Analysis: Product problem? It’s in your hands

As Apple deals with consumer complaints over breakages of its new iPod Nano, Alex Black asks what PROs should do when faced with a recall

Last week Apple was forced to deal with a rather embarrassing situation. Its latest incarnation of the now-ubiquitous iPod – the tiny Nano – seemed to have a problem with its screen.

The thickness of a few credit cards and weighing a mere 42g, the 1,000-song device flew off Dixons' shelves at the rate of five a minute when it hit the shops in mid-September.

But some customers who had shelled out up to £179 for the device soon found their screens cracking or failing completely. The iPod target audience is computer savvy, so it did not take long for news to spread among the loyal Apple audience that something was up. Within days, a disgruntled buyer called Matthew Peterson had set up a website called  flawedmusicplayer.com, and the gripes came flooding in.

'Last night I broke my iPod while it was simply sitting in my pocket. I was destroyed over it,' said one.

'I called Apple to see what could be done to fix it. They told me I'd be better off buying a new one, instead of sending it in,' bemoaned another.

Apple's response was to admit that 'a number' of the Nanos had faulty screens, but it was a problem with a particular batch, and not a design fault. Customers were offered refunds or replacements. But this was not a proactive move by the company – it was inspired by the campaign of an unhappy customer that generated as much coverage as the launch of the product itself.

'Apple is known as a sharp company with top-quality products, but a slow response would have damaged that reputation,' points out Cohn & Wolfe director Lara Cresswell.

'One customer can cause disproportionately large waves and if a company spends too long thinking about the financial costs and implications of a recall or refund scheme, the court of public opinion will already have made its ruling. Never overlook the risks to brand value and reputation when weighing up the costs,' she advises.

The Nano, and for that matter Apple, will survive. But what happens when the issue is bigger than a cracked screen on a personal stereo?

The moose test
In 1997, Mercedes unveiled its first small car – the A-Class. One week (and 3,000 sales) after its European launch, a Swedish motoring journalist flipped his A-Class while doing a 40mph swerve manoeuvre amusingly known as the 'moose test'.

Mercedes recalled the 3,000 A-Classes on the road and halted production. Despite having already spent around £1bn developing the car, the firm spent a further £140m fitting its new stability technology to the A-Class. Four months later the 'mini-Merc' was back on the road and selling better than ever. The technology went on to be fitted in all new Mercedes, and the model's triumphant return is perceived by automotive PROs as an example of how product safety crises should be handled.

In the context of automotive product recalls, Mercedes UK press and PR manager (passenger cars) Rob Halloway says: 'It is important to tell people the facts and reassure them. We recalled 58,000 UK E and C-Classes in April over a possible electronic fault with the braking system. But the brakes would still work even if it totally failed and the car would still be absolutely safe, so it was important to get that message across.'

Many car recalls are due to faults occurring in extreme conditions that most drivers will never encounter, he adds.

Performance PR MD Andy Francis points out that dealing with vehicle product recalls is very different to handling problems with white or brown goods, because no manufacturer can, or will, recall a product for cosmetic or general quality issues. It has to be safety-orientated. However, handled correctly, it should not have too much of a detrimental effect.

'The motoring press deal with product recalls as a modern day "public service announcement",' says Francis. 'Handled correctly and through the appropriate channels, a recall has no effect on sales.'

Early response
Ford UK manager for product affairs Fiona Pargeter says preparing dealers and customer service departments with information as early as possible is a crucial part of the comms process.

'There is nothing worse than customers ringing up and not being able to get the right info,' says Pargeter. 'The issue will only escalate if it is ignored. If customers start complaining about the brakes and it's not dealt with, the next thing you'll see it on is Watchdog.'

But it's not only cars that can be lethal. In 1982, a batch of Johnson & Johnson's Tylenol painkiller was contaminated with cyanide, leading to the death of seven people in the US. Panic quickly spread and the episode was a PR disaster.

However, when another batch was found to have been tampered with four years later, the company recalled and destroyed every box of Tylenol, redesigned the packaging to make it tamper-proof, and put the drug back on the market. Despite the huge cost, the open way in which Johnson & Johnson dealt with the problem meant it actually increased its market share.

Food is another product at risk from contamination and, in extreme cases, product recalls can sometimes affect the reputation of an entire sector. Razor PR director Chris Woodcock goes so far as claiming that after the high-profile recall of foods contaminated with Sudan 1 earlier this year, 'consumer distrust of food manufacturers and retailers is at an all-time low'.

But whether it is a matter of safety, or a matter of consumer outrage, a swift proactive response combined with clear internal and external comms can be the difference between a quick-
dying story and a comms disaster.

Five product recalls that hit the headlines
* 1982, US. Johnson & Johnson's Tylenol painkiller is laced with cyanide. The swift recall, open response and new packaging boosts the firm's market share.
* 1990, global. Having dismissed it as 'an isolated incident' Perrier announces a worldwide recall of 70 million bottles of water after a benzene contamination.
* 1997, Europe. The new Mercedes A-Class flips during a 'moose test'. £140m later, with a new traction system, the A-Class is back on the road.
* 2005, UK. 'Cancer dye' Sudan 1 is found to have contaminated a batch of chilli powder. The number of products affected reaches three figures, sparking one of the biggest mass recalls in UK history.
* 2005, UK. Some iPod Nano screens start to crack. After a blogging campaign by a disgruntled customer, Apple offers to replace damaged products.

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