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Lessons marketers can learn from the Toyota crisis

Lessons marketers can learn from the Toyota crisis

By UTalkMarketing Editor, Clark Turner.

Toyota is facing the worst chapter in the history of the company. On the back of a recession which has hit the car industry hard, the global giant is now facing a global catastrophe.

Almost 8.5 million cars worldwide are to be recalled following a series of safety scares – firstly concerning accelerator mechanics, and now the brakes.

Despite being a Japanese company, its manufacturing operations are global, meaning that any disaster affecting the company will have a far reaching impact on national economies and employment figures.

France, Turkey, the Czech Republic, Italy, Germany, Spain, Portugal, Austria, Poland, Belgium, Slovakia and the Netherlands all supply parts to the motor company.

Meanwhile in the US, Toyota is battling mounting criticism of its handling of the crisis by the Obama administration as American car manufacturers pursue their own agenda.

“Frankly, for the U.S. Government to publicly scold Toyota is shameful; they're using it as a way to stimulate sales of GM and Chrysler cars, which the U.S. Government (i.e. taxpayers) own,” President and CEO of  the global agency network Worldwide Partners, Al Moffatt, told UTalkMarketing

“It's just that the governments and other car companies saw this as a (political) opportunity to take down number one. Believe me, Ford, GM and Chrysler have all had much bigger car-recall issues that the government didn't say a word about.”

He added, “Had Toyota not had such great brand equity as a high-quality car, the recall wouldn't have been such a big deal.  People expect such recalls from GM, Fiat, etc., but not from Toyota. That's the real news - sometimes a stellar, strong brand leaves you little wiggle room for error.”

While the company has played down the extent of the problem, the situation has been escalated by media coverage of ‘drivers at risk’, driven further by an initial media communications lockdown by Toyota.

And it’s this that may have caused the biggest damage to the company. Cars can be repaired, but damaged reputations are not so easy to fix.

The silence was broken when Miguel Fonseca, Managing Director of Toyota GB issued an apology in a statement published in Saturday’s (February 6, 2010) newspapers over concerns over accelerator safety.

“I would like to start by apologising to our customers for any concern we have caused,” he said. “Looking after our customers is our number one priority.”

But since then concerns over brakes have arisen, adding a new dimension to the crisis.

So could the company’s PR been managed better? And what should be the company’s next steps in restoring consumer confidence?

According to Paul Charles, who was Director of Communications at Virgin Atlantic and Eurostar before joining Lewis PR as Chief Operating Officer, Toyota’s stance is an object lesson in how not to do crisis management, eroding all brand pillars.

“It would be interesting to know exactly what crisis management plans were in place because they certainly do not seem to be working. It took until Friday for the president of the company to say sorry to customers over the fiasco – and even then he read from a prepared script,” he said.

“This was too little and too late and the vacuum was filled by a mounting clamour for information and speculation about how deep the problems ran.”

Charles added, “Apologies have to be speedy and sincere but Toyota’s delay gives the impression that it caved in because of the media pressure and not out of genuine concern for its customers.
“Spokespeople also have to be properly briefed when they speak to the media. I was staggered to hear a Toyota UK representative admit in a Radio 5live interview that he couldn’t remember the full list of the seven Toyota models involved.”

Rosi McMurray, Executive Head of Consulting at The Brand Union, said that it was the core value of ‘reliability’ that had been most seriously damaged.

“You would expect car brands to have a lot of levels of quality management from the factory floor, to systems that kick in when complaints are first received. For some reason this has not worked well for Toyota,” she added.
“This crisis really illustrates the old adage that a brand is only as good as its weakest point. Communication with consumers has been confusing with different information issued about what the problem is, what is causing it and how many cars are affected.”

As much as Toyota has attempted o manage media relations, consumer hysteria and anger has still spiralled out of control. And social media is adding a new dimension to the consumer-brand dialogue.
“The fact that the company is also using more democratic channels (e.g. Twitter) to maintain a dialogue with its customer base reinforces its intent to ‘make good’: it is addressing associated concerns and keeping its customers updated and engaged in dialogue rather than the more traditional use of ‘one-way’ statements to the press,” said chairman of brand agency, Appetite, Laura Haynes.

“There may be a case for broadening this transparency to include practical advice delivered through channels such as YouTube where the reported problem could be shown, or shown how to identify and guidance on how to deal with it or what steps to take.”

And that’ just what the manufacturer has done. In a bid to allay concerns, Toyota has created a dedicated YouTube channel offering up to the minute advice for concerned motorists.

“The key thing the public worries about is whether they are safe to drive. If they can't find a quick answer, their anxiety amplifies,” said Group Account Director at immediate future, Niall O’Malley.

"The YouTube videos (as below) were a good move. They combined the traditional elements of positioning messages, such as empathy and factual explanation with clear links to the well-SEOed recall landing page so that anyone searching for ‘Toyota recall’ gets Toyota’s half of the story.”

So where should Toyota go from here? Could this incident be a catalyst for change which makes Toyota’s actions the blue-print for customer services in this new decade?

Will this force brands to reconsider their crisis and issues management strategies enabling them to be ahead of the curve, anticipating the next revelation and positioning itself before it breaks?

A sustained PR and marketing offensive will be critical to win back trust, said Paul Charles, who added, “The Toyota decision to set up an independent quality control committee is a start but on its own will not be enough to repair the loss of faith in one of the world’s most iconic automotive brands.”

For consumer services expert, Mario Dolcezza of Diciamo, however, asking open-ended questions and gaining meaningful insight will help the company to recover its shattered brand image.
 “Toyota needs to be thinking about looking after its existing customers, as they are the ones who will help to move the company forward,” he continued.

“This is very important because you can turn a negative customer experience into a positive one by acting quickly to deal with any issues raised though meaningful customer feedback.”

But can Toyota bounce back? Laura Haynes certainly thinks so, if matters are handled in the right manner.

“If handled correctly, I think it will take a bit more than this to seriously dent the reputation of the company,” she said. “The key is for Toyota to hold its course, continue to be true to its brand promise, especially respect, improvement and teamwork.”

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