Shocking Product Recalls! How To React
Home 5 Blogs 5 Shocking Product Recalls! How To React
Shocking Product Recalls! How To React
Home 5 Blogs 5 Shocking Product Recalls! How To React

The latest news – Graco is recalling more than 25,000 car seats that might not adequately restrain children during a crash! The National Highway Traffic Safety Administration announced Wednesday that the webbing in the car seat failed to meet Federal Motor Vehicle Safety Standards. Surely this would be an absolute minimum requirement. This will no doubt cause great concern and worry among parents who believe they have invested in a safe and reliable product to keep their child safe.

Honda has recalled my wife Lorraine’s car, but they can’t fix it for ages. It is not unusual. Again Lorraine’s immediate reaction was one of worry and concern for our safety. Many of you have likely had a similar situation when Takata recalled millions of cars for faulty airbags and then faced delays getting it fixed. Not that replacing the airbag that could explode and send shrapnel into you and your passenger’s face and body is anything you need to get sorted straight away.

Sure, I’m joking, but recalls are anything but a joke. Recalls are serious business. Not only are they expensive and time-consuming, but they also have serious repercussions for your brand. Why? Two cognitive shortcuts called heuristics that help you make decisions quickly:

  •  The Availability Heuristic
  • The Representativeness Heuristic

Let’s take a closer look at how these two heuristics are affected by product recalls.

The Availability Heuristic

The availability heuristic is an intuitive thought process that helps us make sense of things we do not understand. It describes the amount of importance we assign to an incident and how likely we think the same event is to recur based on our ability to remember it. An example could be a plane crash. If a one plane crash is in the news, we might think another plane crash is imminent, despite knowing that plane crashes are rare.

The Representativeness Heuristic

The representativeness heuristic helps us make judgments about how likely something is to happen when we are not sure. We take known examples and make them representative of the whole of something. The term was introduced by Psychologists and Research partners Amos Tversky and Daniel Kahneman introduced the term. Like the availability heuristic, we use this cognitive shortcut because the memories are easily accessible, meaning remembering them doesn’t require deep thinking. However, we misjudge how accurate predictions based on this heuristic will be. After all, as Tversky and Kahneman pointed out in their research back in the 1980s, just because something is more representative of an experience does not make it more likely to recur.

If you read about the Takata airbag recall, you will learn that in one instance the air bag exploded while stopped at an intersection, which is terrifying. Because of this story’s memorable nature, we make that one instance representative of the whole Takata problem, i.e., the Takata airbag could explode without warning. Most of the other exploding airbags occurred during an accident. But that fact isn’t as memorable, so we don’t consider it representative (even though it is).

In other words, the availability or representative heuristics aren’t going to lead to anything good for your brand right after something negative has occurred for your product.

Three Things to Do When Facing a Recall

The best thing to do is never have a recall. However, you can’t always avoid one. Therefore, the next best thing to do is have a plan to handle the recall should it become necessary. Here are three things to do when facing a recall:

  1.  Be honest with your customers. A friend of mine always says, “Have the difficult conversation up front.” It is not only good advice, but it is also the first step to having a “successful” recall. Honesty is the best policy, and it pays off in the medium- to long-term.
  2. Act quickly. Wasting time doesn’t improve the situation. In fact, most unpleasant situations surrounding a recall only get worse with time. As Mark Twain said, “If you have to swallow a frog, don’t stare at it too long.”
  3. Ensure you have the infrastructure to deal with it. It’s bad enough you have a recall; if you flub the process of rectifying it, you will have to swallow a lot more frogs than if resolution goes smoothly.

The Honest® Approach Works

Big name brands have fumbled the recall process in the past, Volkswagen and Fiat to name a couple. They were not honest and they did not act quickly. It hurt their brand and bottom line. Both paid enormous fines and settlements because of their dishonest inaction. Fiat paid $175 million in fines and Volkswagen’s total tab is still collecting fines and class action lawsuits.

The Takata airbag recall is another example that reflects poorly on automakers reaction time and honesty. A class action lawsuit in Florida asserts that Ford, Honda, Nissan and Toyota all knew for years the airbags were defective but used them anyway to save on costs. Honda denies it outright and the others said their legal teams would respond. Time will tell who knew what and when as this plays out in court.

Not all companies blow it. One of my team members subscribes online to receive Honest® Company products, an organic soap and household product company. Honest also has baby supply items, and she bought the baby wipes. A couple of weeks ago, she discovered through an email from Honest that the wipes were voluntarily recalled, because they found some wipes had mold present. She used the wipes, which didn’t appear to be moldy. Despite the voluntary recall initiating from an “abundance of caution,” and the absence of mold in her experience with the product, she is reluctant to order the wipes again.

However, she does appreciate that Honest takes responsibility when a product doesn’t meet their highest standard of quality and that they let her know about it upfront. She feels like they are, for lack of a better word, honest. She remains a loyal customer and continues to order many of their other, mold-free products.

Recalls are not great for the customer or the company. However, waiting too long to recall or being dishonest about it is not great either. Moreover, bungling the process can make it even worse. Each incident piles up to create a negative and easily accessible memory that becomes representative of your experience in your customer’s mind. Instead be honest, quick, and efficient to achieve the best possible outcome so all your customers recall about the recall was how happy they were with how you handled it.

Has any organization done a good job with a recall for you? What made it great? We would all love to hear your insight in the comments below.

To read more about how heuristics affect our behavior as customers, read my latest book The Intuitive Customer: 7 imperatives for moving your Customer Experience to the Next Level. Co-written with Professor Ryan Hamilton from Emory University, we explore how psychology affects our buying decisions and how you can create a Customer Experience that appeals to these influences. Read more here.

 If you liked this article, you might also enjoy these:

VW to Buy Back Cars and Learns Cost of Lying

Fiat Chrysler: The Latest Car Brand to Wreck Customer Trust

Act Now to Turn Customer Pain Points into Pleasurable Profits

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX