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Case Study Analysis #3 United Breaks Guitars

By: Shebra Sanders

Public Relations Instructor: George Scott July 22, 2013

UNITED The Mishandling On March 31, 2008, Musician Dave Carrol and his band Sons of Maxwell were on their way to a week-long performance engagement in Omaha, Nebraska. They made their trip from Halifax, Canada to Omaha via United Airlines, with a connecting flight at Chicagos OHare airport. While the flight waited on the tarmac for the luggage to be loaded onto the plane, members of the band, as well as other passengers observed mishandling of the luggage. One of those pieces of luggage happened to be Dave Carrolls Taylor guitar, worth $3500. The guitar was damaged Carroll alerted several members of Uniteds on-ground crew, and basically received the run around. By the time he landed in Nebraska, it was after midnight and he wasnt able to initiate a claim for his damaged guitar. Seven months later Carroll was able to connect with someone who would actually attempt to help with his claim. But to his disappointment, was told by company representative, Ms. Irlweg, that she was sorry about what happened to the guitar, but that standard airline policy held that claims be made within 24 hours of damage( a precaution against fraudulent claims). She told him that his claim was going to be denied. Carroll asked to speak with a supervisor, but was refused. His final request was for $1200 worth of United flight vouchers, the amount he had paid to repair his guitar. The representative told him no, United considered the case closed, and there would be no further communication on the matter.(Broom, 2012, p. 517) In his last correspondence to the United representative, Carroll told her that he would be sharing three songs with video, on Youtube, that he had written about the treatment he received from United Airlines and the denial of his claim.

UNITED The Social Media Backlash Approximately fifteen months after the incident, on July 6, 2009, Dave Carroll posted the first of three videos, titled United Breaks Guitars. With the help of friends and friends of friends, Carrolls video went viral on Youtube and Twitter. They reached out to others who had bad experiences with United, as well as members of the media including Jay Leno and Jimmy Fallon. Three days after its release, the video had been picked up by media outlets like Consumerist. Com, HuffingtonPost.com and NBCChicago.com. Within a week the video received nearly 1.6 million views. On July 10, Bob Taylor of Taylor Guitars contacted Dave Carroll offering his support and offering Dave a new guitar and re-repair of his damaged guitar. Dave and his bandmate, Julian, were also invited to tour the Taylor Guitar factory. Beginning on July 23, a second surge in YouTube traffic arose when the British news media picked up the story. By the end of July, the video had been viewed 4.6 million times.(Broom, 2012, p.517) Approximately six weeks after the release of the first YouTube video

HuffingtonPost.com wrote; United Breaks Guitars: Did it Really Cost The Airline $180 Million? The article discusses a claim by a British reporter that the backlash from Uniteds mishandling of Daves damaged guitar, cost the Airline $180 million dollars in lost revenue or 10 percent of its market cap. The article goes on to state: Though you can certainly imagine a handful of enterprising traders moving shares of United on the news that it was fending off a new media attack-YouTube arbitrage?- its borderline silly to suggest that a something like a cheeky web video could move such a prominent stock 10 percent. United is an enormous, struggling company, with a stock price that has been on a downward trend since

UNITED last fall. In other words, its a typical airline stock.(McCarthy, 2009) The tone of the article suggests that the decline in Uniteds stock prices wasnt exactly a result of Dave Carrolls videos. Coincidence maybe. Uniteds Response via Social Media United Airlines has its own presence in both online and social media In July 2009, United maintained a presence on Twitter that had approximately 18,000

followers All United employees were encouraged to monitor social media for mentions of United Airlines.(Broom, 2012, p.518) One day after Dave Carroll released the first video, and before any media outlet had picked it up, United was made aware of its existence and reached out to Dave. They were told that Dave would return their call the next morning, it was then that United sent out their first Twitter response: This has struck a chord w/ us and weve contacted him directly to make it right. Throughout the day, United tracked the twitter conversation and would occasionally re-state their position. Uniteds Rob Bradford reached out to Carroll on July 8 to apologize for the situation and to ask if United could use the video internally to help change its culture. He offered him $1200 in cash, the amount Carroll had spent on repairing his guitar, plus $1200 in flight vouchers. (Broom, 2012, p.519) Dave said no to the offer and asked that United donate it to another customer that had experienced the same problem with their airline. Instead United chose to donate $3000 to the Thelonius Monk Institute of Jazz. Even after United tweeted about the donation made, they continued to be taunted by Dave Carrolls friends, fans and followers on Twitter and YouTube.

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There are strategies that companies can implement to operate effectively when the power to craft messages and images is shared between marketer and consumer. The incident that occurred with Dave Carrolls broken guitar probably would have been settled in a better manner if not for a policy that was clearly instituted and enforced for the benefit of the airline. One strategy would be the one United used; responding via the same medium the complaint was made. Another strategy that would be effective is requiring and constantly monitoring Customer Response Letters(CRLs)and/or by implementing How are we doing? questionnaires as a part of sales receipts at Point-ofSale transactions. Evaluation United Airlines was and still is a large corporation whose first priority should always be the satisfaction of all its publics. It would have been easier to satisfy a member of their consumer public at the time the guitar was broken, than to have to deal with bad PR and backlash from more of their publics. United Breaks Guitars involved nearly every group of a public an airline normally deals with. Dave Carroll, a member of the most important group, the consumer public, actually became better known and received greater fame, and probably greater fortune, because of this incident. He also received a book deal, he wrote a book titled, United Breaks Guitars: The Power of One Voice in the Age of Social Media. Rob Bradford, Ms, Irlweg(the initial helpful representative) and other United representatives were members of the employee public, and were the face of United during this ordeal. The drop in Uniteds stock prices and possibly the 10 percent loss of its market cap involved

UNITED the members of their investor public. The news outlets and talk shows that were contacted and interviewed Dave or members of his entourage were a part of the media

public. The $3000 donation United gave to the Thelonius Monk School Institute of Jazz (United is also the schools official airline) made the school a part of its community public. Also, the outcome of Dave Carrolls United Breaks Guitars ordeal was important to other airlines. Other airlines were members of Uniteds other corporate publics Competing airlines could use Uniteds handling of the situation as a what-not-todo, or as United planned to; as a customer service training tool. United Airlines website, united.com, and its online presence on Twitter didnt help when they tried to defend themselves against the tidal wave of negative comments from Twitter members who followed the incident. They limited exposure of their response to online correspondence, which helped to lessen the fallout. Although the result was a few million YouTube views and some television and media coverage, the majority of the backlash was online and through social media. I dont know anyone, online or mainstream, that has heard of this incident. Recommendations While every business cant fulfill on the special needs for every customer situation, if youre in the service business, this is something you need to be prepared for.(Taylor, 2013, Male Musicians Pick Up Guitars Like They Pick Up Women) My recommendation is that United executives let the above statement be their customer service training mission statement.

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References Broom, G. M. (2012). Cutlip & Center's Effective Public Relations, Empire State College CDL213634 (10th ed.). Boston, MA: Pearson Education. McCarthy, R. (2009, July 24). 'United Breaks Guitars': Did It Really Cost The Airline $180 Million? The Huffington Post. Retrieved July 22, 2013, from http://www.huffingtonpost.com/2009/07/24/united-breaks-guitarsdid_n_244357.html Taylor, I. (2013, April 28). "United Breaks Guitars" is a Fun and Fantastic Read. Small Business Trends. Retrieved July 23, 2013, from http://smallbiztrends.com/2013/04/united-breaks-guitars-book-review.html