“Recalls undermine trust in a specific brand and it can take the company a long time to recover from the damage to its reputation, but it doesn’t have to take a long time if the company uses good crisis management tactics,” Manpreet Hora, an assistant professor in Georgia Tech’s College of Management, said in a study analyzing 500 recalls. “Consumers are forgiving, so if a firm apologizes, acknowledges the problem, and doesn’t make the mistake again and again, consumers will continue to be loyal to that brand.”
This quote, from a post by Ilya Leybovich on the Industry Market Trends blog, is right on the money in terms of the role crisis management and people skills play in protecting and rehabilitating brands which have been faced with product recalls. While the initial damage will obviously vary from one situation to another, with careful handling and honest business practices even seemingly dire situations like Toyota’s recent massive recall can become “history” and not an ongoing issue.
The BCM Blogging Team