United Airlines, the General Election and brand loyalty

Following last week’s outrage over United Airlines’ manhandling of a customer off a flight that he paid to be on, and this week’s announcement by British Prime Minister, Theresa May, of a snap general election in June, it became abundantly clear that customer loyalty is not based purely on personal experience. In the age of social media trends and viral news stories, brands – whether traditional companies, political parties or individual people – can suffer far more easily than ever before from the collective impact of a supposedly loyal base responding to a single negative incident. Customers engage with brands on many different levels, and the ideal business goal is to be able to manage and work with each of those relationships as successfully as possible.

As you may have seen, Dr David Dao was forced off United Airlines Flight 3411 from Chicago to Louisville on 9th April, manhandled by security staff and left with a bloody face, a broken nose and missing teeth. While United were not necessarily unfair in their decision to remove Mr Dao from the plane – they needed to fly 4 additional crew members to Louisville and allegedly picked him at random after insufficient passengers had voluntarily chosen to leave the flight – it was clear that the operation that was poorly executed. It was perhaps also unfortunate that suggestions of racial discrimination were raised, with the #ChineseLivesMatter hashtag trending on Twitter soon after.

United’s CEO, Oscar Munoz, released a statement a few days after the event.

"We are more determined than ever to put our customers at the center of everything we do," his statement said, although customers of the airline were already posting pictures on social media of their United loyalty or credit cards cut into pieces.

While it is unlikely that many ultra-elite MileagePlus Platinum or 1K members will boycott the airline, the key impact may be more likely to come from the lower status members who will choose to no longer fly as much with United as a result. The road warriors who have regular activity but lower status on a number of domestic airlines therefore have a lot more marginal headroom and choice to give away to the likes of Delta, Alaska or even LCCs such as Spirit or Frontier.

Despite this and a number of other recent customer incidents, United exceeded analysts’ forecasts on Monday and reported Q1 revenues of over $8.4bn. Stock prices have also since remained fairly solid. Changing customer loyalty, while it might be fickle, is not immediate and it will be key to mitigate the effects of these incidents over the coming 12 months, where the impact of any potential change in customer behaviour might be felt.

When Theresa May then called a snap general election in the UK yesterday, it struck me how similar United’s case is to political voting. Amid election forecasts on the news, the internet and all over my Facebook feed, certain parties were generally expected to lose out as a result of actions over the past few months, particularly around the previous general election in 2015 and last year’s EU referendum and the Brexit outcome. Party loyalty is one thing, but it’s the marginal voters with more temporary loyalty that swing the balance in elections.

While polls and forecasts are an indicator of potential results, general elections, much like quarterly or annual results, are where the effects of ‘loyalty’ are really seen from both your member base, as well as your marginal supporters who are more likely to be swayed by extraneous forces, either positively or negatively.

One such example is broken election promises. The Liberal Democrats reneging on the promise of maintaining university tuition fees in the 2010 UK General Election had disastrous consequences for the party in 2015, losing 49 of their previously 57 held seats. While the decision taken did not directly affect many of the voters involved, the overall impact of the decision had much wider ramifications around the Lib Dems as a brand – in many eyes becoming a brand that commanded less trust and reliability.

To that end, it will be interesting to see how the Lib Dems have fared in the longer-term under Tim Farron’s new leadership in this election on June 8th, compared to the Labour Party for example, who are going through internal issues of their own. With Jeremy Corbyn’s political strategies sitting further to the left wing than many Labour MPs, members, and supporters openly feel comfortable with, the question can again be asked: does loyalty to a political ideal or party transcend any issues with how the party chooses to represent itself, especially where the leader of the party is elected by a loyal minority but seen as a representative of the majority.

As ICLP’s recent research has shown, combining customer behaviour with psychologist Robert Sternberg’s Theory of Love, individuals exhibit many sort of relationships with brands – from ‘casual’ and ‘liking’ relationships through to those who are truly devoted. Each customer segment contributes to your business in some way, but many could be put at risk by poor incident management, or misdirected strategic decision making. Long-term business success is clearly bigger than meeting the needs of a few loyal customers, it’s about making sure that customers at all levels of your business have as many reasons to be as loyal as possible. This way, when something doesn’t quite go to plan, their overall brand experience with you remains as intact as possible.

With the immediacy of communication today, never has Warren Buffett’s “20 years to build a reputation and 5 minutes to ruin it” perhaps rung quite as true, although you may not see the effects of those critical 5 minutes until much further down the line.

Any thoughts, comments or questions on how to drive long-term customer loyalty, drop me a line at [email protected].