The modern information age has put added pressure on PR teams to
act quickly over product recalls. But, as John Frank discovers, it's not
the recall itself that damages reputation - it's how you handle it.
Never underestimate the ability of college kids to cause a crisis. Bill
Crane, SVP with GCI Group in Atlanta, remembers the March day two years
ago when client Kidde Safety underwent just such a situation.
Apparently, some Canadian college students were testing fire-safety
equipment, and discovered that a Kidde carbon monoxide detector using a
new type of sensor didn't work properly. They contacted the US Consumer
Product Safety Commission (CPSC), which contacted Kidde.
The company discovered that emissions from ink used in its packaging
were rendering the new sensor useless. That meant the North
Carolina-based company needed to launch a massive recall of one million
detectors it had sold with the new sensor. Crane's firm was contacted to
provide recall PR counsel.
GCI quickly implemented a plan that included:
- Announcing the recall on national morning TV shows.
- Distributing releases about the recall on wire services.
- Making a VNR with Kidde's CEO discussing the recall.
- Pulling unsold product from store shelves.
- Putting up a website where consumers could type in a model number to
see if they had one of the defective products, and then be sent
packaging to return the products to Kidde.
- Distributing posters that announced the recall to retailers, and
established a return program at no cost to retailers.
While Kidde lost sales during the period because it had no product on
store shelves; in the long term, it didn't lose market share due to the
recall, Crane says. That demonstrates how, when executed properly,
recall PR can help maintain customer loyalty and brand reputation.
However, companies must act quickly when they know a product has a
problem, and they must communicate quickly and effectively to all
audiences - regulators, employees, consumers, retailers, and others.
"I don't think a recall in and of itself damages reputation," says
Careen Winters, an SVP with The MWW Group. "It's how it's handled that
affects reputation."
Twenty-five years ago, when he was working on recalls at Ford, companies
had more time to collect data before deciding on a recall, says Dennis
Gioia, a professor of organizational behavior at Penn State's Smeal
College of Business. The evolving media landscape has changed that, he
says. Reports on defective products quickly circulate in today's 24-hour
information environment. Moreover, companies - as well as consumer
groups and regulators - have more tools to find patterns of problems
more quickly than they once did, he adds.
The CPSC is involved in roughly 300 recalls a year. (The CPSC offers a
host of information on recall PR, including a handbook, sample press
releases, and suggestions for putting together VNRs.) Other federal
agencies, such as the Food & Drug Administration, and the National
Highway Traffic Safety Administration, are also in the recall business,
usually negotiating with companies for voluntary recalls. Occasionally,
they go to court to mandate recalls of problem products.
With so much attention, companies need to be proactive when it comes to
recalls. "If you are seen as proactive, Americans are a forgiving lot,"
Gioia says.
The first step in recall PR is to quickly gather the facts to determine
if a recall is necessary. Customer safety should be the measurement,
says Peter Morrissey, now head of Morrissey & Company, and also a member
of the PR team that worked on the famous Tylenol recall by
Johnson & Johnson in the early '80s.
"You're really trying to preserve trust," by being honest with consumers
that your company has a problem, Morrissey says. Johnson & Johnson had a
company credo that put customer safety first, and prompted the recall
without a federal agency urging it.
"It takes a responsible corporation to do the right thing," says Len
Biegel, a principal in the Washington, DC office of Weber Shandwick
Worldwide, who was involved in the Tylenol recall.
Once a company is set to start a recall, it needs to get the facts to
its employees, because they'll be on the front lines dealing with
consumers and the media.
That's what RF Binder did this summer for client Christmas Tree
Shops.
The retailer discovered that the liquid in 28,000 Galileo thermometers
it was selling could be toxic, even though the packaging said it was
not.
The RFB team held meetings with all the chain's store managers and
customer care representatives, explaining the problem and the recall
plans.
"The most important step for the retailer is internal," says Nancy Moss,
senior managing director with RFB. Uninformed employees can disseminate
bad information that hurts a company's reputation. "So much damage is
done by employees with bad information and good intentions," adds MWW's
Winters.
The RFB team also coordinated recall plans with the CPSC, sent releases
to key media, prepared instore posters, put information on the web, and
set up a toll-free number for customers.
Once a recall is underway, it's also important to respond quickly to
charges or accusations from consumers, interest groups, or others.
"Listen to the activists," advises Biegel. "Are there crazies out there?
Certainly, but you don't turn your back on them."
It's also important for a company to have a single voice - usually the
CEO - stressing points that consumers can relate to.
Using statistics to downplay the danger of a recall - saying, for
example, that a product presents only a one-in-a-million chance of
killing someone - simply unnerves consumers rather than reassures them,
Biegel says.
One of the major mistakes Firestone made in its tire debacle was first
announcing a phased recall for warm-weather states. While Firestone
contended the greatest danger from the tires was in high temperatures,
that did little to reassure consumers in cold-weather states, who also
quickly clamored for replacement tires.
As a recall progresses, keep track of consumer opinion, advises
Biegel.
Johnson & Johnson did that nightly, he claims, and the reputation of the
brand remains solid today.
TECHNIQUE TIPS
1. Do gather facts quickly, and disseminate what you know openly and
honestly
2. Do inform employees about recall details; they're your first line of
contact with customers
3. Do be proactive, and put customer safety first
1. Don't use meaningless statistics to downplay the seriousness of a
recall
2. Don't deny responsibility. A retailer that blames a manufacturer for
a product recall risks alienating consumers
3 Don't take so long to start a recall that others capture the press'
attention with tales of product woes before you do.
