COI: Cost of Inaction United Breaks Guitars

United Airlines broke a guitar. What ensued online was comprehensively a brand trashing and demonstrated what happens if you don’t pay attention to social media – even just monitoring it – it can cost your company $180,000,000. This is a follow on from my posts on Cost of Inaction, also Steak and Shake and Apple vs Engadget.

Dave Carroll’s guitar got broken on a United plane flight. If you watched the video, you’ll know he got the run around before being told NO. So he wrote this song, recorded it, made a video and popped it up on YouTube.

  • 3 million views within 10 days, 5 800,000  views now – and 36,500 ratings (5 out of 5), 22,700 comments. (Mashable)
  • In Google search, just under 20 million returns for “United Breaks Guitars” (GoogleOpens in a new tab.)
  • Number one downloaded song on iTunes (Toronto StarOpens in a new tab.) after only a week
  • When I scanned through, BoingBoing, Mashable, The Huffington Post, and traditional media like the Telegraph (UK), Rolling Stone, LA Times, and Australia’s Crikey, Sydney Morning Herald, Brisbane Times, etc  had picked up in the story.
  • $180 million dollars lost in share price. (see later)

I think UnTied Opens in a new tab.the anti- United community is an interesting development (was around before this incident though).

The Times Opens in a new tab.claims that it cost United 180,000,000 smackeroos because the share price plummeted.

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 Huffington PostOpens in a new tab. disputes that claim:

it’s borderline silly to suggest that a something like a cheeky web video could move such a prominent stock 10 percent. United is an enormous, struggling company, with a stock price that has been on a downward trend since last fall. In other words, it’s a typical airline stock.What do you think? Is there any way Carroll’s song could have cost United $180 million? What kind of damage did it do to United’s brand? How do you value bad PR like this?

My response? Apple lost 4.6 billion dollars market cap when Engadget blogged something negative withing minutes of the blog post. Not exactly the same as a silly YouTube video but you can never be sure of the market…

Apple stock engadget chart

C.O.I – the cost of sitting there saying that social media is for people with too much time on their hands, and that no one need  pay attention to Loser Generated Crap. A dangerous place to sit, indeed.

Laurel Papworth

Named by Forbes™ Magazine in the Top 50 Social Media Influencers globally, named Head of Industry, Social Media (Marketing Magazine™) and in the Power150 Media bloggers (AdAge™). CERT IV Training and Assessment certified trainer (Diplomas and Certificates etc) Adult Education. Laurel has manager Facebook Pages for Junior Masterchef, Idol, Big Brother etc. and have consulted on private online communities for banks Westpac, not for profits UNHCR & governments in SE Asia. Lecturer, social media, University of Sydney for 10 years and Laurel has 11,000 online students. Laurel Papworth personally connects to 6 million followers online and has taught around 100,000 people in the last 10 years how to be social media managers.

14 thoughts on “COI: Cost of Inaction United Breaks Guitars

  1. Brilliant synopsis of a brilliant ‘customer fights back’ story, Laurel. Haven’t seen anything as creative & damning since Jonah Peretti took on Nike’s sweatshops in the early noughties.

    The major challenge for organisations is that their processes have been established to nullify / eradicate customised human intervention. Unfortunately for them, that’s what social media is all about.

    The aircraft carriers are starting to turn but it needs enlightened people at the helm.

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