Toyota: Too Little? Too Late?
This morning I saw the first Toyota commercial in which the firm not only acknowledged the problems in their vehicles that have resulted in not one, but two extensive and expensive recalls, but they apologized for not living up to their longstanding reputation for quality. The commercial I saw was clearly an attempt to tug on the emotions of its consumers while also informing customers about the specific actions Toyota is taking to repair the affected vehicles and rebuild trust in their brand. Unfortunately, the response may be too little too late.
In my work I have said that it is not always the crisis event itself (in Toyota’s case a faulty product), but it is the handling of a crisis that often most threatens a firm. Toyota is the latest example of this. Customers accept that people (and companies) make mistakes or that occasionally things go wrong. And although they may be disappointed and frustrated with being inconvenienced, they are generally willing to work with company to determine the best course of action moving forward. But when the firm acts irresponsibly in handling the problem they will likely experience a backlash from the consumers. In this way it is much like a parent who tells a child that a wrong doing may garner a punishment, but lying or covering it up is a much more severe transgression, and one that comes with not only a more severe punishment, but a loss of trust that can take considerable time to regain. Because of its poor crisis handling, Toyota has lost the trust of its consumers, a far more difficult challenge to battle than merely handling the recall.
In a previous blog I offered advice on how Toyota should have initially addressed the recall. They unfortunately moved too slowly in communicating with the public and that has hurt the firm. Consumers, the media, and others filled the silent void left by Toyota with their own stories, assumptions, and conclusions, and left the impression that Toyota was attempting to downplay (at best) or cover-up (at worst) the problem. Rebuilding their reputation in light of these perceptions will be a long uphill battle. But it is possible. From this point on, Toyota must be in constant contact with its constituents. If there is information about additional problems that they have been withholding, now is the time to bring that forward. They must regularly communicate to the public, its dealers, and other stakeholders about the progress of the recall. They must continue to find ways to make the recall as convenient as possible for customers. They must offer incentives to keep existing customers. And they must convey the specific actions they are taking to prevent future problems.
Toyota entered this crisis with one of the highest customer loyalty levels a company can achieve. This can serve them well. But unless they handle the crisis better going forward than they did in the initial days following the recall, they will lose that loyalty for a very long time.
Tags: rebuilding trust