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Blog

Feb 26, 2018

Recall Management Best Practices: 4 Steps to Minimizing Damage

Money flies out of a wallet, representing the damages of product recall

[Estimated reading time: 4 minutes]

As a Consumer Relations professional, worries about brand crises and product recalls often weigh heavily on your mind. And for good reason. According to Statista, there were over 600 consumer product recalls between 2015-2016 alone, and 132 companies have been fined by the U.S. Product Safety Commission since 2006. Food Marketing Institute found that the average cost of a recall for food companies is $10 million in direct costs.

On top of that, there are additional costs: pulling products from existing inventory, properly disposing of those products, loss of sales, the damage to your reputation, and fines and litigation costs. In fact, nearly one quarter of all litigation claims come from defective product issues, and companies can receive up to $11.2 million in fines from a recall.

Despite the potential threat, there are ways to set yourself up to handle these situations better. Here are four best practices to managing a recall and minimizing the damage to your company.

 

1. Identifying early warning signs

The first step towards minimizing a product recall is getting in front of it early. That means you need to have the technology and systems in place to identify when something goes wrong before it becomes a full-blown crisis. A CRM system that features threshold reporting and real-time alerts come in handy, acting as your early warning system to any potential issues. You know what volume of calls/questions are normal during normal operation hours and for new product launches. You can set up these threshold levels within your CRM and social media management software. Then, if there is an unusual increase in the amount of calls or negative mentions, your system will alert the right people that it may be time to act.


"One of our favorite parts of the Astute Social is the alerts. We are 100% committed to quality, so our volume of messages regarding highly sensitive issues, like illness, allergy, injury, hospital, etc. are low. However, with our new alert capability, we can now immediately react to urgent matters, regardless of time or our locale during off hours."

-Deb Riley | Assistant Manager of Consumer Affairs



2. Configuring your CRM system

Once you receive a proactive alert that call volume has surpassed your normal threshold, signifying that an urgent issue needs handling, the next key step to minimize the damage from a product recall is to reconfigure your CRM system to handle the crucial information for this issue. Hopefully you're using a CRM that allows the flexibility to dynamically change fields when agents are collecting case information. Giving your agents the ability to create and input new reason codes that identify this recall issue, and collect information that is relevant to this case that perhaps you normally wouldn't have captured, such as lot numbers.

3. Offsetting increased contact volume

When these situations happen, your contact volume is going to be much higher than your agents are used to handling. You can offset this by utilizing digital self-service and customer service chatbots to handle customer requests. Within your self-service interfaces, save the customer time by showing the topics related to the recall issues first. This will inform customers on the necessary steps to take, as well as deflect calls so that your agents can efficiently handle the recall.

Since you've already identified the issue at this point, rather than waiting for the rest of the affected customers to contact you, be proactive. Using customer data from your CRM, you can locate which customers purchased the specific product that is in question and push notifications to them through Facebook Messenger or your brand's mobile app. This lets them know (if they weren't aware) that there is a potential issue, and can help minimize safety concerns. Proactively communicating will also go a long way towards minimizing the damage to your brand reputation.

4. Monitoring audience reaction

How you communicate when the news breaks can make the difference between a product recall handled well and a full-blown brand crisis. Your first instinct could be to only communicate with the affected customers. It's important to respond quickly and consistently on all of your communication channels. Over half of US consumers will end business with a company that they believe is unethical. If you wait too long, you let the public shape the news around your brand, rather than owning the story. Brands that respond immediately after a negative event and issue a sincere apology are far more likely to sustain their reputation.

Once you issue a statement or take other actions related to resolving the recall, it's important to monitor the reaction of your audience. Utilizing social media management tools that track VOC (Voice of the Customer) and feature social listening tools is a must here. You can see trends in sentiment (positive, neutral, and negative) to gauge how your communication strategies are working to diffuse the reaction. Social software clusters topics that your audience is discussing, which makes it easier for your team to keep on on the topics trending related to your brand.

 

How Astute Helps

Astute's technology enables you to respond immediately and effectively to a brand crisis. Our software serves as an "early warning system" for potential crises, equips teams to respond quickly and capture the correct information, and allows brands to monitor social media reactions in real-time.

To learn more and request a demo, visit astutesolutions.com/demo.


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