Partner Article

How a business can deal with a product recall

Having a product failure is often perceived as being disastrous for a business; leaving a reputation in tatters and a mountain to climb in terms of customer confidence recovery. However it doesn’t have to be this way and, when handled well, a crisis can actually strengthen relationships with customers through an improved perception of the brand and an enhanced reputation for accountability.

To prevent damage to a brand and its reputation occurring, the most important thing is to plan effectively, efficiently and by ensuring a crisis plan or strategy is regularly updated. Every business that provides a product or service that could be subject to a crisis, such as a recall, must make sure that there is an established plan in place that can be implemented immediately to stop a situation spiralling out of control. The plan must be regularly updated and referred to and not left to sit on a shelf at the back of an office gathering dust. It needs to be fluid regardless of whether or not a situation has actually happened or not.

It is also important to ensure that across the business, a response to a crisis is more than just to minimise any legal liability from product failures. The focus should also be on the entire brand or company and making sure that such a crisis does not affect the very being of the organisation. For this to happen, speed is very much of the essence when it comes to crisis response. Failure to do this may well mean that negative news will be further compounded. It is also vital to stay calm. Naturally, key business decision-makers will be concerned about their company, but a crisis such as a product recall doesn’t need to leave lasting damage to a brand.

For businesses experiencing a product recall situation, it can actually provide brands with the opportunity to reconnect with customers, both existing and prospective. By dealing with any situation with speed, brand damage can be avoided and better brand advocacy can be built. Irrespective of the sector or the type of recall, a quick response implemented via a cohesive communications strategy is vital to keeping customers informed and making them feel like they are a valued part of the unfortunate situation.

For any business handling a public situation, mishandling it can actually create more issues than the initial problem itself. But by handling something effectively, positive customer engagement can certainly result. An example of this is when Lexus launched its brand in the US. Immediately disaster struck and they had to recall a faulty product. But through speed, efficiency and communication they generated goodwill from prospective customers. It is bizarre to think that given the size of the business now, but it is not inconceivable to think that had Lexus handled the situation badly..

There are a number of different strategies that can ensure that a crisis is dealt with successfully and in a positive way for business development. There are some fundamental areas that must be adhered to including keeping an open and clear dialogue with consumers, keeping a consistent cross-channel message, having an updated and informative website and ensuring that a customer service telephone line is manned. Additionally, social media activity must be considered. If a brand regularly engages across various platforms, the support must be available to manage this touchpoint at times of crisis. Indeed, social media can actually by hugely valuable to a business in a time of crisis. It allows the organisation to respond in real time to consumers while helping to dispel any inaccuracies that are reported, countering any rumours that might be flying around. However, staying quiet during a crisis when previously active across channels is a bad idea. Customers in this day and age seek immediate answers, and social platforms give them the opportunity to engage. A silent brand is not going to go down well and will infuriate people. So once a brand has invested in a social presence, it must continue to operate and update the channels when crises hit.

We often get asked what proof we have that a crisis can lead to a positive brand experience. A recent study we conducted looking at this found that almost three quarters of respondents said they would consider a repeat purchase if they had a good experience following a brand recall. The flip side is that if the crisis is handled poorly with bad execution and limited communication, 70 per cent of consumers would actively criticise the brand on and offline.

The best way for a business to manage a crisis effectively is to ensure that it has the right partner in place. External organisations working closely with businesses offer different and less entrenched perspectives. They can mitigate decisions from internal key decision makers borne out of passion rather than common sense. As an outsourced provider, a global footprint is also important. Recent research from law firm Freshfields Bruckhaus Deringer LLP shows that thanks to the digital age more than one quarter of crises spread to international media within an hour. So working with an experienced global operator can help turn any negative into a positive, creating the distance needed from the internal people at a business but retaining that personal touch that impresses consumers and helps turn any potential crisis into an opportunity for growth and development.

David Pickering is Chairman of Eclipse Marketing

This was posted in Bdaily's Members' News section by David Pickering .