How United Airlines Lack of Good Customer Service Cost - Case Study Example

Title of Paper Student Name Course Name Instructor Name Date Executive Summary This is a report about how United Airlines lack of good customer service cost the company its brand name, loss of customers and about 10million negative views on social media. A look at the case reveals certain issues ailing the company and they include poor customer service, misplaced priorities in the wake of financial crisis experienced by the company, poor communication approaches on the company’s part as well as the massive layoffs of staff due to the recession. The report also outlines specific causes of these issues with the major one being financial problems. Other causes included in the report are poor social media management, changed and misplaced priorities and lack of enough staff. As a recommendation to the company, decisions have to be made to improve the sorry state of affairs in their customer service department. To help assist in achieving this, this report outlines a decision criteria based on the company’s vision, mission, goals, values, measurability of alternatives, ability to improve customer satisfaction levels and the ability to mend the company’s image. The alternatives offered in this report based on the decision criteria will go a long way in helping making sure that the quality of service within United Airlines improves massively. Automating immediate apologies responses, measuring the quality of service using a survey and reconsidering the company’s priorities during financial problems are the alternative solutions offered by the report. Of these three alternatives, it is recommended that the company adopt the automation of immediate apologies messaging and measuring the quality of service. These two have been suggested because they both resonate with the decision criteria. Both suggestions will be implemented by top management under the supervision of the board of directors. They will also require financial input if the company is to achieve its customer service goals. As such, implementation will have to be budgeted for. The report also notes that failure to adopt these suggested solutions by United Airlines management will only exacerbate the poor customer service it has experienced after the ‘United Breaks Guitars’ song clip. Issues The video, a short song by Dave Caroll reacting to the customer care nightmare he received from United Airlines when the airline company refused to compensate him for damaging his $3,500 Taylor guitar (Carroll 2012, 18). What made the situation worse is that Dave tried every sort of compensation request for a whole nine months but the company answered his requests by a resounding ‘no’ every time. The financial health of the company was not looking good and had to make drastic decisions that saw it lay off workers, close offices and cancel planned routes (Clark 2012, 109). As part of these decisions, United Airlines had unbundled specific services that were included in the ticket price. Issues of customer service could be attributed to the lack of enough employees. Another issue related to United Airlines in this case would be the company’s questionable sincerity and compassion to customers (Clark 2012, 108). The fact that every level of management Dave communicated to, the airline put blame on everybody else except on themselves. They were not sincere as to who was responsible for the damaged guitar when it was clear from witnesses that it was the airlines baggage handlers who were responsible (Kotler and Keller 2011, 362). A third issue would be the lack of real-time communication and responses as well as recognizing the importance of face-to-face communication with aggrieved or unsatisfied customers (Swann, Patricia 2014, 224). The company had to wait until Dave made a video and posted it on the internet and then tried hard in dealing with social media rants and responses. A lot could have been saved had the airlines management just communicated with Dave as a person rather than waiting for things to get out of hand the way they did. Being an important aspect of any organisations business, complaints communication for United Airlines needs to be looked at critically and resolved if they are to retain their customers. Causes There may be so many reasons as to what caused customer service failure for United Airlines in this case. The recession that hit the economy did not spare any industry and United Airlines was affected greatly (Clark 2012, 120). Priorities for the company thus changed and customer service became less of a priority compared to financial priorities. Massive staff layoffs could have been a major cause for the customer service neglect. The rising cost of doing business in the airline industry could also have been a cause for the issues mentioned above. To the company, compensating Dave for his damaged guitar would have set an unwanted precedence where they would have to deal with so many other minor claims. They wanted to avoid this so they took a negative stance which unfortunately cost the company its brand name (Clark 2012, 121). The lack of a proper social media management can also be attributed to the way the issue spiraled out of control. With the emergence of social media today, it is important that organisations appreciate the speed with which information is shared among customers via social media platform. Once United Airline management had got information of Dave’s video going viral, a team should have been set up to deal with responding to the issue (Clark 2012, 1). This would have been taken as admitting guilt or being defensive but it would have atleast saved them face and customers. Better social media management taking the form of a bottom-up approach should be employed in the organisation as this would allow the airline company to increase customer engagement. This would even be of great help when communicating with unsatisfied customers because it would portray the organisation as customer friendly because of the direct engagement it would have with its current customers as well as would be customers. Decisions Criteria A look at the issues and their causes of United Airline’s customer service, it becomes evident that certain decisions should be reached by the company’s management in order to ensure that it doesn’t suffer another customer service nightmare (Hoffman, and Bateson 2009, 106). As such, decision criteria come in handy when justifying the choices made by the company’s management. The incident that Dave Carroll experienced at the hands of United Airlines may give evidence to the effect that poor customer service has been ailing the airline (United Breaks Guitars 2009). In order to the company to make things right in this department, it needs a to implement measures that will prevent customer dissatisfaction with the services offered as well as handling complaints with empathy. More importantly, they should portray the company’s values with regards to customer treatment (Saaty and Vargas 2013). United Airline will thus have to make these decisions putting into consideration a number of key decision criteria (Simon 2001, 33). The solutions chosen will have to improve greatly the level of customer satisfaction with the company. Secondly, they will also have to improve the company’s approach to communication with its customers by encouraging face-to-face communication. Thirdly, decisions chosen will have to improve the company’s brand image as it had been tarnished by the Carroll’s viral video on YouTube. Lastly, they will have to be within the company’s mission, vision, goals and values. Making them achievable and within the capabilities of the company’s employees is also an important factor in the decision criteria. Alternatives One alternative will take the form of offering immediate apologies in cases where a customer is aggrieved. By being prompt with apologies, it sends a message of genuine concern in the eyes of the customers (Bruce 2012, 109). This allows for a cordially relationship between the company and the customers and this will in the end translate to improved customer service. This can be done via email or short message service to affected customers. Automating the process is one sure way of reducing the time between the ‘problem’ and the ‘apology’ thereby allowing customers to link the two events thus making the apology way more effective (Bruce 2012, 110). Another alternative would be to offer various kinds of gifts or discounts such as mileage plus point to customers who have experienced poor service from the company. A second alternative that United Airline can consider is to reconsider the company’s priorities even during times of financial crisis so that customers do not suffer from poor service as a result. This will only be achieved by making sure that customer service standards remain the same irrespective of whether staff numbers have dropped or not. Communicating any staff layoffs and the expectations of possible changes from the remaining staff should be communicated to customers so that they understand the situation in case they experience poor service. A third alternative to improve customer service within the company would be to measure the quality of service from customer issued data. This would enable the company to know how it is doing in the customer service department and if any changes need to be made if need be. These data will have to be collected, identified and then aggregating common themes after which a report will be made on the basis of these common themes. Recommended Solutions The alternatives provided above will offer the company a chance to choose the best way of taking care of its customer service (Goodman 2009, 115). One solution recommended is the immediate apology alternative which will allow the company to fasten their acceptance of poor service. The reason for choosing this alternative is that it is in resonance with the company’s values as well as mission and vision. To be recognized as the best in the airline industry can only be achieved if customers are always happy with the service of the airline. This can only be achieved by treating customers as people who require undivided attention when it comes to matters that affect their satisfaction levels. The nature of this recommendation being directly related to United Airline issues makes it one of the best solutions for the company’s problem. It is also a recommendation that will greatly improve United Airline’s brand image as customers as per the decision criteria. This is because with improved customer service, customers will give positive reviews of the company thereby increasing customer to customer engagement which in the long run will get lead to customer advocacy on social media and other platforms. A second recommended solution to United Airlines is to measure the quality of service of the airline. Measuring quality of service from data collected from customer feedback will go a long way in assisting the company’s management to make decisions related to improving customer service (Ireland, Hoskisson and Hitt 2011). The reason why this alternative is recommended over the other is that it is measurable to the extent that data collected will be statistically translated to show the level of customer satisfaction. It also meets decision criteria that has been developed since with a little training, United Airlines staff will be able to it take active part in such surveys. The possibilities of achieving this task are great due to the fact that passengers will be allowed to give quality of service feedback at any time. The timelessness of this decision will ensure that information gathered is up to date thereby allowing the company to make up to date decisions effectively and in real time. Implementation and Implications Implementation of these recommended solutions will have to be undertaken by the top management of the company. The board of directors will then oversee that they are included in the company’s strategic plan. For the first suggested solution, the company will have to get the email addresses phone numbers of their passengers so that communication is made immediately when apologies need to be issued. The customer service department will be tasked with ensuring that the company subscribes to bulk short message and email services. The financial implications are that a substantial amount of the budget will have to be directed towards the adoption of this alternative. This is because if apology gifts are given to every passenger in case of flight delays, then it will cost the company money. For the second alternative, management will be actively involved in implementation of conducting the survey. Training of employees will cost the company money and therefore it should be allowed for in the budget. If these recommendations are not adopted by the company then it will face tough times trying to keep customers satisfied. Appendix 1 The diagram below shows how United Airlines’ customer base reduced drastically as a result of Dave Carroll’s video. Graph courtesy of BTS data. Bibliography Clark, Paul. 2012. Stormy Skies: Airlines in Crisis. Burlington: Ashgate Publishing. Carroll, Dave. 2012. United breaks guitars the power of one voice in the age of social media. Carlsbad, Calif: Hay House. Kotler, Philip and Keller, Kevin. 2011. Marketing Management. New Jersey: Pearson Education. Swann, Patricia. 2014. Cases in Public Relations Management: Rise of Social Media Activism. New York, NY: Routledge. Hoffman, K. Douglas, and John E. G. Bateson. 2009. Services marketing: concepts, strategies & cases. Mason, OH: Cengage Learning Services. Saaty, Thomas L., and Vargas G. Luis 2013. Decision making with the analytic network process economic, political, social and technological applications with benefits, opportunities, costs and risks. New York: Springer Simon, Lincoln. 2001. Business psychology: mastering decision-making and relationship skills in the workplace. Armonk, N.Y.: M.E. Sharpe. Bruce, Peter. 2012. Understanding Decision-making Processes in Airline Operations Control. Burlington : Ashgate Publishing. Goodman, John A. 2009. Strategic customer service managing the customer experience to increase positive word of mouth, build loyalty, and maximize profits. New York: AMACOM. Ireland, Duane, Hoskisson, Robert and Hitt, Michael. 2011. Understanding Business Strategy Concepts Plus. New York: Cengage Learning United Breaks Guitars. 2009. Directed by Dave Carroll. Halifax: Curve Productions Inc. Read More