Recall that I posted about Dave Carroll and the mishap with his guitar and United’s baggage handlers. His video on YouTube about his experience saw millions of streams.
Now the UK’s Times Online claims that the episode and subsequent damage to the brand caused by the widespread viewing of the YouTube video resulted in a drop in the market cap of United, essentially costing the airline $180 million:
Meanwhile, within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines’ stock price to suffer a mid-flight stall, and it plunged by 10 per cent, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars.
The airline’s belated decision to donate $3,000 to the Thelonious Monk Institute of Jazz as a gesture of goodwill (Carroll said he was beyond the point of accepting money) did nothing to contain the damage.
It’s unlikely that the Carroll-related bad PR single-handedly caused this. But let’s assume that it may have contributed to some set of factors that together caused investors to sell United shares. It’s an illustration of how costly bad customer service can turn out to be in the age of social media.
As I said before, an ounce of prevention . . .