Policies designed to protect profitability can be very costly

The recent violent removal of a customer from a United Airlines aircraft showed how the company preferred to make room for a flight crew member (who was vital for sustaining the profitability of another flight) rather than respect a paying customer.

The CEO was quick to praise the employees in an internal memo. They had followed company policy meticulously and were duly praised for their commitment. They had managed to handle a belligerent customer who was refusing to comply with corporate wishes …

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Social media outrage

Following this incident, a significant drop in the stock price helped to convey to the airline's executives what in fact was a real problem. Initial comments made by top management were withdrawn. It turned out that as far as the public was concerned, the passenger had done nothing wrong. United Airlines, on the other hand, had done nothing right.

In 2008, a Canadian musician Dave Carroll complained to United. He had witnessed how his luggage was being thrown around, as a result of which his expensive guitar broke in two. He was quite surprised to be told by the customer service representative that the airline couldn’t help him. The company’s policy stated that any claims for damages must be filed within 24 hours of the incident having occurred. The musician had missed this deadline.

Policy compliance was a prime value at United Airlines, although the musician had seen with his own eyes how staff handled his luggage improperly. In the end, the musician dealt with the issue by recording an original song called United Breaks Guitars.

Within three days the video had gone viral and received more than 500,000 hits. Naturally this caught the attention also of United’s executives. Subsequently United Airlines wanted to settle the whole affair by mutual agreement but the musician had already won. Today, the original video has more than 17 million hits.

Customer-centred company?

The recent display of violence described above by a company against a customer has been viewed by over 550 million people. Giving corporate policy priority over human decency is never a good idea in our hyper-connected world.

Nevertheless, in some companies, it is evident that consumers are still viewed as market mechanisms for converting products into profits. This is the conclusion of an article on the management-issues.com website.

-jk-

Article source Management Issues - British website cntaining practical information, tips and advice to managers
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