How To Turn a Service Problem into A PR Humiliation
United Breaks Guitars” is a protest song by Dave Carroll and his band, Sons of Maxwell. It chronicles a real-life experience of how his guitar was broken during a trip on United Airlines in 2008, and the subsequent reaction from the airline. The song became an immediate YouTube and iTunes hit upon its release in July 2009 and a public relations embarrassment for the airline.
Musician Dave Carroll alleged that he and fellow passengers saw United Airlines baggage-handling crew throwing guitars on the tarmac. He arrived at his destination to discover that his $3,500 Taylor guitar had a broken neck. In his song, he sang that he “alerted three employees who showed complete indifference towards me” when he raised the matter in Chicago. Carroll filed a claim with the airline, and was informed that he was ineligible for compensation because he had failed to make the claim within the company’s stipulated “standard 24-hour timeframe”.
Carroll says that his fruitless negotiations with the airline for compensation lasted nine months. Then he wrote a song and created a music video about his experience and two sequel songs related to the events, “United Breaks Guitars: Song 2”, released on YouTube on August 18, 2009, and, in March 2010, United Breaks Guitars: Song 3, in which he warns United that they must improve customer service or risk losing all their customers.
After the YouTube video was posted on July 6, 2009, it amassed 150,000 views within one day, prompting United to contact Carroll saying it hoped to right the wrong. The video garnered over half a million hits by July 9, 5 million by mid-August 2009,and 10 million by February 2011.
Bob Taylor, owner of Taylor Guitars, immediately offered Carroll two guitars and other props for his second video. The song hit number one on the iTunes Music Store the week following its release.
Belatedly, Bob Bradford, United’s managing director of customer solutions, telephoned Carroll to apologize for the foul-up and to ask if the carrier could use the video internally for training. United mentioned it hoped to learn from the incident, and to change its customer service policy as a result of the incident. But The Times reported that the belated compensation offer of $3,000 which was donated by United to the Thelonious Monk Institute of Jazz as a “gesture of goodwill” failed to undo the damage done to its image.
In December 2009, Time magazine named “United Breaks Guitars” #7 on its list of the Top 10 Viral Videos of 2009.
In January 2012, Carroll and “United Breaks Guitars” were featured in the CBC/CNBC documentary Customer (Dis)Service.
The Times newspaper reported that within 4 days of the video being posted online, United Airline’s stock price fell 10%, costing stockholders about $180 million in value. While it is debated whether this was due to the video, the debacle has now become a case study in the damage that non responsive, inflexible an
Customer (Dis)Service and Marketing
“Customer (Dis)Service,” a one-hour CNBC special took a hard look at the state of customer care across a range of touchpoints including in-person and telephone, and looked into the impact of social media on business through the lens of customer feedback.
The report examines the shortcomings of some aspects and practices defining typical customer service experiences, highlighting the fact that a lot of people are upset with the way customer service works today.
Why Service Is the New Marketing
Customer conversations about experiences with the sales process, product or service, or with customer service, invariably find their way onto the social web. Of the three, customer service drives the majority of these conversations.
How does this connect to marketing?
- The mainstream adoption of social technology as a primary customer communication channel is here.
- If your customer service is lacking, you risk alienating and activating an increasingly connected customer base, an expensive mistake.
- People are more likely to write about what happened when they talked with a customer service agent about an issue than post about the initial issue itself.
- Few people expect “absolute perfection,” but most people do expect a simple, pleasant, and effective resolution to a problem.
Social Amplification: The social web amplifies or dampens the power of your marketing programs. Fast Company notes that according to one market research firm, each time a consumer posts something on the social web it reaches a minimum of 150 people. 500 billion word of mouth impressions on the social web each year in the US rivals the reach of ads. And if a negative conversation develops post-purchase, that conversation becomes a factor in the purchase decision of the “next” customer.
Negative Conversions Hit Your Margins: The impact of negative conversations is higher-than-needed marketing spend and lower-than-expected sales. Additionally, the expense of call-backs and longer-than-necessary interactions with customer care result in a measurable and significant hit to margins.
Trust: According to Zuberance, 9 of 10 online consumers say recommendations from friends and family members are the most trusted form of advertising worldwide, while only about 2 of 10 trust online ads. This makes advocates’ recommendations the number-one influencer of purchase decisions and brand perceptions in nearly every product category. The survey shows that 89% of advocates said their friends buy or consider purchasing the products and services they recommend. Bearing in mind that the best brand advocates are those who have had positive interactions with the brand, including Customer Service interactions, clearly, Marketing has a real interest in partnering with Customer Service to drive the brand’s value proposition to the most loyal customers.
Why the Service Disconnect?
Surely, United saw what was unfolding. Then why did they, like are so many brands, not move faster to seize the social web opportunity?
Shift in perspective: Advertising, PR, and marketing communications have long been the controllers of the brand image.
Idealized vs. Real: Celebrity endorsements, favorable studies, contrived customer scenarios, and other advertising tactics seek to present an idealized view of some underlying benefit associated with a product or service. When, in real life, some disappointment results, it’s discordant and easily ignored.
Consider the AT&T spot showing the young man in a New York subway. He sees a girl on a train leaving the station. She flashes her phone and shows him the concert she is on her way to. He quickly uses his AT&T smartphone to find and purchase a show ticket and then boards the next train. Now let’s cut to reality, and the fact that most phones don’t work in the subway, and even if they do it takes longer than four seconds to search, find, and purchase a concert ticket. How many negative customer service calls – beginning with “I can’t do what you said I could” – did that ad generate? Every one of those calls took a bite out of AT&T’s margins as well as AT&T’s brand reputation.
Organizational alignment and employee training: ClickZ highlights this article about a Best Buy customer who approached a store manager at the direction of Best Buy’s Twitter-based Twelpforce, only to be told by the out-of-touch manager that social media as unreliable and “Twelpforce could be anyone.” Considering that Best Buy is a leader in the push for the integration of social media into its support processes, we can’t blame Best Buy entirely for the disconnect. The story illustrates how difficult it is to get everyone in the loop.
3 Solutions To Build Service Marketing Synergy
1. Train Your Customer Service Team To Be Brand Advocates
Dave Evans invites us to imagine “three levels of customer service agent enlightenment:”
Level 1: Uncaring – In the first level, the agent sees his or her job as getting the customer off the phone as quickly as possible, as in this YouTube posting of an actual, quite dismal interaction between an agent and customer trying to cancel an account.
Level 2: Sympathizer – The second level is marked by a genuine desire on the part of the customer service agent to resolve the issue. While this is probably representative of most professional care agents, there is often a company policy that prevents the agent from resolving the issue. Consider whether the company makes it easy:
- For customers to connect and explain an issue?
- For customers to request escalation?
- for agents to be empowered to think on their feet?
Level 3: Brand Ambassador – The third level is one in which agents are fully aware of their potential and able to convert service callers to brand advocates. About this, Evans notes:
Very few customers expect absolute perfection. Customers expect support, compassion, assistance, and help. This creates an opportunity for suitably trained and empowered agents. When agents both understand the brand positioning and are empowered to resolve issues they can actually move a customer from an initial attitude of “complaint” to an ultimate attitude of “Wow! Thank you!” Combine that with the true drivers of social media conversations – not the issue itself but the resolution of that issue – and the path to building advocates is obvious. Zappos built aprofitable business on the fundamental notion of creating “Wow!” experiences through customer care. You can too.
2. Bring Marketing and Customer Service Together
Although Marketing and Customer Service are usually separate departments and have separate goals and methods, the adoption of Customer Relationship Management is starting to change that for various reasons. The Database Marketing Institute names a few:
- Industry has discovered the value of loyal customers: they buy more, buy more often, are cheaper to serve, have higher retention rates, and are more profitable than newly acquired customers.
- Marketers have discovered that it is possible to influence the level of customer loyalty through two methods: recruit the right kind of customers to begin with, and treat them very well once acquired.
- Excellent customer care is the most important method for improving customer loyalty.
- Customer service personnel are the front line troops in the battle to win customer’s loyalty.
- To provide good customer care, customer contact personnel have to be empowered with information and the authority to make decisions and to act in the customer’s behalf.
Marketing is no longer a business of thinking up clever advertising and direct mail pieces, and Customer Service is no longer a business of calming irate customers . Good marketing involves everyone in the company who has contact with customers.
Forging a meaningful relationship between Marketing and Customer service will work two ways: Marketers will build the customer care program into their marketing plans, and start leveraging those interactions to build brand advocates, while Service will reflect the brand messaging and core value propositions in all their customer interactions.
3. Hone Your Focus On the Most Productive Customers
A large bank that divides their customers every month based on actual profitability discovered this:
- The top two groups representing 16% of the customers contributed 105% of the bank’s profits.
- The bottom 84% reduced the bank’s profits by 5%.
- The bottom 28% eroded profits by a total of 22%.
Why spend money trying to retain the bottom quintile who are robbing the company of value? By watering down our services to those things we could afford to give everyone, the services would be useless for influencing loyalty anyway. It’s better to provide superior service to the top two quintiles – the life blood of the enterprise – to retain them. By focusing more on them, we can give them services that we could not afford to provide for everyone.
Case Study: Customer Service Is the New Marketing
One profitable company cited by The Database Marketing Institute that traditionally published and mailed an annual catalog, waiting for inbound responses, conducted a six-month experiment:
Methodology: They divided the top 1,200 customers into a 600 customer test group, and a 600 customer control group. For the control group, inbound marketing was conducted as usual.
The test group employed outbound relationship building. They assigned one customer service specialist and one product engineer to call the decision makers, influencers, and product users in the 600 test companies. Rather than trying to sell or offer discounts, they provided helpful information, such as:
- Asking about customers needs
- Following up on bids and quotes
- Scheduling product training
- Reminding them of pricing specials
- Giving product comparison information
- Providing new product information & samples.
Results: After six months they tallied the sales to both groups, and found: T
- The test group had 12% more orders than in the previous six months, while the control group had 18% fewer orders.
- The test group placed 14% larger orders, while the control group, 14% smaller orders than before.
- The test group bought $2.6 million more than the control group during the six month period for a total cost of about $50,000.
That kind of ROI shows how well the best customers respond to friendship and relationship building.
Snap! Principle of Marketing Customer Service Synergy:
Establish a “symphony of touch-points to drive production among loyal customers.