Marketers and Producers are no longer in the unassailable position they were a few decades ago. They can’t treat even a single consumer badly, without facing the joint wrath of the larger public who will empathize with this single consumer who saw some kind of injustice from a brand. So instead of facing the wrath of one consumer often companies will have to face the anger of a much wider universe.
The United Airlines incident is a great example of the company still being nonchalant inspite of the consumer anger the incident sparked of dragging an Asian doctor off the plane. In the 70s we had Ralph Nader, American political activist, author, lecturer, and attorney, noted for his involvement in consumer protection, environmentalism, and government reform causes. He who took up the cause of the consumers and represented the consumer dissatisfaction with companies at large. But social media changed all that. Now consumers don’t need a representative. They can express their anger at the very instant they feel it, thanks to social media.
United Airlines saw its shares drop more than 4 percent in early Tuesday trades after a leaked memo from Chief Executive Oscar Munoz praised the airline’s move ( see memo below ) to forcibly drag a passenger off an overbooked flight. A company losing its market cap is the ultimate justification of consumer anger. Stock in United Continental Holdings dropped by more than 4% at one point with nearly $1bn loss in market cap. Thats a good price to pay for not being polite with your consumers, and justify a situation that was seen as wrong by everybody watching the horrific video of Dr David Dao, the passenger in question. Oscar Munoz’s memo clearly lacked empathy with the passenger.
Like you, I was upset to see and hear about what happened last night aboard United Express Flight 3411 headed from Chicago to Louisville.
While the facts and circumstances are still evolving, especially with respect to why this customer defied Chicago Aviation Security Officers the way he did, to give you a clearer picture of what transpired, I’ve included below a recap from the preliminary reports filed by our employees.
As you will read, this situation was unfortunately compounded when one of the passengers we politely asked to deplane refused and it became necessary to contact Chicago Aviation Security Officers to help.
Our employees followed established procedures for dealing with situations like this. While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right.
I do, however, believe there are lessons we can learn from this experience, and we are taking a close look at the circumstances surrounding this incident. 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.
Oscar Munoz was criticized after his official statement on Monday described the violent removal as an effort to “re-accommodate” passengers. He also described the man as “disruptive and belligerent”, a description that was challenged by people sitting next to Dr Bao. As the company’s share prices plunged on Tuesday, however, Mr Munoz turned attention back on to the company.
Sean Spicer, the White House press secretary, said “I don’t think anyone looks at that video and isn’t a little disturbed that another human being is treated that way,” he told reporters. “Clearly watching another human being dragged down an aisle, watching blood come from their face after hitting an armrest or whatever, I don’t think there’s a circumstance that you can’t sit back and say this probably could have been handled a little bit better, when you’re talking about another human being.”
All in all the United incident became a full blown bad PR storm, that will take the company more than a little while to recover. Its a great example of a local PR disaster turning into an international incident that has severe damaging effects on the brand.
Leaders of a key Senate committee have asked United Airlines and Chicago airport authorities to explain what led to Sunday night’s forced removal of a man from a United Express flight.
United’s explanation “has been unsatisfactory, and appears to underestimate the public anger about this incident,” four senators wrote in letters Tuesday to United CEO Oscar Munoz and Ginger Evans, commissioner of the Chicago Department of Aviation.
Negative Effects of Bad Publicity
Jan Curlzon ex CEO of SAS first popularised the concept of moments of truth. Moments of truth are those interactions where customers put in a high amount of energy to reach a satisfactory outcome. A company could have thousands of moments of truth in a single day. Whether adversely or favorably, they incredibly affect companies’ relationship with customers and their perception about the brand. EI (Emotional Intelligence) is an important factor when it comes to serving customers specially while dealing with emotionally charged moments.
When facing negative publicity, any company has mainly three response tactics:
- Denial and rejection of all allegations
2. Acknowledgement of product failure or misconduct with a justified refusal to remedy the situation
3. Quick acceptance of the allegations with a voluntary proposal to remedy the situation
Independent of the tactic used, it has been argued that the speed of the response is critical for the company to achieve a favorable public response. Moreover, in the past years, and due to the increase on the amount of information available, a denial and rejection response has rarely worked in convincing the public. Unfortunately United Airlines chose no 2 above instead of no 3.
As it so happens, United might have millions of $ to pay for a mistake that could have been rectified with a few hundred dollars. By raising the price or reward for getting 4 passengers of the plane. A very expensive mistake.