When a crisis strikes, it can cause an earthquake of fear and stress to erupt within a company affecting its team members, stakeholders, and customers. Without a concrete plan of action, a business can quickly fall apart from the inside out. These impacts can create a negative reputation for years to come, as we have seen from a number of major brands recently.
All businesses and organizations must be prepared to handle an unexpected crisis, especially high-stress emergencies such as recalls. Think about it like this: firefighters wouldn’t run into a burning building without a plan of action in mind. The same idea can be applied to companies. Having a plan in place not only limits the unavoidable consequences of a recall but helps a business maintain a positive, trustworthy brand image throughout the process.
While most businesses do everything they can to avoid recalls, it’s sometimes inevitable, and companies should be prepared. An effective crisis plan includes a comprehensive, easy-to-access list of steps to take when a situation occurs. Most importantly, a successful plan should include clear communication methods. It’s also worthwhile to plan ahead of a crisis, ensuring the company handles a recall as best as possible. Having a tried-and-tested communication contingency plan ensures employees are prepared, keeps stakeholders’ and customers’ minds at ease, and can reduce the overall impact of a recall quite dramatically.
Real Recall Risks
According to the U.S. Department of Commerce, there are more than 300,000 companies exporting goods and services across the globe, totaling in more than $178 billion a month in the U.S. alone. With an increasingly globalized nature of business, the chances of a recall or crisis rise for every industry.
In 2016, the U.S. Food and Drug Administration (FDA) tracked more than 750 food recalls, a 22 percent surge compared to 2015. Meanwhile, the U.S. Transportation Department reported a record high of 53.2 million vehicle recalls in 2016, issuing 927 recall campaigns. And once a recall hits, it spreads quickly. In fact, a recent Freshfields Bruckhaus Deringer study showed 69 percent of crises spread internationally within 24 hours, and on average, reach at least 11 countries.
The lasting impact of a recall is best seen among customers. According to a recent Harris Poll, 85 percent of adults in the U.S. said they would get angry if a company simply issues a product recall or has a crisis. The same study also revealed that 63 percent of adults say a slow response time from a company to correct the recall and a refusal to acknowledge that there is a crisis would also make them angry. A lack of communication from company to consumers during emergency situations can make or break the brand’s reputation, which means having the proper tools to communicate with people across the globe is essential.
How to Prepare for a Recall
More than ever, due to connective technology and social media, organizations are now expected to respond to a crisis immediately. This makes it crucial to have an effective communication plan in place. The longer it takes to respond, the more time customers have to complain, leave negative reviews, and choose not to use a company’s products or services ever again.
While the digital era may seem like it poses more difficulties for companies in the midst of a crisis, it can actually help them prepare for and manage crises in a number of ways. Using digital tools like marketing automation, social media monitoring, real-time reporting, and web forms provides quick communication methods. These tools also gain you immediate stakeholder perception and feedback. Additionally, it can help convey messages to customers to show that the company is present and fully engaged and ready to do what’s needed to solve the issue at hand. Businesses can also provide their team with vital insight and informational reports, saving time and costs, and making room for a more streamlined process.
In order to create an effective crisis plan that is quick to implement, limits brand damage, and maintains customer loyalty, consider the following steps:
- Pre-recall planning. During any emergency, the best thing to have is a big red “GO” button to push and set everything in motion. While having a physical big red button isn’t realistic, pre-recall planning gives companies that same reassurance that everything will kick into gear as soon as needed. By having a list of every action required to navigate a recall, relevant managers and employees will know exactly what to do, how to do it, and when to take action.
- Recall task force. Are your team members trained and ready to answer tough questions? When recalls hit, questions flood in from multiple directions. The last thing a company wants is an untrained or underprepared employee speaking for it during this difficult time. Make sure your team is equipped and regularly updated with company protocols and the details of the current recall.
- Messaging. Making an official statement under a time crunch can be stressful and sometimes leads to miscommunication issues. Prepare well-worded templates and holding statements that can be easily adapted for the product in question. This template gives companies a head start and makes it easier to formally and accurately address the situation.
- Monitor and review. With a recall, negative responses are inevitable, and it can be difficult to manually keep track of all of them. Use cloud-based customer relationship management (CRM) systems to monitor and modify these responses and comments.
Responding to these comments in a timely manner shows customers, shareholders, and team members you are on top of the situation and doing everything possible to fix it. - Post-recall assessment. Once a recall or crisis has settled, don’t immediately resume normal functions. Take a look at what went well, what when wrong, and what could be improved. Sit down with team members and evaluate not only how recall situations can be limited, but how they can be better addressed and handled in the future.
- Recall partner debrief. Throughout a crisis, companies with a recall partner should be in constant contact. When a recall has been resolved, develop a stronger working relationship with your recall partner so that the next time one strikes, you can work together effortlessly.
- Start today. If you’ve already gone through a recall without communication plans in place, you know how hectic and unorganized it can be. Don’t wait until another recall or crisis happens to address those issues. And if you haven’t yet experienced a recall, don’t delay planning for tomorrow, start today.
Along with a complete communications plan, organizations should take extra precautions to ensure any type of crisis resolves without further issues. For example, because employees come and go in the blink of an eye, it’s important to regularly update employees on industry changes, legislations, and other important information. Make sure sensitive information remains private to ensure the company stays in control throughout a recall.
Before a recall, it’s important to update, renew, and amend product recall insurance as well. Know which federal agency governs your sector and the different classes of recalls. Lastly, make sure your business can take on the challenge and perform a mock recall.
Exercises help identify any potential problems within a crisis and communications plan and allow time for corrective action. These scenarios give managers and employees an idea of what to expect and how to act during the high-stress situation of a real recall.
The Power of Data
In the midst of an emergency recall, companies often miss a big opportunity to collect and analyze valuable customer data. While collating important reports, measuring traffic of affected customers, and addressing the public, businesses could also be collecting valuable information about their customers that could help reduce the impacts of a recall.
This data is collected through call centers. Call centers are invaluable during global crises, offering front-line multilingual communication to provide the best possible customer service to your audience. While communicating with customers in their native tongue, call centers also collect data that can be fed back through your chosen communication channels and used to improve the current crisis as well as future emergencies.
Prepare with Confidence
While facing a crisis, the last thing any company wants to deal with is severe brand reputation damage. Recalls are expensive and time-consuming, so having a plan to minimize damage and contain the issue is vital. No matter the size of a scandal, quick, efficient, and clear communication is at the core of resolving a crisis and limiting the impacts. Crisis communication strategies and planning should be revised on a regular basis to keep everyone informed with up-to-date and accurate information.
Peter Gillett is the CEO of Marketpoint Recall.
