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What leaders can learn about customer loyalty from the Boeing debacle

Boeing’s public response to the 737 Max crashes provide a case study for what businesses should and shouldn’t do, argues this customer service expert.

What leaders can learn about customer loyalty from the Boeing debacle
Boeing Chief Executive Dennis Muilenburg speaks during a press conference after the annual shareholders meeting at the Field Museum on April 29, 2019 in Chicago. [Photo: Jim Young-Pool/Getty Images]

I fly a lot. Fortunately, I like flying. The idea that I can go halfway around the world from my home in Ottawa to, say, Kuala Lumpur, in less than a day is magical.

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I’ve probably flown on every type of commercial aircraft ever made, but I’ve never really given much thought as to what company manufactured the plane I’m sitting in. To be honest, it has never been part of my travel decision-making process, at least until now.

Boeing continues to be in crisis

The airplane manufacturer, Boeing, is now in full crisis-management mode following the tragic loss of 346 lives in the crashes of two of their 737 Max airplanes–one in Indonesia and one in Ethiopia. The way they have publicly responded has only compounded their problems. As the New York Times reports, CEO Dennis Muilenburg only released a public statement a week after the crash in Ethiopia. It’s a lesson that everyone in leadership needs to pay attention to.

There used to be a time when apologizing for adverse events was the No. 1 no-no for organizations. The belief was that admitting fault at any level would open doors to all manner of unfavorable press and litigation. Company PR departments and lawyers would toil diligently to craft safe, noncommittal statements, and employees were instructed to refrain from off-the-cuff, unvetted remarks. This is the strategy that Boeing chose to embrace. Unfortunately, it is a strategy that has done the company far more harm than good.

The power of ownership, apologies, and transparency

History shows that companies successful in weathering similar storms have taken a decidedly different tact. In 2008, for example, Canadian packaged meat giant Maple Leaf Foods was facing a listeriosis contamination of its meat processing plants. More than 20 people died as a result of the outbreak, and there were many more who became ill. As soon as they identified the source, Maple Leaf responded immediately, voluntarily recalling over 200 foods made in the plant. As the terrible story began to unfold, the company opted for complete transparency and took full responsibility.

In a press release and a countrywide advertising campaign, CEO Michael McCain said, “Tragically, our products have been linked to illness and loss of life. To those people who are ill, and to the families who have lost loved ones, I offer my deepest and sincerest sympathies. Words cannot begin to express our sadness for their pain.” In subsequent interviews, he said, “There are two advisers I’ve paid no attention to. The first are the lawyers, and the second are the accountants.”

Being accountable is not a new approach. In 1982, when seven people died as a result of bottles of Tylenol that had been tampered with, parent company Johnson & Johnson immediately took the high road. The company recalled 31 million bottles of Tylenol capsules and offered free replacements to their customers, even though it was a deliberate poisoning on the part of an unrelated individual in Chicago.

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You can’t understate the measurably positive effect of transparency, apologies, and taking ownership on customer attitudes. This point was solidly driven home in 2010 when a University of Michigan study identified that medical professionals who admitted mistakes and took ownership over them faced 50% fewer lawsuits. The average cost of the lawsuits also fell–by close to 60%.

Boeing’s flawed response

Fast-forward to the Boeing 737 Max tragedies. Muilenburg’s carefully worded statement expressed sorrow for the accident. That was a good thing. But rather than own the issue, he chose to defend their planes. The company then worked at diverting culpability by not conceding to any problems with the suspect software. They also insinuated other causes and blamed the pilots for not completely following the standard procedure.

Muilenburg also tried to minimize their role in the tragedies. He said, “Most accidents are caused by a chain of events. This, again, is the case here.” Shortly after, people discovered that Boeing had known about the issues since 2017. The New York Times reported that American Airlines pilots had confronted Boeing after the first crash. Leaked audio revealed that they were angry that Boeing had failed to disclose the existence of the software.

The stark difference in outcomes

There is a considerable difference in how Maple Leaf Foods, Tylenol, and Boeing fared after the crisis. Maple Leaf Foods quickly rebounded in revenues and profitability, and reclaimed their reputation as a brand people could trust. Johnson & Johnson had similar results, with Tylenol soon regaining its brand trust and leadership position.

Boeing, on the other hand, appears to have a very dark road ahead of it. Lawsuits are mounting, pilots are continuing to express concern, orders have been canceled and deferred, and existing planes will likely continue to be grounded for months. Business Insider recently conducted a poll of 1,100 people and 53% say they would reschedule if their flight is on a 737 Max. Can’t say I blame them. The next time I’m flying off to deliver a keynote address, I may do the same.

The lessons in customer loyalty

A lot of things go into creating customer loyalty, but the two most significant factors are integrity and caring. When customers trust you and believe you are looking out for their best interests, they will be loyal. The moment customers start to question your integrity and intentions, it’s unlikely that you’ll get their hard-earned loyalty back.

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Boeing’s response provides several lessons about customer loyalty that companies can (and should) take away. First, companies need to accept responsibilities when they make mistakes. Customers will respect them more if they admit their errors and show them they’re working hard to make things right.

A crisis also provides brands with the opportunity to show their customers that they care about every aspect of their experience. Whether it’s delivering outstanding customer service or making corporate decisions that are in their best interests, using a human touch can go a long way.

Lastly, companies need to be honest and transparent. It will be difficult for customers to trust any brands who refuse to own their mistakes. Remember, there is nothing you can hide that’s worth more than your integrity.


Shaun Belding is the author of The Journey to Wow and CEO of The Belding Group of Companies–an award-winning business dedicated to global customer service training and customer experience.

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