United breaks Guitars; share price dips (allegedly)

by Justin Souter on July 27, 2009

I realise that for many of your seasoned observers, this is old hat.

However, having been told about this at lunch yesterday by Caroline’s Daughter and Son-in-Law, I thought I would have a look into this, as it appears to be part of a growing trend of smart people employing social media to get heard.

Long story short: United Airlines breaks musician’s guitar; musician claims restitution; gets stonewalled by United; writes song which goes viral on YouTube; United caves in; lots more people buy musician’s music.

The story can be read about here, on the Musician’s website; the video is below. At the time of writing, it has had 4,225,709 views.

Apparently United’s share price took a pasting, which has been attributed to the negative publicity.

There’s a bit of doubt about this here and here, but I think you get the general point! The fact that there is a debate about this demonstrates how important Social Media is becoming in determining reputations, and tipping the balance of power in favour of consumers.

The Times summarises the situation from United Airlines’ perspective:

The company is trying to put a brave face on things. On Twitter it admitted its mistake and announced that it was donating $3,000 to a music charity. A spokeswoman tweeted that she liked the video: “It is excellent and that is why we would like to use it for training purposes so everyone receives better service from us.”

And for anyone considering consumer complaint videos on YouTube in the future, Mr Carroll recommends the key of D.

 

  • UAUA took a pasting?? Did you look at the trend graph of the share price in June and July? You can barely notice the blip of the supposed “pasting”, as the price was moving in 20, 30 and 100% leaps before and after the guitar video posting!!
    We run a website that tracks company reputations based on social media input (http://www.vanno.com), so we obviously believe it its power and influence. But we were among the first to call out social media marketers pundits for the intellectual (and calculational) laziness that resulted in the overpromotion of this non-event.
    Social media is valuable and important, but it simply another way to measure consumer sentiment. And it is – like all other channels – possessed of its own biases and limitations.
    And as a final note, we have seen no case to date where social media has credibly and plausibly moved company share prices. We would love to see evidence to the contrary.

  • Nick, flattered that you commented – but did you see I had linked to your “The broken guitar had no effect on United Airlines” post?

    I am looking into Vanno as a tool for measuring reputation, and I think it is fair to say that the Web, and more specifically Social Media (e.g. tools like yours) are bringing such poor customer service[!] to a much wider audience.

    Many thanks for taking the time to give feedback, and good luck with your business!

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