to nurture market share and deal with a healthy profit image.

For numerous telecommunications service providers, outsourcing definite client contact centre and back-office procedure is a reasonable and significant way to stay competitive and nurture their industry. That is why the top telecommunications companies have trusted on Sutherland for more than a decade to experience a variety of aspects of their customer lifecycle management errands.

Sutherland’s has formed for the following types of service providers for outsourcing services for the telecommunications industry. Those are as follows:

• Traditional wire line

• Wireless/mobile

• Cable

• Satellite

• Data network operators

• Internet & online service providers (Sutherland Global Services 2009)

Why Sutherland Global succeeds?

How others make benefit?

How does Sutherland Global make impact on various sectors?

It is very essential for a company to make a good relationship with the customer and the company. This should be the main motto of the company to make a customer happy after getting solved all the issues of the customer. The important factor to set up nonstop or long term achievement is by giving importance to the customers. The main advantage of the company is to deliver quality services to customers and will certainly increase the selling opportunities for a happy customer. By this the company will grow autonomously. Some companies only focus getting new customers and ignore the value of the old customers. They forget that these old customers has helped them the chance to grow. They knew that getting new clients instead of the old ones will be more profitable. But they forget that generating new clients will be more expensive than they are already in the asset. (Customer Service BPO 2008)

Customer service always helps to make an industry more profitable. By keeping the old customers and gaining new ones, brilliant customer service is crucial to any business replica. Human resources professionals must be able to give explanation for the importance of customer service teaching and extract from organization broad support for a complete programme. (Reheer 1999)

The researcher establishes assumption, examines and analyzes the active facts and synthesizes the substantiation into a feasible hypothetical sculpt. Nuisance dealing with objectives, syllabus, course content, desires and style are but a small number of the vital issues that can be determined only through the theoretical or philosophical mode of crisis solving.

Even though a few authors give emphasis to the distinction among science and philosophy, the philosophic process of study follows fundamentally the similar steps as other methods of technical means of solving. The philosophic approach uses systematic facts as the foundation for formulating and test to do research suggestion. (Jerry R. Thomas 2005)

Business process outsourcing or else recognized as BPO is the procedure of leveraging skill vendors in a variety of third worlds or developing countries for doing a career which was on one occasion the dependability of the venture. Or in simple thoughts, it is the method of shifting an internal occupation practice to an outside or external corporation which might have an entirely dissimilar ecological locality. The reassigning of internal business processes, for instance, customer relationship organization, investment & secretarial, human resources and acquisition , to an external service source that improves these processes and administers these functions to an approved service criterion and, classically, at a abridged expenditure.

In general, the processes being outsourcing as division of BPO are backend works like call centres, medical transcription, billing, payroll processing, and data entry and so on. Most of these jobs are outsourced by first world nations like USA and UK to third world nations like India, Philippines, China, Malaysia and some eastern European countries. These nations have a good number of English speaking youth who are given accent and job related training before they are inducted at a salary which is much lesser than what their counterparts in first world nations would require. This allows first world organizations to get advanced profits and offer improved services by lowering the prices and by recruiting more work than they could possibly do. In addition to promoting the first world nations’ economic standard, business process outsourcing has also benefited third world nations by generating much needed jobs.

In the early days, BPO typically consisted of outsourcing processes such as payroll. Then it grew to take in employee reimbursement management. Now it includes a number of functions that are measured "non-core" to the primary business strategy. Now it is common for organizations to outsource fiscal and management processes, human resources functions, accounting and payroll and call centre and customer service performance. These outsourcing deals commonly engross multi-year contracts that can run into hundreds of millions of dollars. Frequently, the people performing the work within for the client firm are transferred and have converted into employees for the service provider. Leading outsourcing service providers in the BPO fields include US companies are Sutherland Global Services, IBM, Accenture, and Hewitt Associates, as well as European and Asian companies Capgemini, Genpact, TCS, Wipro, Infosys and many more and some of which also dominate the IT outsourcing business. (Ritu Thapar. 2010)

Business ethics is fairly ancient as a subject of personage and social apprehension, but it is comparatively newly fangled as an area of social logical analysis. The late 20th century was a deafening instance for business ethics. (Treviño and Weaver 2003)

No access to information: As doing the research, there was any access to information while browsing because of the company policy. The firm will only give access to their company policy only if t helps their employees, agents and trusted third party service providers. (Privacy Policy, 2010)

Lack of knowledge: It could be difficult completing the coursework with no knowledge about the sector or subject you have chosen.

Resistance in companies and people for sharing knowledge

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Jetblue Entered The American Airline Services Industry Marketing Essay

Based on a highly differentiated service concept and competitive price point, JetBlue entered the American airline services industry in 1988 and quickly gained customers and began accumulating industry awards. The concept of having first class amenities in coach cabins, and have direct routes to America’s most popular cities caught on. In 2003 JetBlue was named the Best US Airline by the upscale magazine Conde Naste Traveler in a reader poll. In 2005 JetBlue received the FAA Diamond Certificate of Excellence Award, and later than year introduced fleet-wide in-flight entertainment to all 36 channels of DIRECTV.

In 2007 JetBlue was recognized by the industry guide OAG as being the best low cost/no frills airline. Despite all of these awards however the company suffered a major set-back in February, 2007 when due to scheduling and optimization of routes, a JetBlue flight sat for five hours on the tarmac at New York’s La Guardia Airport (Wade, 2007). Enraged, the passengers were calling 911 from the plane to get off, and yet JetBlue refused to move out of the take-off line due to an ice storm (Waite, 2007). February 14, 2007 will always be remembered as the day JetBlue started an airline passenger revolution, as since that day much legislation has been passed to protect flyer’s rights (Wade, 2007) (Waite, 2007).

JetBlue has worked to recover from this customer service and PR disaster, putting into place state-of-the-art analytics applications that measure customer sentiment and satisfaction. JetBlue has extensively modified its service chain and service operations as a result, with the aim of significantly increasing customer satisfaction over the long-term (Jeppsen, 2010).. From that low point in February, 2007 to today, JetBlue has worked diligently to turn the service experience into a core differentiator of their company (Wade, 2007).

Along the way the airline has hit plenty of turbulence as it has strived to overcome the systemic problems that contributed to the incidents in February, 2007 as well. The intent of this paper is to analyze how JetBlue used service marketing, supported by analytics and customer service measurement methodologies SERVQUAL to increase their customer satisfaction effectiveness as other airlines have in the past(Parasuraman, Zeithaml, Berry, 1991).

JetBlue now realizes that it is the customer experience, not necessarily the operational focus of how it services and returns planes for flights from its operations teams, which matters most (Braff, DeVine, 2009). Also being cognizant of customer expectations in the context of service marketing and choosing to cancel the February 14th, 2007 flights from New York’s La Guardia Airport would have averted a PR disaster. The cost trad0offs of customer experience and satisfaction must be weighed against the hard realities of running a capital intensive, expensive to operate business. Yet JetBlue would have saved themselves millions of dollars in lost reputation if they had made that choice over attempting to get the stranded flight out in the middle of an ice storm, leaving a plane full of passengers stranded on the tarmac for hours.

This paper analyzes how JetBlue has been able to redefine and grow the positive aspects of their brand by using customer satisfaction measures of performance to better align crew members with customers’ perceptions (Waite, 2007). The lessons learned from this analysis are also being learned by airlines globally, some faster than others. The case of United Airlines and their refusal to reimburse a musician for a broken guitar, which lead to him producing a YouTube video that promptly netted over 55 million hits in two weeks and became the leading viral marketing story of 2009, illustrate some airlines still don’t get it. United is a case in point and their planes having all the atmosphere of an Internal Revenue Service office during audit time – quite different than a Southwest flight for example. These examples of United versus Southwest are provided to show just how acute and dramatic differences are in how the customer experience is the marketing.

At the center of JetBlue’s re-emergence as a dominant discount carrier in the US has been their improved approaches to managing, fulfilling and exceeding customer expectations. JetBlue’s organizational culture shifted from being purely focused on organizational effectiveness to one of customer centricity following the events of February, 2007. This shift in culture however did not come easily as the focus in the organization had been consistently on operations efficiency, dictated by the backgrounds of the senior managers and executives in charge of airline operations (Wade, 2007).

The metrics and key performance indicators within JetBlue forced efficiency and cost savings and placed high value on full flights always flying. This in turn led to a mindset of customers being second, and their expectations being third and their satisfaction being last. The incident of February 14, 2007 then was not just an aberration; it was the culmination of a mindset of seeing customers as an interruption to the efficiencies operation of the airline. Even though the cabin amenities were exceptional and well recognized in the industry and travel trade press, the soul of the company was beginning to slip away in the name of pure efficiency and operational excellence.

What JetBlue did after the February 14, 2007 wake-up call was to create an entirely different series of customer service and marketing strategies to stress customer experience over just operational efficiency. As JetBlue, like many airlines is a highly metric-driven culture, the use of key performance indicators (KPIs) and measures of performance is critical for making change last in the organization. Monitoring, measuring and modifying strategies as a result of the use of SERVQUAL became the foundation of JetBlue’s focus on improving customer relationships, meeting and exceeding expectations, and also creating more effective marketing strategies over time (Parasuraman, Zeithaml, Berry, 1991). This was a unique step for any airline to undertake as the cultures are highly tuned to operating and process efficiency over customer satisfaction and in many airline company cultures, these two aspects of their business can pull their operations strategies in opposite directions.

To lead the revolution towards customer experience, JetBlue first concentrated on a balanced Scorecard (BSC) approach to making sure there was a balance of operational and customer-centric metrics in place. Second, the company integrated the two dominant methodologies used extensively in services industries, SERVQUAL into their core set of performance metrics. This in turn led to the development of the best measures of variation in expectations versus actual performance delivered JetBlue had ever seen, even when they had occasionally used customer satisfaction surveys in the past. The basis of the SERVQUAL methodology is to measure the difference or variation in the median levels of expectations versus actual performance of an organization. There have at last count been over 800 studies of SERVQUAL and many of them multi-year in scope(Parasuraman, Zeithaml, Berry, 1988). These studies when taken together over the decades in which they were completed provide an accurate glimpse into how trust is generated as part of the broader marketing strategies, programs and operations strategies of service-based businesses (Parasuraman, Zeithaml, Berry, 1985). An essential aspect of the methodology is that the measurement must also be completed during the actual service delivery process, and to this end JetBlue began offering, in randomized seats, SERVQUAL-based surveys to passengers during and at the end of flights. This provided an exceptional level of insights not attainable through traditional customer satisfaction surveys e-mailed or mailed out after the fact. The interaction between the service provider and client is more accurately measured when done as immediately as possible to the actual service event (Parasuraman et al.). The SERVQUAL metric was originally created with the five generic dimensions of service quality for customers’ expectations to be met(Parasuraman, Zeithaml, Berry, 1991). These five dimensions are briefly discussed here in the context of how JetBlue used them to better manage expectations and improve the experience of flying with them.

The first of the five dimensions of SERVQUAL is assurance (Crosby, Evans, Cowles,1990) (Parasuraman, Zeithaml, Berry, 1988). This is the dimension that concentrates on those areas of a company’s culture that are the most difficult to change and as a result include the areas of knowledge transfer, training, new employee development and customer satisfaction programs to increase overall SERVQUAL scores. Studies have also indicated that this dimension of SERVQUAL is critically important as a determinant of trust within selling, service and service recovery scenarios (Anderson, Baggett, Widener, 2009). Assurance is a critical determinant of trust and integrity throughout a long-term relationship with a customer as well. Trust in fact is the catalyst of customer loyalty and assurance is key to making that happen. For JetBlue they had drastically reduced the trust in their brand due to the February 14th, 2007 event but also the many aberrations in customer service that had happened previously (Wade, 2007). The assurance components of SERVQUAL, when quantified through actual survey work, showed JetBlue that despite their passion for quantifying and measuring operational performance, they were failing often in the area of assurances to customers.

Overbooking flights, not telling customers of gate changes until literally the last minute, not paying for hotels when the last fight out of a city was cancelled for those on return legs of their itineraries all contributed to the JetBlue brand taking a beating in the market. This one component also showed very clearly that the JetBlue brand was its marketing; the two were inseparable. The JetBlue customer experience as even more of a predictor of the company’s growth than any amount spent on marketing, promotion, discounts, special fares or even bundled vacation programs (Zeithaml, Berry, Parasuraman, 1988). JetBlue learned the hard way that this one aspect of the SERVQUAL model, assurance, has a direct bearing on their ability to be trusted for the long-term and for their marketing programs and promises of performance to have any credibility at all. Assurance is the catalyst of credibility and trust, and through the surveys that JetBlue completed both in-flight and at landing showed this as the case (Ku, Fan, 2009). The second factor in the SERVQUAL methodology is empathy, or the ability of an organization to create, maintain and grow processes that create a culture that places a high value on a caring, individualized environment where customer needs are critically important. Southwest Airlines had previous to 2007 been using SERVQUAL on short-haul regional flights to test out if their unique value proposition of being an attractive alternative to driving was working. Purely from an economic standpoint as gas prices have risen their value proposition has been solidified (Crosby, Evans, Cowles,1990). Yet the aspect of empathy is an area where Southwest seeks to hire the best possible attendants to create this culture both in their large operations teams and also onboard their flights. JetBlue on the other hand had created a culture that stressed efficiency and pure operational excellence over empathy and the result eventually came out in their decisions made to strand passengers on the tarmac of five hours on Valentines’ Day, 2007. What is fascinating about the SERVQUAL methodology is that each component can accurately determine the level of commitment to a given value that may be strong underneath the branding and marketing veneer of a company, waiting for the right set of circumstances to expose it over time (Parasuraman, Zeithaml, Berry, 1991). This is exactly what happened with JetBlue on this dimension. Their initial empathy scores were negative, almost off the gird of analysis used for SERVQUAL. The veneer of empathy for customers as defined in their branding and marketing literature had become a hypocrisy waiting to happen; and on February 14, 2007 it did. In subsequent analysis of in-flight and post-flight experiences, customers mentioned that empathy was above the neutral line of the analysis, a marked improvement during 2008 and 2009 research periods the company completed. Empathy and assurance were the two areas of SERVQUAL analysis where JetBlue found the greatest room for improvement overall. To compensate for the exceptional low scores in the areas of empathy and assurance, JetBlue also aggressive pursued social media marketing strategies to overcome this weakness. The airline did this for two strategic purposes. First to get its crew members and attendants in touch with customers’ real-time expectations, experiences, compliments and complaints. This proved to be exceptionally effective from the standpoint of getting the internal culture focused on listening to customers instead of just shoving them through the airline company’s operational systems and queues to generate sales. Web 2.0 technologies (O’Reilly, 2006) had the strong effect on the company’s ability to listen and appreciate how to better serve customers. The Web 2.0 technologies are based on the design principles and tenets that are shown in Appendix A, Web 2.0 Meme Map. JetBlue soon found that striking a balance between operational efficiency and the quest for operational excellence could be balanced with empathy and the ability to design processes to deliver assurance as well. Earning trust, over time, became a higher priority than just hitting the highest levels of efficiency over time. This transformation was also made possible through the use of social networking platforms and applications (Bernoff, Li, 2008). A representative analysis of social networking applications is shown in Appendix B, Social Networking Applications.

It is ironic that JetBlue adopted social media marketing to change their reputation and they have been changed by it. The lessons learned from their social media marketing strategies built around Facebook, Twitter and other platforms has been to further underscore how critically important SERVQUAL is as a measurement of their performance over time on the customer experience dimension. In effect the social media marketing strategy had transformed JetBlue more than it changed any aspect of their customer base. The company began to realize that when empathy and assurance are measured there is a corresponding impact on financial performance over time. Today JetBlue has over 1 million followers on Twitter and millions of fans across all their social media marketing programs. The irony of social media marketing changing the company more than influencing its customers is not list on industry analysts or senior management.

The third factor of SERVQUAL is reliability, which is by definition the ability of a service organization to deliver consistent performance over time (Parasuraman, Zeithaml, Berry, 1985).

JetBlue has been able to accomplish this through their strong culture of operational excellence and performance. This aspect of SERVQUAL did excellently compare to other aspects that were related to creating and sustaining trust. On this measure JetBlue excelled as their organizational structure and analytics are geared towards business process consistency and performance. The value of reliability is so engrained into the company’s culture that they readily excelled at it, often at the expense of their customers, which is what led to the moment of truth of February 14, 2007.

The fourth factor in the SERVQUAL measurement methodology is responsiveness. On this dimension of SERVQUAL, JetBlue initially found that their strong operational performance focus helped them from an on-time departure standpoint (Waite, 2007). Yet the focus on responsiveness from an operational efficiency standpoint was coming at the expense of empathy, assurance of individuals care and a focus on making the experience being part of the broader marketing experience. This fourth factor of responsiveness in conjunction with the tangible experiences of JetBlue as a brand, which is the fifth factor in the SERVQUAL methodology which includes all branding, communication materials, equipment, physical facilities, and most importantly, the customer service and flight personnel. Please see Figure 1: SERVQUAL Conceptual Model for an overview of the entire set of factors.

Source: (Parasuraman, Zeithaml, Berry, 1985)

For JetBlue to recover from customer experience disaster of February 14th, 2007 and the more systemic challenges the company has had in becoming more customer-centric, senior management turned to SERVQUAL to evaluate overall performance across five key dimensions. When the transformation of JetBlue from a marketing standpoint is analyzed using this framework their many initiatives, strategies and programs all interrelate and show how critical it is for any company to aspire to eh trust of its customers. JetBlue successfully did this over time, ironically being transformed through the customer listening process they hoped would transform their customers. In the end, JetBlue learned hwo to be more customer-centered by taking on the challenge of transforming their brand, and the most critical aspect of their marketing, which is the customer experience they deliver.

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