Who would have thought given the credit crunch impact on the automotive industry in 2009 that we would be witnessing a beleaguered and battered Toyota? Surely, the big Detroit three should be the main victims of the biggest economical downturn in recent history, but if you read the press over the past couple of months Toyota is destabilised and the current leader of wow and gloom. Toyota certainly made a loss last year for the first time in its history but is financially in better shape than many of its competitors so what was their problem? Toyota’s problem, and it is a big one, is failure to manage a product quality recall effectively until they were forced to face up to the safety implications relating to the accelerator pedals and braking systems. Denial is not a good strategy when it comes to people safety!

• It is our experience working with automotive clients that things do go wrong! When dealing with any product failure, Percepta would advise you to follow the simple steps below to maintain credibility and limit any media circus which may take place:
• Be honest both with yourselves and your customers – this will lead to resolving issues as soon as possible
• Act openly and quickly! This should be the case with any product failure, but especially in this case where the failure was safety related
• Know your responses. All media responses should be well rehearsed, with a repair logistic already in place…responding to the media without an answer is the equivalent of opening a can of worms.
• Don’t bury your head in the sand! Denying any problem will only make it greater. Dealing with your customers and responding to all of their concerns is one of your main priorities right now to maintain their loyalty and to effectively show a proactive approach.

I’m not saying every manufacturer needs legions of engineers and customer communication experts on standby at all times to deal with the inevitable, but rare, occasion of a mass product recall. What I am saying is every manufacturer should have excellent concern resolution resources in place for everyday individual complaints that can be quickly scaled to manage the logistics of large scale recalls. I’m also saying our experience shows those manufacturers who admit they have an issue and welcome their customers to contact them defuse ugly press situations quickly, allowing them to get on with the corrective actions required to resolve the issue. Customers are quick to forgive if the manufacturer takes them seriously and resolves their issue with clear communication and genuine support.

Finally, does recall logistics cost lots of money? Yes but not as much as Toyota have now paid in terms of real cost to the company and untold damage to the iconic brand.

I would like your comments and questions to develop the debate and for those interested in what Percepta expertise in all this is go to our paper “Managing Urgent Consumer and Media Response”.