In our hyper-connected society, it is difficult, if not impossible, for potential hazards to remain under the radar. Before the advent of the internet, important consumer issues could remain out of the spotlight, affording companies the luxury of settling serious offences without informing consumers of the risks they’ve been exposed to. This was the method of resolution the Ford Motor Company’s chose back in the 1970’s; despite hundreds of casualties, the automaker delayed recalling the Ford Pinto for nearly a decade based on a simple cost-benefit analysis. It was able to keep things quiet because thorough journalistic investigations were needed to disclose a story. There weren’t tool to easily disseminate the information to the public and nurture a debate. In contrast, nowadays, thanks to social media, raw information broadcasted online can be enough to expose a company’ practices to the public and trigger a major media turmoil.
By analyzing three prominent recall campaigns recently carried out in the US automotive sector, we aim to highlight a set of good and poor practices in the management of such corporate crises. We selected the recent recalls conducted by Toyota, General Motors and Tesla Motors because they are similar in pattern and media coverage, but had highly different outcomes: some companies faced long-term negative effects whereas others bounced back swiftly. While they differ in scope, we believe they provide a strong foundation for understanding how digital tools have modified communication practices in crisis situation.
Toyota’s recall crisis began at the end of 2009 when reports of unintended acceleration surfaced in several vehicles. The issue has been attributed to floor mat entrapment. This simple defect has triggered the recall of 10 million cars worldwide, and caused 34 reported deaths. In 2014, it was General Motors turn to face its largest safety-defect crisis. A faulty ignition switch, which caused at least 13 deaths, forced the company to recall about 16 million vehicles from its US fleet. In October 2013, a Tesla caught on fire after hitting debris on a highway. The scene was recorded and immediately broadcast on the internet. The video triggered unprecedented media turmoil and led to the recall of 30,000 Tesla model S.
What these examples teach us about product recalls, in a nutshell:
- The benefits of a social recall (a social media communication strategy that demonstrates a high level of responsibility) should not be underestimated as it can play an essential role in navigating the product harm-crisis. However, it also creates a new set of challenges as poor practices while implementing this kind of communication often lead to easily preventable mistakes.
- By developing an effective channel of communication with stakeholders through social media, Tesla Motors and GM gained credibility with their customers and maintained control of their messaging, even in these most critical situations.
- Social media communication impacts the general aggregate that requires that media content precede public opinion.
- Twitter (a platform on which the audience is not limited to specific groups like social networking platforms) provides the perfect medium; it enables corporations to cut intermediaries and communicate directly with customers with a unified corporate voice, adding clarity and consistency to a company’s messaging. The cost of ignoring social media in the corporate management of a crisis is huge: it means the losing of a forceful voice, allowing other parties the opportunity to shape the brand story and influence its perception.
- The GM example demonstrates that the level of danger has no effect on the perception of the risk as long as people sense a high level of social responsibility and transparency in communication.
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