How United Avoided An Earnings Disaster By Putting This 1 Sentence Into Practice

 

United Airlines has been a media piñata for the last four months following the viral post of David Dao being dragged from a flight.

Things got worse after United’s CEO, Oscar Munoz, responded in a manner beyond finger-pointing, it seemed more like middle finger-pointing. #BoycottUnited ensued and picked up steam. The only break the airline caught was other airlines equal ineptitudes and incidents gone viral.

So when second-quarter earnings rolled around in late July, there was a United front expecting the worse.

But it never materialized. In fact, the Teflon travel company reported a healthy 6 percent revenue increase and a startling 39 percent surge in profits. Somehow United got untied from the public whipping post long enough to post results many companies would be jealous of.

How in the name of Amelia Earhart did they do it? By quickly pivoting and focusing on one powerful thought:

Don’t deal with customers, delight them.

This may be a more revolutionary idea than you think. I can’t tell you the number of times my wife and me have experienced piss-poor service, I mean like lack of basic expectations being met, following which we turn to each other and say, “If you don’t like your job, do something else.”

To United’s credit, they pulled off an about face about which author of “The Big Pivot”, Andrew Winston, has said, “They’ll be studying this in business schools for years”. United’s own Megan McCarthy said, “To say we learned some lessons would be putting it mildly”.

So what has United specifically done? Some fairly impressive things to be honest.

The New York Times reported on such tactics as up to $10,000 (you read that right) in compensation for passengers who give up seats on overbooked flights, free meals and drinks in economy plus, lost luggage netting up to $1,500 in compensation (no questions, no receipts required), and attendants armed with the ability to atone for small inconveniences (like in-flight theater not working) with frequent flier mile vouchers and flight credits.

The airline has even established a Chicago-based team to offer creative solutions to customer problems (for example flying a customer to a nearby airport and providing ground transportation because they were denied boarding on an overbooked flight).

These wisps of customer delight have been blended with good ol’ fashion crisis management as beleaguered CEO Munoz went on a mea culpa tour.

The bottom line is United kept their bottom line from being grounded.

Not that they’re out of the woods yet–the company has still been outperformed on some key measures by competitors and has sluggish growth overall for the first half of the year.

Time will tell if their efforts stick or have any kind of ripple effect on other airlines (or other service industries for that matter).

I think it’s a shame that it literally took a public flogging to spur a more customer-centric mindset, but, as with an annoyingly delayed flight, better late than never.

 

 

This article by Scott Mautz also appeared on Inc.com. To read more Inc. articles by Scott Mautz, click here.