I’m busy enjoying some Maui onion rings right now, so I’ve lined up a guest post for your reading pleasure. Eric Starkman has read this blog for a long time and he had an interesting story to tell regarding outsourced call centers. Enjoy.
Here’s a marketing tip you can take to the bank: companies that excel at customer service and engagement don’t outsource their call centers. And don’t just take my word for it. Here’s what Blake Nordstrom, CEO of the customer-centric retailer that bears his family name, told me when I asked why his company doesn’t outsource its credit card call centers:
“As merchants, we don’t profess to be bankers. We do feel strongly, though, that we work one on one with our customers and not have a third party in between to potentially jeopardize our relationship.”
JetBlue Airways understands the dangers of outsourcing customer service functions. Virgin America doesn’t. And therein lies a marketing tale.
I was once one of Virgin America’s most enthusiastic frequent flyers. The airline’s vaunted in-flight entertainment service didn’t do much for me, but I loved that it was among the first to offer Internet access, individual USB ports, and, at least initially, some pretty darn good food. In the early days, Virgin always also had an incredibly loyal and enthusiastic team of employees. Yeah, the company’s problem-plagued and error-prone online reservations system was a huge pain, but I was willing to tolerate the inconvenience.
My love affair with Virgin America soured last summer thanks to some employees who don’t actually work for the airline. Rather, they worked for the company that runs Virgin’s call center. I always dreaded having to deal with these employees because of all-too-frequent problems with my online reservations, but an incident relating to Hurricane Irene put me over the edge.
I was scheduled to fly from SFO to JFK the day after the storm was expected to pound the Northeast coast. I figured my flight would be cancelled, particularly since Virgin had posted a notice on its site saying it wouldn’t impose change fees for flights leaving days before or after Irene’s predicted arrival.
But the agent insisted on imposing the change fee, arguing that the notice (image above) made clear that the fee would be waived only if my scheduled flight was actually cancelled. The agent, whose disinterest and unprofessionalism was exceeded only by her incompetence, readily conceded that change fees are never imposed on cancelled flights, but still argued that I was misreading the notice. I asked to speak with a supervisor and was put on hold for more than an hour, only to have my call dropped. I’m still steaming about the incident.
Virgin America ultimately refunded me my change fee, but I was underwhelmed with the company’s handling of the situation. So, I decided to give JetBlue a try. And I was immediately blown away by the experience.
JetBlue doesn’t outsource its reservation call center, and that immediately became abundantly clear in my first interaction. The employee I called gladly and rather enthusiastically took care of a seating request, and, upon learning that I was a dissatisfied Virgin America customer, immediately seized upon the opportunity. Let’s just say that before the call ended, the guy had me enrolled in JetBlue’s frequent flyer program and signed up for its American Express card. That was no mean feat because I long ago had forsaken airline affinity cards.
Perhaps I’m flattering myself, but I think I’m a pretty desirable airline customer. I’m bicoastal and fly JFK-SFO return at least once a month. I always pay for an extra legroom seat. And I’m a pretty heavy credit card user, so JetBlue is doing all right by me on that front.
My favorable experience with JetBlue’s call center wasn’t a one-time incident. I recently had to change a flight and asked if the airline might be willing to waive its change fee simply because of my frequent patronage. And the agent, with the help of her supervisor, gladly did.
JetBlue’s decision not to outsource a critical customer service function on its own probably isn’t a marketing advantage. But the mindset responsible for the decision is likely the same mindset behind the company’s progressive HR policies and its dogged determination to interact with its customers even when they are pleased. I’ve yet to interact with a JetBlue employee who didn’t really like working for the company, and I’m incredibly impressed with the speed and personalization of emails I’ve received from JetBlue complimenting them on various persons who I have cited for exemplary performance.
Virgin America was once JetBlue’s equal on the customer service front and filled with employees who would go beyond the call of duty, but the company has lost its edge. I recently sat next to a veteran Virgin America pilot who readily shared my view. “[CEO David] Cush is just looking to take the company public so he can make his millions and get the hell out,” he said. The pilot spoke even less favorably about Cush’s deputies.
Maybe the pilot’s view is unfair or not even widespread, but I will tell you this: Wall Street loves outsourcing call center functions because on paper it dramatically can reduce costs. In reality, it can actually make it difficult for a company to attract or retain some high paying customers. Savvy investors would be wise to consider why JetBlue is planning on adding more lucrative extra legroom seats to its flights while Virgin America recently was offering heavily discounted rates for its extra legroom seats on Labor Day weekend flights.
Eric Starkman is PRESIDENT of STARKMAN, a public relations and marketing firm with offices in New York and San Francisco. Earlier, he was a reporter with major newspapers in the US and Canada. He is a frequent flyer and an avid and longtime reader and supporter of this blog.
silly duck, that’s Virgin America you are talking about, he is writing about Virgin America, and then you get even less cred when you turn political
silly duck, that?s Virgin Atlantic*****(typo, sorry) you are talking about, he is writing about Virgin America, and then you get even less cred when you turn political
Yeah… I would hope you know the difference between Virgin Atlantic and Virgin America. They are very different companies and offer very different products. I agree with BrianKal… using a political viewpoint to express an airline customer service experience does not give your statements any credibility on an air travel blog.
Though I have yet to try Virgin America’s product, I second the sentiment that JetBlue is the absolute best in value and service out there.
As an airline employee (not for JB) I have the privilege to fly for free or cheap almost any carrier out there and wouldn’t think twice about paying for a ticket on JetBlue. I’ve experienced them both as a nonrev and as a paying passenger and can testify that value and service speaks louder than the cheapest ticket.
Can someone forward this to United? They could use a note or two about long customer hold times…
Don’t bother, nobody there would read or reply to it.
Does anyone know if jetBlue’s phone agents are still primarily stay at home mom’s? If I remember right, from when I read the book “Blue Streak” about the start of jetBlue (an interesting read I might add), David Neeleman capitalized on Mormon housewives who wanted to work. Calls were routed to their house, so they could watch after the kids, while working from home. They never had to actually go in to a “call center.” I guess Neeleman had originally used the system at Morris Air and had rolled out the same system when he founded jetBlue. That would definitely explain why their customer service is so great.
Yes they are still based out of their homes in the SLC area
last time I asked one of them, she was at home…..
what a great way to work.
love jet blue
I work for JB and not everyone is a “stay at home mom” but yes, we work from home. I love my job and I’m happy to take care of customers in whatever way I can.
OK I’ll say it, when we complain about call centers, we mostly mean ones in India. It can be hard to understand the person you are talking to just as it can be hard for them to understand the English spoken by someone from Boston, New York, a Southern, a California valley girl, or even the English spoken by someone from another part of the world. Not understanding what is being said is a big issue in getting assistance.
As someone who works for a company with an office in India, I call tell you India/English and American/English don’t always translate well. I also know that in India workers don’t stay on the job as long as we do here. If another call center opens down the street that pays more they just leave and go work at the new center. If you have a revolving door of workers, that doesn’t help when dealing with customer service.
I do read that some company’s are returning call centers to the USA or at least adding more people here as they are finding out people want to deal with people here and not in some other country. Hopefully that will become more of a trend for businesses.
The problem is that while their English is often impeccable, they are not empowered do anything outside of their parameters, and are told to stick to the rote scripts at hand which are usually absent of any emotion or empathy.
Any escalation usually routes you back to the United States?that is after you?re offered a credit card. I think the frustration with international call centers arises at their inability to actually help with anything, so the accents and geographic location end up taking the blame.
This is a tremendous anecdote about why great companies look past wall street’s single-minded emphasis on quarterly earnings and do the things that make sense from a longer term perspective. When a company can differentiate a commodity service like air travel with exceptional customer service, that is a recipe for success.
Nordstrom’s a great example. Nearly every traditional department store retailer has been bought out, gone bankrupt or consolidated into oblivion except Nordstrom.
Overall, great guest post.
After leaving that last post I read in Business Wire that Air China is extending the hours of its call center in Los Angeles. They said that center takes English calls from the US,Canada,Hong Kong, Sinapore, Australia, and the Philippines.
Now there’s a switch, I never thought of it the other way around that non-English speaking countries might need workers in the US to handle English calls they get from other parts of the world.
I hope more call centers come back to the home country of whatever business. I don’t mind accents, and actually rather enjoy hearing them. Yet one thing a good agent has is a sense of what a reasonable resolution to a problem is. Can’t get into LGA? Maybe JFK is ok depending on the circumstances. No matter how well-intentioned or hard-working, an agent in a distant land who hasn’t travelled much simply lacks this. I once had an agent for Travelocity try to force me into flying into BUF and picking up a car in ROC. “Take a taxi” was the suggestion to pick up the car. “They are both in NY.” It was, and will remain, the last time I booked with them.
Try to book a multi city ticket for 7 people with AA’S call centre that’s
an experience – It will drive you nuts!!!!
I was non-reving with a major carrier over the weekend and chatted up a few flight attendants. They told me they rarely non-rev with their airline, instead they prefer JetBlue.
They say the treatment is wonderful and appreciate the above mentioned positive attitude from the employees. Some pilots have even offered to place their bags in the cockpit when overheads fill up, unlike their own airline.
I’ve also done the transcon on JetBlue before and I couldn’t believe how pleasant of an experience it was. A 6.5 hour flight felt better than a 1.5 hour flight on an RJ. I only wish they went to more domestic destinations.
As for outsourced customer service, just last week I had to go through four different agents in three different countries (India, Philippines and USA) before I could get my upgrade refunded by United.
I will say, though, not all in-house customer service is always effective. I had a flight cancelled from Irene on Southwest. The first time they wouldn’t refund the ticket, but only rebook because the SODA hadn’t been passed on to reservations. Then when that flight was cancelled they would only refund 1/4 of the ticket and said the rest had to stay as a credit. When that didn’t happen I had to call back and after a few hoops was able to get the entire money back, but the process still took longer than it should.
Finally, I do have some praise for an outsourced center. I’ve never encountered a bad representative from Spirit. For me, it’s their mainland and airport staff that have the attitudes. Last year, I mistakenly booked a ticket the wrong way and the call center waived the change fee without hesitation.
I think it ultimately all comes down to training and just caring about your job and company. The Spirit agents seemed well versed in the policies and procedures of the company and where they can bend the rules while United’s international representatives knew what was on the script and nothing more.
Alaska is also great when it comes to over-the-phone customer service. Everyone is based in the United States, and they tend to be very knowledgeable, even when it comes to esoteric booking issues, like partner award tickets with stopovers, etc.
Second that. I wanted to use miles to go international with flexible dates, and flexible orgin US city for the international hop. The Alaska ‘superstar’ agent, got us round trip on Cathay to Hong Kong and connected us all the way to the frozen north of Fairbankson low miles. I will also ‘never forget’ that customer service.
US Airways also returned all their agents to US within the last year or two. Got rid of the outsourced call centers…
Just to clarify: Virgin America’s outsourced call center is in Seattle, not overseas, and is run by Xerox. I can’t help but note the irony that Seattle also is where Nordstrom is headquartered.
Thank you Ben and Sanjeev for the info about JetBlue allowing agents to work from home. That’s news to me. The system is set up that you really can’t tell.
Virgin America previously used another outsourcing company that allowed agents to work from home, but they sounded like they were. Airline changed to the Xerox call center in mid-2008.
Great essay. Sounds like JetBlue has the type of people SWA used to. I haven’t gotten a whole lot of warm and fuzzy feelings the past 5 years from their reps.
great post…yeah, the last time I chatted with a rep, she was at home.
What a great way to work
Jet Blue rocks…
but I have a question –
why is Romney flying in an MD-88 (I think), and not the plane McCain flew….a rather sharp 737
while Sarah was in a JB e190?
my 2 cents worth for the author, Mr. Starkman:
instead of waiting on hold for an hour, after disagreeing with an agent over the wording of the cancellation policy –
try hanging up and calling again instead.
im pretty sure the next agent (or the one after that) would have agreed with you on the wording.
Mike: I neglected to mention that I was on hold for a considerable period of time before an agent took my call, which means I would have had to repeat the process. Moreover, I’m not certain whether another agent would have handled the issue any differently.
For the record: I wasn’t sitting idly while waiting for a supervisor. I had the call on a speakerphone, and I was working on a project.
Delta maintained the Northwest call centers in the US and closed the international ones shortly after the merger. All Delta call centers are also insourced Delta employees working in the US.
In digital marketing, we also call it CRM. It’s one of the very effective ways to have your customers love you and always make a loyal client.
Customer Relationship Management isn’t unique to digital marketing; banks, particularly Wells Fargo, were at the forefront of this technology.
While probably not in the league of Target and Amazon, my sense is that JetBlue can at least readily identify its frequent and loyal customers. More importantly, it empowers its employees to use their common sense and bend the rules at their discretion. The supervisor who waived my $100 change fee was definitely aware that I was a frequent flyer and a JetBlue Amex holder.
Good write up. There is no line that accounts for ‘the art of customer service’ on a financial analyst’s spreadsheet. Customer centric companies understand that not everything should come down to dollars and cents. So although outsourcing call centers may look good on paper, you can bet that this author’s negative experience occurs much too often.
Sure there is. Goodwill. The value of the Brand’s intangibles.
FYI: I just learned that Xerox has a commercial touting that it runs Virgin America’s call centers. Xerox claims that Virgin has increased call center productivity by 10 percent while increasing the quality of guest care. I’d love to see the metrics used to justify these claims.
Here’s a link to the video.
Totally agree with the importance of domestic, empowered call centers. Try calling HP about a printer problem – scary. Versus calling Apple and getting quickly to a responsive, intelligent tech. Creates loyal customers for life.
I have to stick up for SWA a little, seeing as I have the floor – sadly JetBlue doesn’t do ABQ (please! please! do!), so my choice is SWA or AA. I try really hard to always choose SWA because their people aren’t always either pre-programed or pissed off, as AA people seem to be.
In my book, WN, B6 and VX are equally bad because their FF programs offer virtually nothing. I’ll stick with the legacies, especially UA, for great mileage earning and redemption opportunities. 1K status helps with UA customer service, of course.
I am a reservation agent for jetBlue and I can tell you it is super terrific to end your last call, walk down the hall into the kitchen to get a cookie. No drive time and you don’t have to buy expensive clothes (I always dress well because it’s more professional). JetBlue is very strict in it’s hiring process. They only hire people that love dealing with people. I have many years experience as a professional artist and have grown to love the interaction with customers. JetBlue is also very fun for us. They go out of their way to offer all sorts of great experiences (like renting whole theaters for the premier of Harry Potter movies). We are happy campers and love our work. I want our customers to know that we all care very much about what we do. If you have a serious problem we often have tears in our eyes and want to make things work. One of my favorite things is the way we honor the lowest fare and I get to give the customer a credit! It can make my day!
I’m a reservation agent for JetBlue also and love your comment Julie, I love to help customers. I got a lady on the phone asking me that she was traveling with a handicap kid that never flew before, and she ask me if we take him on the flight since he was complettly inmovil, and if she will be able to take the wheelchair to the gate. Of course I felt great just telling here that been inmovil is not a reason for him not to be on a flight and also told her about the tv that he could use a headset to keep him entertained. What really make me feel great about our One day sales, and the promotion for pets and many other things that we encourage everyone to try.
See this is why it’s silly for t-mobile to move their call centers – it just lowers their customer service that much more making unhappy clients…
Nice story Eric.
I remember marketing classes when my colleguess and I were deisqusing about similar things. Actually, we were talking about funny accents of those operators, as well as communication difficulties and noise in communication.
I completely agree with you.
Outsourcing call centers can reduce costs only on paper.