Up, Up and Away – Voluntary recalls on the rise to protect brand image
The number of product recalls in Europe is going up every year. Last year alone, 26 per cent more products had to be removed from the market than in 2011 – across a total of 2,278 recalls recorded.
So why the sudden increase? Is our food now more likely to be contaminated, or our cars more likely to break down? No.
One of the key reasons for this increase is that a large number of recalls are being made on a voluntary basis by the brands concerned. More frequently, products are taken off shelves/recovered because of unconfirmed problems, or an increased risk of failure…not because of known faults. In 2012, one in three recalls happened for these reasons. Companies have simply adopted a more cautionary approach to product withdrawal.
However, there are other reasons. Supply chains are becoming longer, more complicated and have greater geographical spread. In situations such as these quality assurance can slip, causing a batch of less-than-perfect product to slip through the net. Add to this that consumer power is on the up and brand loyalty is at an all time low; companies that have spent years and huge amounts of money investing in brand value could start to see it all tumble down.
In the past, recalls have always been associated with danger and risk, now they are beginning to be more associated with brand value and customer interaction.
However, there are a number of key considerations if a company is to turn a product recall from a negative into a positive.
Planning is paramount. Brands simply cannot be caught off guard. Many businesses will underestimate the cost of a recall to their brand. Many will opt to manage the process in house, without fully realising the implications this can have on current resources, both in time and money. Once an issue is discovered, targets must be identified and notified. Communication is key. Call centre resources must be in place and social media can be used to indentify product defaults by social media monitoring tools and to help notify customers, increasing the number of faulty products returned.
A successful product recall that leaves customers satisfied and loyal to the brand is a huge bonus. It can create a rare opportunity for a company to communicate directly with its customers, enhance loyalty and ensure further purchase.
When you look at a product recall in this way, is it really all that surprising that companies are starting to voluntarily recall their potentially damaging products – and in the process safeguarding customers from potential danger and enhancing brand loyalty with the help of subject-matter experts?