Survey Finds Consumers Not Forgiving or Forgetting Company Mistakes
One of my crisis communications mantras has been that the passage of time can heal many of the wounds a company''s or individual''s reputation suffers in the fallout from a crisis. If you just focus on doing the right thing and quit talking about what you''re doing, you can make significant progress toward repairing the damage. But it takes time.
A new survey from Harris Interactive suggests that I may need to reassess this point of view. The study found that 15 percent of respondents would never again purchase a recalled brand. Additionally, 21percent of those polled said that they would avoid using any brand made by the manufacturer of the recalled product. Clearly, consumers today have more options than ever and they will abandon a company and its brands if it makes a mistake.
What worries me most about this report is that companies may be tempted to do anything possible to avoid publicly announcing a recall in order to protect their brands. Even if they discover a problem, some companies may try to keep the problem out of the public eye because of the long-term damage such a revelation might cause.
Bad idea. Johnson & Johnson virtually wrote the book on effective crisis response when it seemingly put the interests of the company and its brands second to the protection of its customers by proactively removing all Tylenol from the shelves a couple decades ago. This selflessness is what strengthens relationships between a company and its customers and it is the mindset that is necessary in the minutes and hours following the discovery of a problem.
The health and safety of people -- its customers, employees and neighbors -- must be paramount in every decision a company makes. It''s valid to recognize that every mistake has lasting costs and that brand loyalty is tenuous at best. Companies need to put the necessary processes and controls in place to discover as many mistakes as possible before they enter the market. Anything else will threaten the very existence of both the company and its brands.
Here''s the story as reported by Brandweek:
Research: Study: Product Recalls Scare Some Away, Forever
15% of consumers will never again buy a recalled brand.By Eric NewmanIt''s not a good time for a screw-up.According to a recent study by market research firm Harris Interactive, Rochester, N.Y., consumers are more than just a little concerned about the recent string of product recalls from their local grocery stores.In a poll of 2,563 adults surveyed online between April 10-16, 79% said they were aware of food recalls that have occurred during the past three years. Almost a third (29%) of respondents considered food recalls to be a "serious concern."Those aren''t such friendly numbers at a time when a proliferation of brands provide consumers the opportunity to jump ship in the midst of a brand crisis."We''re facing a market today that is ruled by the tyranny of choice," said Jack Trout, president of marketing strategy firm Trout & Partners, Old Greenwich, Conn. "That''s why recalls are so tricky, because if a brand has a problem, it''s very easy for [the customer] to move on to another brand."According to the survey, while 55% of people said they would switch brands temporarily in the case of a safety and health recall on a product they usually purchase, a full 15% said they never again purchase the recalled brand. Additionally, 21% of those polled said that they would avoid using any brand made by the manufacturer of the recalled product.Such sentiment can have a damning effect on tainted brands. A February recall of Peter Pan peanut butter because of salmonella contamination, for example, cost ConAgra Foods $50-60 million, said company rep Stephanie Childs.And yet, it''s not all doom and gloom. While the news media''s 24-hour format and the proliferation of blogs means that consumers have more information about a brand''s not-so-shining moments at all times, the report also showed a great disparity in consumer connection between a brand and its corresponding recall—a difference as clear as chicken and peanut butter.For instance, after a February recall of certain Oscar Mayer/Louis Rich fully cooked chicken breast cuts and strips on concerns that food was contaminated with listeria monocytogenes, few of the shoppers polled seemed to connect the brand with the recall. In fact, the Harris poll showed that 14%of participants believed Tyson Foods was the manufacturer of the bad chicken, 3% named Perdue, and only 2% correctly identified Oscar Mayer as the purveyor of the tainted goods.Despite the numbers and consumer calls to its help line inquiring about the recall, Tyson actually got a bump from Oscar Mayer''s debacle. "Our sales increased as consumers have switched to Tyson, since the competitor involved in the recall temporarily withdrew from the category," said Tyson rep Gary Mickelson. Oscar Mayer declined comment.Peter Pan wasn''t so fortunate. Of those polled, 42% correctly identified Peter Pan as the recalled brand, and 4% singled out Great Value (which was also a subject of the recall). But that didn''t mean others didn''t get dragged into the fire: 8% of respondents thought Jif brand peanut butter was the offender and 4% pointed their fingers at Skippy."It''s all how you handle it and how big the news is," said Trout, adding that brands need to move quickly to diminish consumer impact at a time when the speed of information and plethora of brands in the marketplace provide less time for corporate maneuvering. "A lot of recalls are inside baseball and happen inside a smaller group, but it gets bad if it becomes a much more difficult public relations issue. The more people learn about it, the more difficulty you''re going to have [as a brand]."ConAgra''s Childs said the company has since made a significant investment in remodeling its Sylvester, Ga., plant so that "not only are we addressing the most probable causes of the salmonella contamination, but we''re also taking the opportunity to install state-of-the-art equipment and designs for the plant. We''ve been very transparent in the steps that we''re taking to address the cause of the contamination."Still, for many consumers, it''s too little, too late.