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Broken Guitar Has United Playing the Blues to the Tune of $180 Million

Singer-songwriter Dave Carroll's United flight had just landed when he heard a passenger behind him exclaim, "My god they're throwing guitars out there." Members of his band, Sons of Maxwell, looked out in time to see their guitars being tossed by baggage handlers. When Carroll later confirmed that his beloved guitar was a casualty in the melee, it wasn't just his $3,500 Taylor guitar that was broken. His heart was broken, too. He was able to have the guitar repaired for $1,200, but it will never be quite the same. "It plays well but has lost much of what made it special," says Carroll.

When nine months of calls and emails failed to net Carroll compensation for the $1,200 of damage to his guitar, he took matters into his very talented hands and wrote "United Breaks Guitars." Carroll posted the incredibly creative and hilarious music video on YouTube, where the infectious tune promptly went viral.

According to the Times of London, "...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%, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars."

Can United's 180 million dollar loss be chalked up entirely to a song on YouTube? Probably not. Did the song have a very real and very negative effect on United's brand equity? Absolutely.

What can you learn from this great David versus Goliath story that will help your business? Know this: Consumers will talk. And with the power of social media, their voice is louder than ever before. You can't stop the chatter, but you can have some control over whether they're saying good things or bad things. Companies have to be tapped in to social media to quickly right wrongs and head off bad press before it spins out of control. Carroll gave United every chance. When, after nine months of calls and emails, United finally shut the door on his communications, he wrote them one last time, telling them of his plan to write three songs, video them, and post them on YouTube. His hope was to get a million views over the course of a year. His first song passed by the 1.5 million mark within four days of posting. It's now been viewed more than 4.3 million times and is still spreading. After the video went viral, United finally tried to make things right with a $3,000 donation to the Thelonious Monk Institute of Jazz—a goodwill gesture that was way too little and too late to stop the viral spread of the story.

Carroll himself has become an unexpected hero. He's been featured on Today, CNN, and Jimmy Kimmel, and interviewed by news agencies from around the world. Best of all, the song "United Breaks Guitars" has made it to the number one Country Western song on iTunes UK's download chart.

Meanwhile, Taylor guitars just landed themselves a PR windfall. Talk about creating products consumers love! Whether providing a service or creating a product, the end goal of any successful business has to be creating an experience that consumers love—one they want to talk, write, and even sing about.

Now, just to contrast what United is up against, check out another video, made by Gory Bateson: "Southwest Never Broke My Guitar":

Read more of Ravi Sawhney's Design Reach blog
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Ravi Sawhney is the founder and CEO of RKS, a global leader in strategy, innovation, and design.

Since founding RKS nearly 30 years ago, Sawhney has earned a variety of top honors in the design industry, and assembled a client list that includes HP, Intel, LG, Medtronic, Seiko, Sprint, and Zyliss, among many others. In the process, RKS has helped generate more than 150 patents on behalf of their clients.

In 2004 Sawhney was named chairperson of the Industrial Design Excellence Award program, where he created the IDSA/BusinessWeek Catalyst award for products that generate measurable business results. Most recently, he was named Executive Director of Catalyst to direct its evolution into a program to develop case studies illustrating design's power to effect positive change.

Sawhney also invented the popular Psycho-Aesthetics® design strategy, which Harvard adopted as a Business School Case Study. He is a regularly featured lecturer at Harvard Business School, USC's Marshall School of Business, and UCLA's Anderson School of Business, where he teaches this business-driven design tool.

In addition to RKS, Sawhney has played an integral part in the founding of several other businesses, including Intrigo, an innovative computer accessory company; On2 Better Health, a health products company; and RKS Guitars, best known for its reinvention of the electric guitar.