The Pepsi mistake was an ad agency challenge whose impact on the brand was not seen by the Pepsi C-Suite.
In the United case – it wasn’t until United was ruthlessly dragged down their own aisle of losing money in the market and being shamed online before they started down an empathetic path towards the victim.
While the Pepsi incident was stupid and embarrassing – eventually the fallout will pass.
You certainly didn’t see a market reaction of people selling off their shares. Nor did you see a boycott movement.
Since the choice was psychologically grounded in stupidity and a bad choice, consumers are more likely to forgive and eventually forget.
This is because we are all guilty of being stupid and making bad choices. We can relate to that because it is simply human error.
The problem is less likely to change consumer habit long-term.
The United mistake was a bully tactic.
It was antagonistic and abusive on many levels. To make it worse the C-suite response was not only out of touch – but aggressive and divisive.
To make it worse the C-suite response was not only out of touch – but aggressive and divisive.
I believe the voluntary offer for leaving the flight got up to $800. That’s where they stopped 4 x $800 = $3200 and four hotel vouchers. When that didn’t work they said fine – we’ll just take people who paid off the flight to put a few crew members on. Meaning United didn’t hold those seats for the crew – they sold them.
The video showed how far United is willing to take the issue. The first statement from the CEO was blaming the victim. That’s how the day started and they began to lose nearly a billion in market value.
They also lost several billion in intangible value and brand damage – because this wasn’t a simple error – it was predatory and parental.
Even worse – it was preventable!
People do not respond well to bullies and/or being told what to do without a choice. This triggers anger and rage. This always forces people to take a deeper look at their behavior (i.e. pick another airline).
The frustration turned into anger and then evolved into the rage that quickly spread across the internet.
Not only were people making fun of United by creating new slogans – they were cutting up their United credit cards. That hurts – future cash flow.
Once they lost these things then the CEO became human and apologized.
However, that may end up being too little too late. It also inspired domestic and international competition to make fun of United and that i is what is new with social media.
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