Wednesday, July 13, 2011

Web Secret #162: United Breaks Guitars

Here is a cautionary tale about poor customer service, and how even individuals can use social media to powerful effect against even the largest corporations..

In 2008, David Carroll, then a relatively unknown musician, was flying to a gig via United Airlines.

The airline baggage handlers broke his $3,500 Taylor guitar

Carroll then spent nine months in fruitless negotiations with the airline for compensation. United responded with indifference.

In response, Carroll wrote a song "United Breaks Guitars" and released it in 2009. The song became an immediate YouTube and iTunes hit upon its release in July 2009. Check it out:

The YouTube video was posted on July 6. It amassed 150,000 views within one day, half a million hits by July 9, 5 million by mid-August 2009, and 10 million by February 2011.

Bob Taylor, owner of Taylor Guitars, immediately offered Carroll two guitars.

United's managing director of customer solutions, telephoned Carroll to apologize for the foul-up and asked if the carrier could use the video internally for training. The Times reported that belatedly, United donated $3,000 to the Thelonious Monk Institute of Jazz as a "gesture of goodwill" which failed to undo the damage done to its image.

Who are the winners in this affair?

First and foremost Carroll, who is now in great demand as a speaker on customer service and whose song was number one on iTunes. Bye bye obscurity!

Taylor Guitars also won. They are mentioned numerous times in the video - free advertising that reached millions. And offering free guitars? Well that was extensively reported in the media - that's thousands of dollars of free PR.

Who are the losers?

United Airlines who failed to respond effectively. A company of that size, (quite frankly any size) should have a plan in place to deal with negative social media. Obviously, they were clueless.

The New York Times reported that within 4 days of the video being posted online, United Airline's stock price fell 10%, costing stockholders about $180 million in value.

Some analysts have questioned whether this price drop can be directly linked to the video. Nevertheless, you don't need to be a PR genius to know that the impact was negative, and severe.

So was it worth it United? A simple apology and a check for $3,500 seems like a much better way to go.

And it's not even high tech.

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