m5 Marketing Blog

United Airlines a Case Study in How Not to Handle a Crisis

Posted by Tami Brouillette on Apr 11, 2017 4:09:11 PM

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Oh, United Airlines, how soon we forget the basics of crisis management.

This week when a video surfaced showing a passenger being physically dragged off a United Airlines flight Sunday after declining to volunteer to give up his seat and book another flight, the airline found itself the subject of ridicule, memes, and late-night fodder - and a case study for how not to handle a crisis.

For starters, the airline’s response to the incident was less than conciliatory:

United response 2.png 

“Re-accommodate” is to put it mildly, and Munoz has been widely criticized for his soft-pedaling of the event. Adding fuel to the fire, Munoz penned a memo to his staff that commended them “for continuing to go above and beyond to ensure we fly right,” and assured them that “Treating our customers and each other with respect and dignity is at the core of who we are, and we must always remember this no matter how challenging the situation.”

Clearly, Munoz’s definition of “respect and dignity” is a bit different than it is for the rest of us.

Update: Later on Tuesday Munoz issued another statement, this time an apology that included the customer who was mistreated:

It's good Munoz finally apologized, but it took two days, a lot of outrage, and a good deal of brand damage. That kind of misstep might be expected from a company that has never had to deal with a crisis and has no plan in place for dealing with a crisis, but United, let’s remember, became a case study for marketing students everywhere after the “United Breaks Guitars” incident in 2008-2009.

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Here’s a recap from Wikipedia:

"United Breaks Guitars" is a trio of protest songs by Canadian musician Dave Carroll and his band, Sons of Maxwell. It chronicles a real-life experience of how his guitar was broken during a trip on United Airlines in 2008, and the subsequent reaction from the airline. The song became an immediate YouTube and iTunes hit upon its release in July 2009 and a public relations embarrassment for the airline.”

The embarrassment over mistreatment of a $3,500 Taylor guitar pales in comparison to the latest incident in which a viral video shows a man, bloodied and being forcibly dragged off the flight by several United security officers while passengers voiced their horror at what was going on.

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The Cost of Badly Managing a PR Crisis

The Reputation Cost

As BP learned several years ago, mishandling a crisis by showing an apparent lack of empathy and failing to appropriately respond to public outrage is a recipe for disaster, leading to not only a financial loss, but a loss of trust in your company, and damage to your brand.

For United, that damage is pretty widespread right now.

First of all, the company is being mercilessly trolled by everyone from late night host Jimmy Kimmel to Merriam-Webster.  Kimmel made the incident the centerpiece of his monologue Monday, and introduced a new United commercial that said, in part, “You do what we say, when we say, and there won’t be a problem. Capiche?”

Meanwhile, Merriam Webster joined in, using the incident as a teachable moment about the meaning of “volunteer”:

But, of course, it didn’t stop there as the internet proceeded to do what the internet does best - mock companies when they make a misstep:

And people were happy to respond to the trending hashtag #NewUnitedAirlinesMottos

You get the idea.

The Financial Cost

The company stands to lose a considerable amount from the incident: There are the financial losses that will come from people declining to fly United in the coming days - as one would expect when a company loses customer trust to the extent United has, but there’s the hit to their stock as well. MarketWatch reported Tuesday morning that the company’s stock had fallen 3.7% (and as much as 6% in premarket trading), and was expected to end the week down 2.8%, reducing the market value of the company by more than $600 million.

And StockTwits posted a graphic on Twitter late Monday that showed how sentiment about United stock had plummeted:

According to consulting company Deloitte, 41% of companies that experienced a negative reputation event reported loss of brand value and revenue.

Be Prepared For a Crisis

In business, the very nature of a crisis is that it’s often unexpected, but that doesn’t mean you shouldn’t expect one and have a plan in place to address a crisis when it does occur. The bottom line is that you don’t want to be left scrambling if a negative PR event happens, so the best time to address a crisis is before it occurs.

There are a number of things United could have done at the outset: apologize outright; take the opportunity to better explain how and why they had to ask passengers to take another flight; and show more sympathy for the passenger who was manhandled. After "United Breaks Guitars," you would think United would have put a crisis response plan in place.

You should have a team assigned to come up with a strategic plan for dealing with crises. However, if you don't have a strategy and a crisis does occur, there are a few common sense guidelines to keep in mind:

Don’t lose your cool

You don’t want to write or say something you’ll regret. And in this age of social media, you can come to regret it pretty quickly. Think before you speak or hit “send.” As Warren Buffet once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Just one wrong comment on social media can do it, too.

Be polite

Yes, people may be rude (especially on social media), but try to be polite and respectful in your dealings with the press and the public. After all, it’s easier to catch flies with honey than with vinegar.

Be sympathetic

It’s not all about you (although it may feel that way). This is especially true if there are victims as a result of your business crisis. A perfect example of how not to act comes from BP’s Tony Hayward, who said, in the wake of 11 deaths and the contamination of the Gulf, "We're sorry for the massive disruption (the spill) caused their lives. There's no one who wants this over more than I do. I would like my life back." It’s harsh, but true: No one cares about you. They care about what you’re going to do.

Don’t lie

Just don’t. Good businesses are built on trust. Getting caught in a lie will cause further damage to your reputation, which will take even longer to fix.

And most importantly, learn from your mistakes. United didn’t – and this latest incident is sure to become another case study for marketing majors on how not to manage a PR crisis - coming soon, to a textbook near you.

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Topics: Customer Service, Crisis Management

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