I’m admittedly late to this party, but I caught wind of this story today and felt it was waaaaay too powerful not to share. As is usual for me, there’s a powerful moral to the story that companies would do well to heed: the value of your brand is directly proportional to the level of customer service (read: experience) you provide. And when that level of service is bad, social media will spread the word like wildfire — and will burn you badly.

And now, sit back and enjoy the tale of how one Dave Carroll and a little YouTube video he made cost United Airlines a measly $180 million dollars.

In 2008, Dave Carroll was flying United Airlines with his band Sons of Maxwell when a passenger sitting next to the window exclaimed that the baggage handlers were “throwing guitars out there.”

Carroll’s $3500 Taylor guitar was broken. He spent the next nine months in a service maze pursuing compensation. Eventually, customer service at United Airlines told him they were closing the incident and would not respond to any further emails. “They didn’t deny the experience occurred but for nine months the various people I communicated with put the responsibility for dealing with the damage on everyone other than themselves and finally said they would do nothing to compensate me for my loss,” Carroll says. “So I promised the last person to finally say no to compensation (Ms. Irlweg) that I would write and produce three songs about my experience with United Airlines and make videos for each to be viewed online by anyone in the world.”

Carroll hoped to achieve a million views – among all three combined. But he did much better. The first song, United Breaks Guitars, hit one million views within one week, and is at six and a half million views at last count.

During the resulting media frenzy, United’s market capitalization dropped $180 million over the next three weeks. As in fifteen days.

Had United spent a few dollars to replace Dave’s guitar – and had they promoted that action to any number of high-profile Facebook and Twitter posts (including those to their own accounts) – they could have saved millions.

Dan Greenfield of Social Media Today posted some compelling numbers back in July here. I checked out his research and did some digging today to get the latest numbers:

United Breaks Guitars YouTube (ONE video)

Views: 6,277,961
Comments: 37,725

United Airlines YouTube (The ENTIRE Channel, 6 videos)

Views: 89,577
Comments: 353

You don’t need me to interpret those numbers. You know as well as I do what they mean. To their credit, United does have a Facebook page…but it’s “unofficial.” A lost opportunity to engage with the more than 11,000 fans.

In comparison, Southwest Airlines’ Facebook page is more than 95,000 fans strong – and hey, it’s official.

As United learned the hard way, the Internet is an open platform for critics that gains critical mass at an unfathomable pace. To ignore this kind of groundswell is corporate suicide. United Airlines could not – or did not want to – keep pace with public reaction. Their traditional news channel remained silent during the majority of the aforementioned media frenzy. Their YouTube Channel – which consists of repurposed commercials – has essentially become a platform for harsh, negative commentary (and they still do not respond in any way, shape or form). The half-dozen posts they did eventually place on Twitter fell hundreds of miles short of anything smacking of an authentic, heartfelt apology. Even the charitable donation United made at Carroll’s request, while certainly an appropriate gesture, wasn’t enough – because it did not address the the problem that prompted Dave Carroll to make a video in the first place.

Shaun Rein, freelance writer for Forbes magazine, delivered one of the best quotes I’ve heard on this debacle:

“In today’s economy you can’t get by on decent prices or acceptable service.
You have to stand out and win the hearts of your customers. To do that you
have to go beyond satisfaction to true loyalty. You have to provide a compelling
reason, beyond basic service and price, for consumers to choose you. And your
organization must be unified in that mission. Otherwise, you may be the next
to follow GM into Chapter 11.”

Plenty of online pundits have defended United, saying that responding publicly to any number of social media posts on the topic would only further erode an already declining brand. People have insisted that the web is fluid, and as such the immediacy of an event passes, its impact lessened.

That all may be. But in the age of the permalink, the stories remain forever committed to the webosphere. And all things being equal, most people will choose to fly the airline that doesn’t break guitars.