TEACHING & LEARNING
Custom Builder Has
Designs on Future
Powers of Concentration: Wharton's Undergraduate Entrepreneurs
OUTREACH
Between
a Rocket and a Hard Place
Faces of Wharton Entrepreneurship
RESEARCH
The Vanishing $7 Billion:
An Options Approach to Corporate R&D
2002 Philadelphia 100 Find High Growth in Downturn
Outreach
Flying High
It takes courage to launch a discount airline while majors are in free fall. David Neeleman, founder and CEO of JetBlue Airways, attributes his company's success to three simple principles.
While
major airlines are flying through unprecedented turbulence, discounter
JetBlue has navigated terrorist fears and an economic slowdown to reach
$600 million in sales in its second full year of operation. How? David
Neeleman, founder and CEO of JetBlue Airways, shared the secrets of JetBlue's
success during a keynote address at the Wharton Entrepreneurship Conference
in December 2002.
Neeleman said customer service is what sets JetBlue apart. "American companies are not customer-service driven," he said. "They don't think about customers as much as they should. Companies who set themselves apart in customer service will stand out in any economic downturn." In particular, he credited three customer service strategies with driving his company's ascent:
- Flawless
execution at every customer touchpoint: JetBlue
is rated number one in on-time departures with 99 percent of its flights
on-time, Neeleman said. "From Aug. 6 to Sept. 15, we had 20,000
flights with no cancellations. That's flawless execution." JetBlue's
president, Dave Barger, receives daily reports on how long it takes
each piece of luggage to make it to the baggage carousel. "Getting
your luggage is the last part of the customer's JetBlue experience,"
he said. "We make sure it doesn't take any longer than 20 minutes."
- Make
it right with the customer when you don't have flawless execution:
With bad weather and equipment problems, flawless execution isn't always
possible. Then, you make things right. "If weather delays our flights,
we offer customers $25 off their next flight. If a delay was our fault,
we offer them $50 off; if it's more than four hours late we give them
a total credit." He even told the story of a customer, stuck for
over an hour on the Rochester, N.Y., runway in a JetBlue plane due to
approaching thunderstorms, who was so delighted with her treatment by
the crew that she called it her "best flight ever." The pilot
allowed passengers to use their cell phones while on the runway and
even offered his personal cell phone to anyone who needed to make a
call because of the delay.
- Have employees who are ambassadors for your brand: Taking care of employees — called "crew members" at JetBlue — is "the hardest job I have," Neeleman said. Every week, Neeleman boards JetBlue flights. He spends this time talking to the crew and customers. "All 700 of our crew members know I fly on our planes and talk to our customers." JetBlue also offers every crew member annual profit sharing checks, discounts on stock, health insurance from the first day on the job, a 100 percent match on 401 (k) plans and other benefits.
The challenge ahead for Neeleman and JetBlue is keeping crew members motivated and inspired as the company grows. "As this company moves from an entrepreneurial stage to the operating stage, I'm already thinking of the next big thing in air travel," he said. "It used to be live television at every seat."
Neeleman, who admits to being a habitual entrepreneur, stresses the importance of finding and hiring "great operational people." At the same time, he keeps his hands on the stick through personal involvement with the business and employees. This helps him to "figure out what is success at each stage and how to make each customer experience special."
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