Mitigating Reputational Damage During a Product Recall

Mitigating Reputational Damage During a Product Recall

In today’s competitive climate, companies strive for innovation and efficiency. A focus on efficiency can lead to a shortened research and development cycle, which increases the chances of oversight[i]. Errors in a production cycle can result in an executive’s worst nightmare: a product recall.

 

Recalls Come in Different Shapes and Sizes

A product recall is the process of retrieving and replacing defective goods consumers have purchased. A business or manufacturer absorbs the cost of replacing and repairing a defective product and sometimes, reimbursing affected consumers is required. A recall can damage a company’s reputation, change its financial profile and hinder its performance in the market[ii].

Since recalls come in all shapes and sizes, there have been four main types identified. Of the four, the precise recall is the least harmful; in this scenario, the company understands the problem with the product and can successfully isolate the damaged product from the supply chain. The second type is the incomplete recall, in which all of the bad product is not successfully removed from the supply chain. Typically, an incomplete recall takes place when the recall was too narrow, misunderstood or too slow to occur. The third type is the overkill recall, where a company recalls more than what was necessary, because it lacks a thorough understanding about which products were impacted. Lastly, the cascading recall unravels overtime and is typically due to an incomplete original recall[iii].

 

Taking Control of a Product Recall

Businesses can take control of recalls by effectively leveraging the resources available to them. This can determine the financial impact of the recall, as well as consumers’ views of your brand[iv]. According to the Graduate School of Political Management, when a company is faced with are call, it is important to take responsibility as early as possible. Taking responsibility shows the public that your company understands its mistake and that it is embracing transparency. To add, outlining the details of how the situation will be rectified and how the company plans to prevent it from recurring in the future is crucial.

Social media campaigns are important tools in dealing with product recalls, as they are an effective way to reach a wide audience. In 2020, 80% the U.S. population used at least one social media platform and the numbers are increasing[v]. When making public statements and engaging with customers, make use of all available social media channels. Leveraging all the digital channels available to your business improves awareness and shows a willingness to communicate[vi]. Communicating through social media also offers unique opportunities for interaction. Relevant questions asked by multiple people can be answered publicly and phone numbers can be provided to continue the conversation.

Honing in on Your Message

Another effective strategy is to practice mock recall staging's. These protocols asses everyone’s knowledge of legal and regulatory concerns and refine public relations (PR)messaging. In the event of an actual recall, mock staging's help to adequately prepare the whole team. Failure to plan for a recall can result in cascading recalls, where the scope of the original recall is broadened because the initial statement was deemed to be insufficient. It is important to carefully focus on the wording of PR statements, intently assess all facts related to investigations and set up a recall processing team dedicated to sending customers a consistent message[vi].

 

Using CompliaceQuest to Ensure the Best-Case Scenario

A solution such as ComplianceQuest (CQ) offers convenient access to a wide variety of information and reports, including Corrective and Preventive Actions (CAPAs). If a defective product is reported, CQ allows you to perform any required containment actions and identify the dispositions of non-conforming material in inventory or production, as a result of the complaint. CAPA investigation allows engineers to record an investigation summary, attach objective evidence documents and specify relevant root causes. With CQ, companies are able to understand the causes of defects, isolate them from inventory and production and formulate action plans to remediate them. This allows for executives to rest assured, knowing they will have the most accurate information and be in the best possible position in the event of a recall.

Gerent is a ComplianceQuest consultant and implementation partner, with towering experience in the quality sector. We thoroughly understand the challenges companies face in their pursuit of delivering superior products with consistency. For more information about how we can help your business build efficiency while enhancing product quality, contact us at gerentllc.com today.


[i] https://www.marsh.com/kr/en/insights/risk-in-context/product-recalls-every-manufacturers-nightmare.htm

[ii] https://www.investopedia.com/articles/investing/010815/how-do-recalls-affect-company.asp

[iii] https://www.industryweek.com/operations/quality/article/21966716/what-type-of-product-recall-do-you-face

[iv] https://www.industryweek.com/operations/quality/article/21966716/what-type-of-product-recall-do-you-face

[v] https://www.statista.com/statistics/273476/percentage-of-us-population-with-a-social-networkprofile/#:~:text=How%20many%20people%20are%20on,reach%20in%20the%20previous%20year

[vi] https://gspm.online.gwu.edu/blog/handling-product-recalls-4-pr-strategies-to-consider/

Ready to reinvent the future?

Get Started

More from Gerent