Posted on Harvard Business Review: March 18, 2010 4:49 PM
On March 13, a Virgin America flight from Los Angeles to New York was diverted from John F. Kennedy International Airport to Stewart airport in Newburgh, N.Y., due to severe weather, and the passengers and crew waited in the plane on the tarmac for over four hours. The crew was anxious, babies were crying, mothers were anxious, and the passengers were unruly—to the point that one woman was taken off the plane by police. The entire ordeal was documented by David Martin, the CEO of Kontain.com, on his company's iPhone social-media application.
Martin was called by someone in Virgin America's marketing department, who offered him a $100 voucher for his troubles. He said the passengers deserved more. He subsequently received a call from Virgin America CEO C. David Cush. During that conversation, according to Martin, he negotiated a full refund and a $100-per-person voucher for all passengers.
If this account is accurate, it is fascinating that a customer, by posting an account of his ordeal as it was happening via his iPhone, became powerful enough to negotiate such a deal. It demonstrates the need for every company to start thinking about real-time brand management.
Firms may "own" their brands, but brands really live in the heads of their consumers. Companies must constantly nurture and actively manage their brands at the speed customers form opinions about them. And today that's mighty fast. Notifications or conversations about an experience may begin on Twitter, but they can be immediately posted to all social media around the world. (If Facebook were a country, its population would make it the third-largest nation in the world—behind India and ahead of the United States.)
Greg Brandeau, chief technology officer of Walt Disney Studios, recently told me that the window for premiering a new movie used to be the first weekend of its release. It would take two and a half days to figure out if a movie was doing well or poorly. Today, with people Tweeting and posting to Facebook while they are watching the movie, that window has shrunk to hours.
Most firms do not have the marketing reflexes to respond in real time. There are a number of implications for executives:
Every company must have "a brand radar system" to constantly monitor social media. The good news is that if a company commits to this notion of having a brand radar system, there are many tools to help build this surveillance capability.
Firms must get used to being "naked" to the marketplace. There is no question that all the things that happen with your customers and even within your firm may become a matter of global, public record in minutes.
Companies need a "trust bank" with their customers. I believe that Virgin America did not suffer too much from the horrific L.A. to New York flight because its customers deeply trusted it. In contrast, United Airlines suffered terribly when it broke the guitar of a passenger, who then created a YouTube video viewed over 8 million times in which he bashed United's service and attitude. Unlike Virgin America, United did not have a reservoir of good will to help protect its brand when a problem arose.
I'd love to hear:
How fast are your firm's reflexes?
Do you have brand radar system?
How deep is your firm's trust bank?