The Top 5 Mistakes Companies Make During Recalls
Depending on how it is managed, a recall can be a minor blip in an otherwise banner year or a devastating episode for a company’s reputation, market share, and bottom line. But despite seeing example after example of negative headlines caused by recall mismanagement, companies continue to repeat many of the same blunders when the inevitable day comes when they experience a recall.
The top recall mistakes tend to fall under three categories: moving too slowly, knowing too little, and being “penny wise, pound foolish.”
- Delaying the Decision – It is understandable that companies want to be certain a recall is necessary before undergoing one. But waiting too long can cause additional problems on multiple levels, including hefty regulatory fines, legal liability, and brand damage. Companies should have a full understanding of the regulatory requirements and a plan for responding and investigating the first signs of a defect.
- Underestimating the Response – Companies often assume their usual websites and internal contact centers can absorb the additional calls and traffic coming in. In those cases, websites often crash and agents are quickly overwhelmed. Even those that recognize an outside call center is necessary often launch with too few agents. When hold times become excessive and the backlash appears in traditional and social media, they will then scramble to ramp up. By then, some of the damage is already done – damage that could easily prove more costly than choosing the recommended agent levels in the first place.
- Communicating Poorly – Understaffed call centers are bad enough, but when agents aren’t armed with the proper training, the situation becomes even more damaging. Agents should be ready to act as an extension of the brand. Certain recalls, such as those involving higher risk levels or any issue concerning children and pets, require specialized sensitivity training. In addition, it is important to consider whether multilingual agents will be necessary, especially during a global recall.
- Failing to Understand the Regulations – A retailer response form sounds simple enough, right? Wrong. It’s just one example of the many details involved in a recall that may fall under strict regulatory requirements. If they don’t follow the guidelines, companies may have to repeat steps, which can confuse and frustrate both retail customers and end-users, not to mention put needless strain on staff.
- Choosing the Wrong Remedy – Making a mistake when it comes to the remedy can land companies in hot water with both regulators and customers. Generally, the options are repair, replacement, reimbursement, and coupons – or some combination of those. But consumers have expectations on how quickly and completely they are made whole – especially if a serious safety issue is involved. Regulators demand high response rates – or – at a minimum – clear, documented efforts to reach them, and a lackluster remedy can contribute to lower response.
In a sense, all these missteps are unsurprising. No company wants to rush into a difficult decision, take the time to learn about regulations they hope they’ll never need to understand, or waste money. The key is to avoid reacting in the moment – and that means having a detailed plan to rely on when a crisis strikes.