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.
- A 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.
- Ah 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.24-Hour Support
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.