29 Nov 2010  HBS Cases

United Breaks Guitars

A new case coauthored by HBS marketing professor John Deighton and research associate Leora Kornfeld offers an object lesson in the dangers social media can bring for big, recognizable companies and their brands. From the HBS Alumni Bulletin. Key concepts include:

  • The case documents the incredible viral power of social media, where one person can get the attention of a multibillion-dollar corporation like United Airlines and its customers with a music video produced for $150.
  • One of the points debated in class is whether social media are better at destroying value than creating it.
  • Students did not agree on whether United should have used the incident to make an affirmative statement on customer service, or should simply have kept a low profile and waited for attention to subside.
  • Organizations need to be aware of how best to present itself in this new environment and respond to potential parodies of its brand.

 

Tweets are in the air we breathe. Most of us know that "friend" can also be a verb. Social media are part of the public discourse now, whether or not we're active users of them. A new case coauthored by HBS marketing professor John Deighton and research associate Leora Kornfeld offers an object lesson in what that means for big, recognizable companies and their brands.

"United Breaks Guitars" documents the incredible viral power of social media, analyzing the reach and impact of a clever customer complaint music video produced by Canadian musician Dave Carroll when his attempts to recoup the value of his guitar (broken in transit) are stonewalled for over a year by United Airlines. Posted on YouTube on July 6, 2009, the video was tweeted by Carroll's friends, posted on social news sites, shared with Facebook friends, and picked up by bloggers. From there it was a quick hop to the mainstream media; by the end of July, the video had been viewed 4.6 million times, with external references expanding that audience by many more millions.

Taught in the MBA second-year course Digital Marketing Strategy and multiple Executive Education programs, the case depicts a new media era in which increasing numbers of people are spending as much time online as they are in front of the television and where one person can get the attention of a multibillion-dollar corporation and its customers with a music video produced for $150.

"This is a good case for getting a glimpse into a new world of communication, vs. the old world of Super Bowl ads and prime-time audiences," says Deighton. "The new world doesn't necessarily play by the rules of the old. One of the points we debate in class is whether social media are better at destroying value than creating it. In social media an entity's size and brand recognition make it more vulnerable to parody and attack, not safer. As we accumulate experience with these media, perhaps we will find that they tend to favor the insurgent over the incumbent."

United maintains a presence on Twitter and picked up a tweet about the video less than a day after it was posted. "This has struck a chord w/us and we've contacted him directly to make it right," United tweeted on July 7. It offered $1,200 to replace the guitar and $1,200 in flight vouchers; when Carroll asked that his compensation be given to another, similarly affected customer, United chose instead to donate $3,000 to a music school. Throughout the fracas, United used Twitter as its communication channel, answering critical tweets that it should have responded sooner with "Absolutely right, and 4 that (among other things), we are v.sorry and are making it right. Plan 2 use video in training."

Classes tended to divide sharply on whether United's response was very good or could have been better. The speed and consistency of the company's response won praise. But students did not agree on whether United should have used the incident to make an affirmative statement on customer service, or should simply have kept a low profile and waited for attention to subside.

As powerful as these viral incidents may be, Deighton suggests that the moment can fade fairly quickly. Even so, an organization needs to be aware of how best to present itself in this new environment and respond to potential parodies of its brand.

"It's a transparent world," he says. "This is an environment in which you simply have to be what you say you are. You can't hope to project an idealized version of the truth."

The old rules of marketing and advertising still apply, too: "The genius is not in the choice of medium: in the simple idea of using social media to fight social media," remarks Deighton. "It's in the quality of the idea." When all is said and done, "United Breaks Guitars" is a funny video with a catchy tune (in fact, Carroll credits it with "breaking" his music career). Sounds a lot like an old-fashioned television commercial, doesn't it?

About the author

Julia Hanna is associate editor of the HBS Alumni Bulletin.

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Comments

    • Anonymous

    Yaaaaaaa! Something now in marketing class.

     
     
     
    • Susan
    • CEO, FundHer

    Interesting question raised that I'd like to see discussed/debated: Is social media better at creating or destroying a company's value?

     
     
     
    • Arun Sinha
    • Access Consulting

    How much did United's sales suffer as a result of the video? Had United kept a low profile and waited it out, as some of your students recommended it do, what would have been the damage to the company?

    When examining social media, far too much attention is paid to the process - "Hey, look at the cool video this guy put up about United!" - and not enough to its actual consequences.

     
     
     
    • Steve Sheinkopf
    • CEO, Yale Appliance

    United blew it.

    This has nothing to do with Twitter, if you study the case and watch the video. It has everything to do with the most basic customer service

    They broke his guitar, stonewalled him about simple repair/replacement and did not rectify the issue. Further they did not address this guys video until it was way too late

    Thus, he felt compelled to create a pretty funny video. This is a harbinger of the future. Yelp, Google, Facebook, Citysearch all have their reviews of your business, which can cause pain if not handled properly

    Digital or written....the tenets of customer service recovery are the same

    1. Empathize....CALL do not Tweet

    2. Offer a reasonable solution

    3. Effect solution immediately

    4. Follow up

     
     
     
    • Anonymous

    I'd like to see a discussion surrounding the point of intersection between the negative potential in social media to erode value, and the old chestnut of "there's no such thing as bad PR".

     
     
     
    • Carl Nielson
    • Managing Principal, The Nielson Group

    To Arun's point, there is no data to suggest the incident had any impact on the business (stock price, sales). Where is the connection? While the Marketing Department might be angry with the execs/mgmt accountable for Customer Service, is this all about nothing more than a customer service issue that happens thousands of times a day? One person gets creative and has a moment of glory. So? United Airlines and every other company will respond to the squeaky wheel, which tends to reinforce everything from creative use of social media to inappropriate displays of anger. If the right person had been in the right job as a first line of defense upon receipt of the complaint, none of it would have happened. It isn't a training issue. It isn't a Customer Service Policy issue. It is a talent management issue. Marketing and Customer Service need to visit with the HR executive to review talent management strategies (which includes hiring strat egies).

     
     
     
    • Maria Botta
    • Freelance Broadcast Producer - EMBA Student

    I am so pleased that someone FINALLY wrote a case on this incident. I presented it to my Marketing class in my EMBA Program at Thunderbird this past January, as part of a discussion on Groundswell. To me it is one of the best and funniest illustrations of the Groundswell phenom and the changing dynamics of advertising and marketing, from a one way conversation with consumers to a two way conversation.

    Thanks,

    Maria Botta EMBA Thunderbird School of Global Management

     
     
     
    • christian
    • SociaLens

    Having followed this case for a while now, it seems that there were two related missed opportunities:

    1) the customer service folks should have been digitally fluent enough to hear the words "musician" and "YouTube" in Carroll's initial communications (musicians tend to get a lot of play on YouTube), and to realize that the issue should have been escalated more quickly.

    2) those same folks would ideally have been digitally fluent enough to consider approaching Marketing/PR about asking Carroll to write/perform a "United Fixes Guitars" video.

    While the real situation was probably more complicated than it appears to those of us on the outside (as one example, i can see why United might not want to publicize the fact that they are the airline that fixes any broken item), any organization will do well to ensure that all of their employees are in touch enough with digital culture to see warning signs and opportunities like these.

     
     
     
    • Corbette
    • Lecturer, Vanderbilt

    "Anonymous" makes a great point about the potential value of negative PR as the NYT made clear this past weekend in its article about cyber bullies. Given the impact of search engines on customer purchases (i.e. companies that rank high in search results achieve high sales) , "there's no such thing as bad PR" may be more true than in the past.

     
     
     
    • Water Pressey
    • Chairman, PCCM/IDI

    The social media phenomenon has changed how companies are managed. If you haven't got a case on the highly successful use of You Tube by Dominos to combat a derogatory posting on the same media by two bored employees on Easter Monday 2009 you should. It would make a great companion case.

     
     
     
    • Peter B
    • Managing Director, Gladstone Marketing Group

    One thing for sure, social media is enabling and quick. A fraction of a generation ago, picking up on corporate blunders was for those committed to writing letters and making phone calls. It took real commitment to get past filters such as Editors or the Executive Office "complaint specialist." Now all blunders are fair game. So where do blunder come from? Is there a financial impact?

    It actually starts at the top. Companies that arm employees with policies to hide behind discourage initiative and problem solving. After all, why risk to deviating from policy when 'policy' is Twitter proof? Does a company with an enabling culture that rewards initiative have as many blunders? Are they still social media targets?

    How about the case of the family that was returning from vacation and dad got locked out of the plane? The gate attendant shut the door 8 minutes early because policy allowed it. A blunder, a pc, and two hours in an airport is a volatile mix. However, it was diffused when dad realized he had the car keys. A quick call to the kids on the plane then alerted the cabin crew, who alerted the pilot, who let dad on the plane. The pilot was empowered to open the cabin door. For the next three hours in the air I was only focused on thanking the pilot.

    You can hire smarter people, subject everyone to more class room hours and command them to be nice to customers. Its all helpful and probably prudent. In the end, unless it starts at the top with good role models like the pilot, there will be more social media targets (like the gate attendant playing it safe) for the social media inclined.

    So, to Arun Sinha's point, are there measurable consequences from social media assaults? Has anyone seen a business case for companies prospering through barrages of negative stories as told first hand by the offended ... and their 'friends'? One qualifier, the case can not predate social media.

     
     
     
    • Anonymous

    Social media continue to create an excellent media strategies and this will drive brand perceptions from time to time. The case under discuss can be viewed from two way communication and its impacts on the viewership will create a better understanding of the objectives behind such scripts. Thank you.

     
     
     
    • Anonymous

    Good grief, whatever happened to doing the right thing, as in the time-honored Golden Rule? That trumps all considerations of risk/cost avoidance, at least within the scope of relatively small claims like Mr. Carroll's. As I understand it, United was totally at fault, so they should have cheerfully made the customer whole without delay. Yes, social media present a new reality, but the underlying ethical issues are really the same as before.

     
     
     
    • stefano
    • deputy director strategy

    A lot of what said it's true even if from different sides.

    Unfortunately what should be bothering all of us is that we don't care.

    Till the moment unsatisfaction clearly and publicly rises we don't care.

    It's more than a marketing case, HR, talent, fast reaction, etc. it's showing how low is the care for honesty and assume responsibilities.

    A good read should be NonViolentCommunication to reboot human consideration. But it's a minuscule drop in the ocean.

    No marketing or companies rules will change what humans have learned and apply since early days at school, within their families and friends.

    It is not even a social media or not thing. It's just showing the lower level of humans.

    We don't care! And the business goes on and on with this, because companies, the majority of them, don't assume their mpre complex role of educators.

    Companies should assume that they don't have just a single objective: make profit.

    They should have realized that the model is more complex. But it is not so surprising they are stil not there when still they try to incentive people on carrots and sticks.

    So no surprise that people try to hide, to forget and to deny errors. It's the sticks syndrome. "Drive" could be helpful to question this model. We incentivate and pay for results not efforts. This orientation is firing back a lot of care to get the results and less care on how to get them.

    Profit, market shares first and customer satisfaction behind.

    No surprise, this is a world that still is thinking that profit is a manageable cause instead of being merely an output of a more complex and systemic cause.

    We are still looking at P&L and the profit they are producing instead of the actions that will support/guarrantee the profit.

    Learning from a lot of 4 years plans and budgets meetings that starts talking about financial theats, volumes, turnovers, market share, rsp, etc. and just when all minds are obscured by fatigue we start discussing and evaluating actions/experiences that customers are exposed to and that they will pay for to produce the expected profit.

    So one angry person on millions, no problem it is a matter of days of angryness and then it will be forgotten. Humans tend to forgot worst than this... very unfortunately.

    Maybe listening, learning and applying some of Ken Robinsons' thoughts could help too. It is also a question of people that are deeply not satisfied with their function within a company. Yet we still promote the vertical satisfaction only. And we talk pyramidal when in fact we think triangle so bidimensional instead of 3D colplexity and opportunities. It's about give people the motivation that everyone is key to reach good objecvtives. But then we have to show how to share the results of good success.

    So you see I think it's more complex than just a broken guitar, a lazy airline response and a social media new power to reclaim customers's respect.

    We don't care because it's a careless society we are in.

     
     
     
    • dennis
    • 68 graduate

    what may be lost here is the shear scale of this issue that faces United ( and many others) with 100s of thousand customers daily and the inherent propensity for real and alledged mistreatment and "loses" suffered by those travellers. Add the viral abilities of compliants, one can only imagine the daily compounding of tweets, you tube vids, etc and the challenge to address them in any kind of traditional manner--as some responder said- "reasonably, fairly, timely". When you are flying someone cross country for $150, how much can you afford to be carefully responsive to every tweet or yelp?

     
     
     
    • Anonymous

    In response to a previous posting that United should call and not tweet. The rest of the world will not know that you called to rectify the complaint. Since the complaint was public then then resolution should be public to ascertain the public's trust and perception of your brand.

     
     
     
    • Jonathan Salem Baskin
    • Author, Histories of Social Media

    What glorious nonsense! If United Breaks Guitars is a teachable case, it's a case of incomprehensible analysis and dumbstruck advocacy. There's no evidence that the incident had any effect on United (in the short or long term), though it was fascinating to anyone who sells or implements social media monitoring tools/programs. Every argument about some residual influence (via search or consumers' subconscious) misses the core point of the exercise: namely, the incident didn't tell travelers anything new or different about United (or any other airline). It doesn't matter how catchy or momentarily fascinating the expression might have been. The substance just didn't matter, so it wouldn't have mattered if United bought the guy a new recording studio.

    I find the argument that social media are some 'warning system' or tool for customer engagement (getting info or providing it) hard to defend. Does anybody think that the vast majority of complaints that emerge on Twitter weren't predicted if not forecasted outright by management decisions? Brands aren't leaning anything new via this media as much as affirming what they already knew; namely, that the vast majority of consumers would quietly tolerate degraded product quality, service, and support. The residual/atmospheric/ethereal effect of online complaints? Nobody cares since anybody who might complain is already complaining.

    What does the United case mean? Nothing, other than digital marketing has gotten so distracted and confused that it risks losing touch with the real drivers of business.

     
     
     
    • Michael Musgrove
    • Managing Director, NexusOne Consulting

    If anything this case illustrates how particular industries are more/less elastic regarding the impact of social media. I can't see how this instance would have realistically harmed United, and if anything, gave them exposure and an opportunity to emerge as heros. Or at least providing better service in an industry that's notorious for poor service.

    Customers approach news such as this with a "as long as it's not me" attitude, and go about on their merry way buying on price/convenience, and reflect back on a catchy tune about some poor sap and his guitar.

     
     
     
    • Bob Carroll
    • Professor, School of Marketing and E-Business, Seneca College

    I've shown the video to about 8 sections of marketing students over the last year. 1. Social Media creates brand risk for large brands, and opportunities for smaller ones. (See, for example, the excellent video response by Taylor Guitars.) 2. United suffered damage: read the thousands of angry comments on YouTube. Or watch the Wolf Blitzer piece on CNN.
    3. The problem at United wasn't social media, it was customer service. The problem didn't start when Dave released his video! 4. Interesting how main-stream media picked up the story at about 150,000 views and helped propel it to millions. (and no, Dave is not a relative.)

     
     
     
    • John Deighton
    • Professor, Harvard Business School

    Thanks for a rich set of responses, which will help us when we and others teach the case in the future. I'd like to underscore Bob Carroll's point. This case is about United Airlines, yes, but, more important, it is about the Dave Carroll brand and the brands of companies like Taylor Guitars, FlyersRights.org and RightNow Technologies, who were quick to capitalize on the incident. Small brands struggle to get noticed, and Carroll's video presented an opportunity for them to do just that.

     
     
     
    • DR NIKHIL ZAVERI
    • Director, SEMCOM Institute, India

    This really calls for situation analysis in this new"Digital" environment where everything is transparent speedily. Hence, correction has to be transaparent speedily. Response, and Compensation are fine, but, more imprortant is "genuine" promise that this will not happen. Hence, futuristic action wil appeal to the people, and potential customers. Along with what United did, they should have expressed that it will not happen again, and for that, what administrative actions have been planned for to avoid this type of situation is required to be expressed. This will be appreciated by the potential customers. In this kind of incidence, future "Brand Erosion" has to be protected through genuine initiatives. If United is able to establish "trust", they will win the situation.

     
     
     
    • Ranjit Nilacanta Venkata
    • Harvard

    First off, its hilarious to hear that this guy made a video for $150 and grabbed the attention of a Billion dollar corporation like "United" using internet as his favorite belvedere. The end of the day, he got his compensation and he is also fighting for another guy who faced a similar fortune but my question is

    " Does United intentionally break everyone's guitars?".

    Sometimes, such things happen and they are termed "mistakes".

    I dont remember the musician's name but was he so careful from his infancy to adulthood that he handled everything so carefully his whole life and managed not to break even a drinking water glass?

    Things break/get misplaced during travel.

    I definitely agree that the concept of grabbing attention of a billion dollar company with a mere $150 is pretty interesting because he chose to pick mass broadcast/multicast on the internet and other crappy social networking websites but

    "Be a human and understand that people dont break guitars intentionally unless you bother them with your music" .

    There is always a better approach to such situations than spoiling the reputation of such a big corporation by resorting to cheap social networking propaganda.

    If such things keep happening, the reputation will be lost, companies go bankrupt which directly affects the employment rate and the economy.

    Does that guy give his pocket penny as a bail out to companies if they turn upside down?

     
     
     
    • Andy Kaplan
    • Chief Financial Officer, DonorsChoose.org

    It used to be, that as part of running a business, you dare not take an action that would embarrass you if it showed up on the front page of The Wall Street Journal. Of course, this could only happen if the journalist was interested in your story and the gatekeepers (editors) would select it for publication. Fast forward to today, and the world of social technology, and you can take the journalist and editors out of the picture. In addition to using YouTube, there are a wide range of easy to use digital platforms to get your message out. I'd suggest that in addition to burning cycles on how to respond to these things, that firms think about what policies and practices should be changed, in order to prevent customer complaints from getting to the point where they are effectively, asking the pubic to help them get the attention of the company.

     
     
     
    • Ali A Soomro
    • student, IBA jamshoro univsrsirty of sindh

    its a no doubt a digital era and everyone is spending more time online. while talking about the effects that social sites can create on the brands. From my view point it is a powerful tool for today's marketing world,You are saying that parody has a negative impact while it had worked more better than formal way of presentation in creating brand equity, for example take a campaign launched by pepesi in PAK in the month of ramdan," Kis ne kaha tha Pepsi pe panch rupe kam kardo' translating who said to reduce 5 rupee on Pepesi.Another example take parody of Shakira video "whenever", after watching it people always attracted to this and ask about orignal video and singer.

     
     
     
    • Anonymous

    Your study would not be complete without researching the difficulties professional musicians have flying to locations to play with their instruments intact. This was not an isolated incident. It spread virally because everyone had either had this happen to them or knew of someone it has happened to. Even the most secure cases can't save a multi thousand dollar fragile instrument when untrained, uncaring workers throw them around. Especially after 9-11, the airlines became very arbitrary and inconsistent about allowing professionals to bring their instruments aboard as carry on, making it extremely difficult for professionals to earn a living. What your case study doesn't seem to be aware of is that this went far beyond a YouTube phenomenon. It brought the situation to the attention of a much broader audience than before and has galvanized suport for a fair and uniform policy. The American Federation of Musicians tried to work out a consistent policy with airlines and fought for language to be included in the Senate version of the FAA Reauthorization Bill (S.1451) that will streamline the airlines' carry-on policies regarding musical instruments. If this bill passes musicians will be able to carry most musical instruments on board and place them in the overhead compartment or in a seat (if a ticket is purchased). This would be an interesting topic to explore interdepartmentally. The music department, business school and communications faculties could give you a more complete understanding than just looking at it from the business side. I know from all my professional musician friends that this issue has definitely affected which airlines they choose to fly with.

     
     
     
    • R. Prabowo
    • ipmi

    Things that came up when I used this case in class were factors that support a video to drive so much attention, which in summary breaks down to the following factors: - context: United's poor service has hurt many customers, resulting a mass of viewers than could relate to Carroll's experience - content: the message itself - message packaging: the message was presented humorously and through songs that enjoyable to follow - messenger: Carroll's position as a musician as well as a typical passenger (not a famous & rich musician) drove sympathy