Over the past week I have been asked numerous times about my
thoughts on Toyota and its recall woes. This past Thursday, I spoke
live with Brian Sullivan and Dagen McDowell on Fox Business News on
this topic as well. There is no shortage of opinion and while I am not
a fan of Monday morning quarterbacking, I do think that there are steps
that should be taken to mitigate the damage.
A brief rundown of the problems:
- A delayed response between the recall and the suspension
of sales / stoppage of production. This may be part of the Japanese
management style which is a very closed and private culture. That will
not do them favors this time.
- Two other recalls in the
last few months — one of which was associated with unintended
acceleration — further signaled confusion to consumers. This week
another blow was delivered right to the Toyota ribcage: its popular Prius hybrid will be called into question over concerns that its brake system might fail when driving over potholes.
delay between the recall itself and the announcement of a fix. When the
problem involves not being able to slow your car down, that’s an
incredibly long time.
- The coordination of the message with
pedal supplier, CTS Corporation, was poor. CTS said that they had been
working on this problem “for a while” and Toyota said the remedy was
something they acted fast to get live quite recently.
yes, the customer. There were very few messages outside of the recall
itself. The national presence thus far has been a full page ad that ran
in 20 markets. I think much more could have been done – which I will
get to below.
- Jim Lentz and team need a better spokeperson
and/or some quick training. The YouTube videos from them to the
customer are not very compelling, inspiring or easy to listen to. The
video with the ABC journalist confronting Jim Lentz was painful to
watch and reminded me of too many movies where the corporation is at
fault (remember the Gene Hackman flick called Class Action?). The
preparation of the key executives is so critical to them going forward.
Here are the videos:
Now, some thoughts for how to go forward if you are Toyota:
Communicate on all available platforms (website, social sites, blogs, TV, print, radio, etc), openly, honestly and often.
This has all the makings of a story that can run away from Toyota
very quickly and the more they let others tell their story the worse
off the company’s image will be. So far, Toyota has talked some about
their plans but these have not been detailed enough, frequent enough.
When specific questions are asked that go to the heart of the trust
of the company, they need to be answered directly and without the
preamble of “it’s complicated”. That does not engender trust. Yes, I
realize that there are some serious legal and cost downsides to telling
the whole story upfront but if we look at past cases of recalls where
destructive images of injury and death are involved, the cost and legal
implications of not being upfront are usually far worse.
In addition to a solid and consistent PR strategy, I suggest employing an aggressive customer care service.
They are sending recall notices, yes but I would have members of the
staff at Toyota start on a call list (this should have started last
week) to each customer with an offer of assistance or answering
questions. The airlines do this when a plane goes down and it does
help. While the number of people affected by this recall are far
greater (into the millions) and hopefully, less serious than a downed
plane, the idea remains the same. Personal care from the company who
built its brand and sales on the idea of quality is a no-brainer.
Exchange every car that’s affected by the recall.
Toyota could lead by offering to exchange all recalled vehicles for
other Toyota products not affected, of similar or same value, at no
cost, no questions asked. This could be either a temporary basis until
their cars are fixed or permanently. Expensive? Yes.
Toyota should have a 24-hour hot line with immediate pickup by a
real, live person, answered by native English speakers (with optional
help reps in various languages). This strategy could play out on
Twitter and Facebook, too.
Incentives For Current Owners
A gesture of good will can go a long way. Toyota could offer two
months of payments to those affected by the recall as a thank you for
their loyalty and patience.
Sure, all of these things are very expensive and present other
issues (what if 2 million customers want to exchange their vehicle?).
Still, I think they present better, more compelling options than simply
allowing competitors to take customers with incentives of their own
(Ford, Chrysler, Hyundai, Honda, GM…they’re all circling in the
water) and it is far less costly than waiting another 5 years for those
defectors to consider you again.
Then, with this plan and infrastructure in place, advertise it.
If possible, I would try to grab time on the big game this Sunday.
There is no bigger audience and no better message than the re-assurance
plan (perhaps this name is too close to Hyundai’s name, but you get the
point) given by Toyota to address the issue and let customers know that
there is almost nothing that Toyota won’t do to keep them.
If they can’t get a spot on the big game, they should put out a
campaign that is multi-media based, directing people to respond online,
in the social network platform, via phone, whatever. They could also
create an app that offers help, details where to go, who is affected,
what choices are available, et cetera.
In every crisis looms an opportunity. If Toyota puts some of that
quality to work in mending and nurturing their affected customers and
future potential customers who are watching their actions carefully,
they have the chance of making it out alive. The downside is much
larger than the upside here, without question. But, this test has the
opportunity to show us the true nature and values of this company, if
they let us.