BY Ravi SawhneyThu Jul 30, 2009 at 12:50 PM

Singer-songwriter Dave Carroll’s United flight had just landed when he heard a passenger behind him exclaim, “My god they’re throwing guitars out there.” Members of his band, Sons of Maxwell, looked out in time to see their guitars being tossed by baggage handlers. When Carroll later confirmed that his beloved guitar was a casualty in the melee, it wasn’t just his $3,500 Taylor guitar that was broken. His heart was broken, too. He was able to have the guitar repaired for $1,200, but it will never be quite the same. “It plays well but has lost much of what made it special,” says Carroll.

When nine months of calls and emails failed to net Carroll compensation for the $1,200 of damage to his guitar, he took matters into his very talented hands and wrote “United Breaks Guitars.” Carroll posted the incredibly creative and hilarious music video on YouTube, where the infectious tune promptly went viral.

According to the Times of London, “…within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines’ stock price to suffer a mid-flight stall, and it plunged by 10%, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars.”

Can United’s 180 million dollar loss be chalked up entirely to a song on YouTube? Probably not. Did the song have a very real and very negative effect on United’s brand equity? Absolutely.

What can you learn from this great David versus Goliath story that will help your business? Know this: Consumers will talk. And with the power of social media, their voice is louder than ever before. You can’t stop the chatter, but you can have some control over whether they’re saying good things or bad things. Companies have to be tapped in to social media to quickly right wrongs and head off bad press before it spins out of control. Carroll gave United every chance. When, after nine months of calls and emails, United finally shut the door on his communications, he wrote them one last time, telling them of his plan to write three songs, video them, and post them on YouTube. His hope was to get a million views over the course of a year. His first song passed by the 1.5 million mark within four days of posting. It’s now been viewed more than 4.3 million times and is still spreading. After the video went viral, United finally tried to make things right with a $3,000 donation to the Thelonious Monk Institute of Jazz–a goodwill gesture that was way too little and too late to stop the viral spread of the story.

Carroll himself has become an unexpected hero. He’s been featured on Today, CNN, and Jimmy Kimmel, and interviewed by news agencies from around the world. Best of all, the song “United Breaks Guitars” has made it to the number one Country Western song on iTunes UK’s download chart.

Meanwhile, Taylor guitars just landed themselves a PR windfall. Talk about creating products consumers love! Whether providing a service or creating a product, the end goal of any successful business has to be creating an experience that consumers love–one they want to talk, write, and even sing about.

Now, just to contrast what United is up against, check out another video, made by Gory Bateson: “Southwest Never Broke My Guitar”:

Read more of Ravi Sawhney’s Design Reach blog