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United Breaks Guitars: Case Study

by

Chey Peterson

on 14 November 2014

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Transcript of United Breaks Guitars: Case Study

Bad Business
Between the Sons of Maxwell blog and Facebook, the movement against customer service took off.

Carroll was invited to a Congressional hearing to tell his airline experience, along with other band performances, and endless business speaking events.

The media loved the video too.....
Dave Carroll, a 41-year old musician, had his $3,500 Taylor guitar thrown around by United Airlines baggage handlers in his layover city and was witnessed by two other passengers
Carroll immediately alerted flight attendants, but was ultimately ignored and told to talk to crew at his final destination
In his final destination, Omaha, it was past midnight and there was no crew around
United Breaks Guitars
United Responds

(finally)
"United Breaks Guitars: Song One" hit 2 million viewers in just one week!
Carroll issued a statement a few days after hitting his goal. He updated viewers on United's compensation offer and asked people to treat United employee's with kindness.
Instead of compensation, he asked the airline to make a donation - now he just wanted to tell his story.

United policy requires customers to report claims within 24 hours of the flight, but Carroll was miles away on tour unable to make the claim at an airport
After 9 months of battling with customer service,
"The matter was closed. No vouchers, no money, no apology, no anything."







Carroll decided on a new course of action - he was going to make three music videos, aiming to attract one million hits in total.
Songs Two & Three
Besides the one tweet, United made no official apology, no news release, no written statement or other communication regarding the incident or it's donation
$3,000 to Thelonious Monk Institute of Jazz
They elected a spokeswoman who gave limited media interviews and vowed to use the video for customer service training
United's CEO, Glen Tilton, did not participate in any way
Main Issues
Uncontrolled, viral conversation about United
Customer service was inadequate to begin with
Poor public relations
Carroll became an activist voice, building influence far beyond even United's best PR efforts
Resources were restricted due to recession
Damaging to whole commercial airline industry
Publics/Stakeholders
A Case Study On The Power Of Social Media In Customer Service
SWOT Analysis

The Situation
Carroll's Nightmare
United Breaks Guitars: Song One
After the 4th of July in 2009, Carroll's band, Sons of Maxwell, uploaded the first video describing United's baggage handlers' outlandish handling of his guitar

It was a hit!
150,000 views in first 24 hours
Carroll decided to pack it up and deal with it later, since there was no visible external damage to his guitar's case and nobody around
The following day he realized the extent of the damage to his guitar, a broken and detached neck
Thus a 9-month long battle with United began...
Social Media Takeoff
Hits! Hits! Hits!
Meanwhile, "United Breaks Guitars" was going viral

1 Day: 150,000 views
1 Week: 2 million views
6 Months: 8 million views
Today: 14+ million hits
United's Tune
Song Two

posted a month after first one
detailed the endless runarounds with United's customer service department





Song Three

posted eight months after first video
examined Carroll's relationship with a customer service representative and how United's policies did not always work as intended
United’s stock price dropped 10% on the day CNN picked up the story, costing shareholders an estimated $180 million.

(Mills, 164)
Customers
Employees
Shareholders
Commercial Airline Community
Taylor Guitars
Public at Large
Anyone who has ever flown and/or plans to fly
Strengths
One of the Largest International Airlines
Almost 14% of Market Share in 2009
Strategic Alliances
Weaknesses
Minimal Social Media Presence
Low Employee Morale
Many personnel and pay cuts due to recession
Outsourced Maintenance Services
Preexisting Bad Reputation
Opportunities
Acquisition with Continental Airlines
Potential Presence Online
Globalization within Industry
Public Relations Management
Threats
Recession
High Cost of Resources
fuel, training, employees, etc...
Industry Competition
Bad PR is Bad for Business
Recommendations
Pre-Crisis
Create a Full Crisis Communication Plan
Airline Specific Contingency Planning
Appoint a Strong Spokesperson
Internet Presence and Awareness as to What Is Being Said About Organization 24/7
Recommendations
In-Crisis
Apologize - immediately
Do NOT ignore a crisis
Must release some sort of statement
Appoint a genuine, well-liked executive spokesperson
Comply with media outlets for transparency and effective messaging
Communicate & Respond
Customer Is Always Right
Internet Presence
Customers now have an active, instant role in organization and lead conversation
Educate employees and create an organizational culture that empowers them to succeed, even in a service failure
Focus on customer experience start to finish
Get Online!
Social media and blogging
Control part of the conversation
Create a positive, likeable voice
and responsive two-way dialogue
Dilute viral speed of activist
Don't Repeat The Crisis
According to a CBS report, after the second video launched, United reached out with a statement to everyone who mentioned or tweeted the link
Considered highly aggressive, but included a response to the video accusations and hard facts about how little luggage is damaged
Strong secondary effort; however, too little too late
Damage was done - monetarily & to reputation -
and they should have taken a more easy-going tone
In-Crisis Positive
The Business Side
of My Recommendations
Benefits
Costs
Potential Risks
Change the Conversation
Can't change it if you aren't involved
Work on Reputation
Can only go up from previous lack of PR practices
Internally & externally
Earn Back Trust from Publics
From shareholders to customers...
Need financial backing from both to be successful
Financial cost of Public Relations and cost to attain all necessary resources
It will ultimately cost them more, if they don't though
Time and effort to educate employees
, while reinstating positive culture into the company
Hiring a social media team to monitor 24/7
If new message or online voice is poorly received, could drive more dissatisfied publics
Someone will always criticize an organization as large as United but want that to be minimal as possible
Wrong spokesperson
could be worse than their minimal, random spokesperson
Transparency with all media channels
Viewed as riskier, but ultimately is best for PR practitioners to do at all times
United Airlines Background
Founded in 1944
Average of 45,413 passengers daily
703 Active Planes
Over 88,000 Employees
In 2009, United mishandled 4.10% of luggage
New online voice could be misunderstood
Could cause further disapproval from publics
Appointed executive spokesperson potentially less likeable or more controversial
than the previous, minimal spokesperson
Potential for more shareholder withdrawl
If continual crisis or insincere communication
Someone will always disapprove
Especially in a large organization, there are always prone to be critical publics of whatever
is said or done
Questions?
References
Not Everyone Lost the PR Battle
Taylor Guitars, the now famous guitar referenced in the three videos, had their own response...
They gave Dave a new Taylor Guitar
Created their own YouTube response video
The video stated how unhappy they become when any guitar gets damaged, reminded people about their repair services, and offered free information about how to travel safely with guitars
The two-minute video has generated almost 700,000 views
Total number of online news stories for the month of July

625
Total number of
blog postings
pertaining to United Breaks Guitars for the month of July ...
1,662

Total number of
tweets
pertaining to United Breaks Guitars for the month of July ...
5,980
Number of Blogs & Tweets
Online News Stories
Full transcript