Harvard Case - United Airlines' Service-Recovery Challenge After Reputation Meltdown
"United Airlines' Service-Recovery Challenge After Reputation Meltdown" Harvard business case study is written by Sandeep Puri, Kushal Dev Kashyap, Gaganpreet Singh. It deals with the challenges in the field of Marketing. The case study is 9 page(s) long and it was first published on : Mar 2, 2018
At Fern Fort University, we recommend a comprehensive, multi-pronged approach for United Airlines to rebuild its brand image and regain customer trust following its reputation meltdown. This strategy focuses on a combination of service recovery, brand repositioning, and strategic marketing initiatives to address the root causes of the crisis and create a positive customer experience.
2. Background
United Airlines, a major US airline, faced a severe reputational crisis in 2017 due to a series of highly publicized incidents involving mishandled passengers and poor customer service. These incidents, including the viral video of a passenger being forcibly removed from a flight, sparked widespread public outrage and negative media coverage, leading to a significant decline in brand perception and customer loyalty.
The case study focuses on the challenges United Airlines faced in recovering from this crisis, particularly in terms of regaining customer trust and rebuilding its brand image.
3. Analysis of the Case Study
To understand the depth of the crisis and develop effective solutions, we can analyze the situation using a combination of frameworks:
a) SWOT Analysis:
- Strengths: Strong brand recognition, extensive route network, loyalty programs, and a dedicated workforce.
- Weaknesses: Poor customer service perception, lack of consistent service standards, and a reactive approach to crisis management.
- Opportunities: Enhance customer experience through technology and innovation, focus on employee training and empowerment, and leverage digital marketing for positive brand messaging.
- Threats: Continued negative media coverage, increased competition, and evolving customer expectations.
b) PESTEL Analysis:
- Political: Government regulations on airline safety and passenger rights.
- Economic: Fluctuations in fuel prices and economic downturns impacting travel demand.
- Social: Growing awareness of customer rights and social media's influence on brand reputation.
- Technological: Advancements in customer service technology and digital marketing tools.
- Environmental: Sustainability concerns and pressure to reduce carbon footprint.
- Legal: Legal challenges related to passenger rights and customer service violations.
c) Consumer Behavior Analysis:
- Customer Segmentation: United Airlines needs to identify and understand the needs and expectations of different customer segments, including frequent flyers, business travelers, and leisure travelers.
- Target Market Selection: The focus should be on regaining trust among existing customers and attracting new customers who value excellent service and a positive brand experience.
- Consumer Psychology: United Airlines needs to address the emotional impact of the crisis and demonstrate genuine empathy and commitment to customer satisfaction.
d) Competitive Analysis:
- Benchmarking: Compare United Airlines' service offerings, pricing, and customer experience against competitors like Delta, Southwest, and JetBlue.
- Competitive Advantage: Identify areas where United Airlines can differentiate itself, such as offering innovative services, personalized experiences, and a strong focus on customer care.
4. Recommendations
To address the service-recovery challenge, United Airlines should implement the following recommendations:
a) Service Recovery:
- Immediate Action: Implement a comprehensive service recovery program to address customer complaints and concerns promptly and effectively. This includes providing compensation for inconveniences, offering apologies, and resolving issues in a timely and transparent manner.
- Employee Training: Invest in extensive training programs for all employees, focusing on customer service skills, conflict resolution, and de-escalation techniques. This will ensure consistent and positive interactions with customers.
- Customer Feedback Mechanisms: Establish robust feedback channels, including online surveys, social media monitoring, and customer service hotlines, to gather real-time feedback and identify areas for improvement.
b) Brand Repositioning:
- Brand Positioning: Reposition United Airlines as a customer-centric airline that prioritizes passenger comfort, safety, and a positive travel experience. This requires a clear and consistent brand message communicated across all channels.
- Marketing Strategy: Develop a comprehensive marketing strategy focused on rebuilding trust and showcasing positive customer experiences. This includes leveraging digital marketing, social media, and content marketing to highlight positive stories and testimonials.
- Advertising Campaigns: Launch impactful advertising campaigns that emphasize the airline's commitment to customer service and highlight the positive changes implemented.
c) Strategic Marketing Initiatives:
- Customer Relationship Management (CRM): Implement a robust CRM system to personalize customer interactions, track customer preferences, and provide tailored services.
- Digital Marketing Strategies: Leverage digital marketing channels like social media, search engine optimization (SEO), and email marketing to engage with customers, build brand awareness, and promote positive experiences.
- Social Media Marketing: Actively engage with customers on social media platforms to address concerns, respond to feedback, and build relationships.
- Content Marketing: Create valuable content, such as blog posts, videos, and infographics, to educate customers about United Airlines' services, policies, and commitment to customer satisfaction.
d) Innovation and Technology:
- Technology Integration: Invest in technology solutions that enhance the customer experience, such as mobile check-in, self-service kiosks, and in-flight entertainment systems.
- AI and Machine Learning: Explore the use of AI and machine learning to personalize customer experiences, predict potential issues, and improve operational efficiency.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with United Airlines' core competencies in aviation and customer service, while also reinforcing its mission to provide a safe and enjoyable travel experience.
- External customers and internal clients: The recommendations address the needs and expectations of both external customers and internal employees, fostering a culture of customer-centricity.
- Competitors: The recommendations consider the competitive landscape and identify opportunities for United Airlines to differentiate itself from competitors.
- Attractiveness - quantitative measures: The recommendations are expected to have a positive impact on key performance indicators such as customer satisfaction, brand perception, and revenue.
6. Conclusion
By implementing these recommendations, United Airlines can effectively address the service-recovery challenge, rebuild its brand image, and regain customer trust. This requires a commitment to continuous improvement, a customer-centric approach, and a proactive strategy for managing future crises.
7. Discussion
Other alternatives not selected include:
- Ignoring the crisis: This would be a disastrous approach, leading to further reputational damage and customer loss.
- Offering discounts and promotions: While this might attract some customers in the short term, it would not address the root causes of the crisis and could devalue the brand.
Risks and Key Assumptions:
- Implementation challenges: Successfully implementing these recommendations requires significant resources, commitment from leadership, and effective communication across all departments.
- Customer perception: Regaining customer trust is a long-term process that requires consistent effort and positive experiences.
- Competitor response: Competitors may capitalize on United Airlines' weakness and launch aggressive marketing campaigns.
8. Next Steps
To implement these recommendations effectively, United Airlines should follow these steps:
- Develop a detailed implementation plan: Outline specific actions, timelines, and responsible parties for each recommendation.
- Secure executive buy-in: Gain support from senior management to ensure resources and commitment are allocated to the initiative.
- Communicate the strategy to employees: Educate employees about the changes and their role in delivering exceptional customer service.
- Monitor progress and make adjustments: Track key performance indicators and make necessary adjustments to the strategy based on results.
By taking these steps, United Airlines can successfully navigate the service-recovery challenge and emerge as a stronger and more customer-centric airline.
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Case Description
In 2017, United Airlines suffered a blow to its corporate reputation throughout the United States and international markets, including China, mainly due to an incident on United flight 3411, in which an airport enforcement officer forcibly dragged a passenger out of a plane. The inadequate public relations reaction following the incident and ineffective crisis management left the company reeling. The company became subject to scathing social media attacks, customer dissatisfaction, passenger anger, and a drop in its stock value. The airline, which had already been grappling with very low rankings in customer satisfaction indexes, realized the need to rebuild its brand and greatly improve its customer satisfaction ratings. To prevent such instances from occurring in the future, United needed to take steps to rebuild its tarnished brand image and consider some important questions: What service expectations did customers have of airlines such as United? How would these expectations develop over time? How important were customer satisfaction, client relationships, and passenger experience to United? How could an airline company conduct a root cause analysis for service failure? How could it analyze the different gaps in delivering good quality service?
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