On Monday, July 6, Dave Carroll, a musician from the band Maxwell Bros, posted a YouTube music video complaining about the poor customer service he received from United Airlines regarding a broken Taylor guitar. The guitar (worth about $3,500) was damaged on a flight to Nebraska more than a year ago. The video immediately generated broad awareness and after only five days, with more than 2.5 million views, created a craze on Twitter and throughout the blogosphere. It also caught the attention of traditional media including CNN, ABC News and Los Angeles Times. The airline has since responded to Carroll’s complaint by contacting him personally, donating $3,500 to a charity of his choice and incorporating his catchy video into their customer service training program.

While United Airlines is focused on learning from this experience, the potential for substantial damage to its reputation and brand is clear. For those executives who have been skeptical of social media and its power, the “United Breaks Guitars” video provides an illustrative example. Social media is changing how consumers and brands interact and companies need to be ready to respond.

The rising popularity of social media already has many companies reevaluating their PR strategies to include this new medium. Established brands need to prepare for the potential shot across the bow that may damage their valuable reputation.

“It’s clear that the communications landscape is changing. As more and more organizations rely on social mediums, such as Twitter, Facebook and YouTube as a business tool, it’s critical for companies to incorporate strategies to manage their reputation vis-‡-vis these social networking platforms,” said Jack Creighton, strategic director at Madrona Venture Group and former CEO of UAL Corporation (United Airlines). “Policy-setting, strategic planning and education around the adoption and use of social media is important in managing reputational risk and should be integrated with established, more traditional forms of communication.”

So what can we learn from United Airlines’ crisis?

Evaluate your brand’s need for a response. In the case of Carroll, the large magnitude of views and comments was enough to elicit a public statement and response from United. It is important to gauge the credibility of the complaint and determine whether a response is warranted. Not all complaints warrant a response. Companies should develop or update their processes regarding customer complaints with consideration for this new medium.

Determine what changes, if any, need to be made internally. United Airlines acknowledged Carroll’s poor customer service experience and released a statement saying, “His video is excellent, and we plan to use it internally as a unique learning and training opportunity to ensure that all our customers receive better service….This should have been fixed much sooner.” By doing this, United Airlines demonstrated its honesty about the situation and willingness to improve. The company also articulated that the experience would be used to change its customer service processes. It is important to communicate what changes are taking place. Without letting the public know what action is being taken, the perception may be that the complaint has not been heard or that United did not care.

Remain positive, even under attack. United first publicly responded to Carroll by tweeting, “This has struck a chord w/ us and we’ve contacted him (Carroll) directly to make it right.” United never deflected blame. Instead, they set a positive tone and mirrored the level of humor conveyed in Carroll’s video.

It is critical to be clear in the messages you want customers to hear. In the case of a false accusation, it is important to make a clear statement and determine any underlying interests. As Kathleen Fearn-Banks notes in her book, Crisis Communications, “In a crisis, the public perceives truth to be whatever public opinion says. An organization in crisis must prove to its publics that the prevailing negative opinion is not factual.” By sending a clear, positive message brands will be able to better positioned to recover from a social media attack.

Respond by utilizing the social mediums that have been following the crisis. This is an area where United could have improved. United publicized its response through a number of tweets on its Twitter account (@UnitedAirlines) and an interview with the Los Angeles Times but the company did not post a YouTube video response. Ultimately, the United response did not garner significant attention.

In a recent Computerworld article, Bart Perkins writes, “Dave Carroll knows how to take full advantage of the power of social media. United doesn’t, and the cost is a PR nightmare.” Bart goes on to suggest United would have been wise to have created their own YouTube video response.

While it is likely this customer service disaster will pass for United Airlines, it is certain that more companies will face similar situations as more consumers leverage social media to voice complaints and perceived injustices. Companies need to develop PR strategies to prepare for these challenging situations so they can avoid significant damage to their reputation.