In early 2009, the FDA put out a massive voluntary recall on peanuts and peanut products in the United States. The FDA did not have the authority to force peanut products off the market, but they did put pressure on businesses to comply by making recalls very public.
Once the recalls were picked up by the media, vendors and stores could either comply or risk losing customers confidence.
Companies that complied with FDA voluntary recalls lost some revenue in the short-term, but they did better in the long run because compliance sent the message to consumers that their businesses were responsible and valued customer safety above the almighty dollar.
The FDA voluntarily recall of peanuts is just one example of an unexpected, outside market influence that can have a dramatic impact on sales. But it also serves as a reminder to all business owners that "owning up" to mistakes can win customers back.
How to Regain Customer Confidence
Let's assume that your business experienced some major public relations (PR) set back due to product failure, a public scandal, or a history or poor customer service that finally caught up with you. Whatever the reason for bad PR, I firmly believe that the solution is always the same: Take, take, take.- Take Public Responsibility
- Take Public Action
- Take Private Action
For examples of three major companies that got outed by Good Morning America, and how they responded to the public, read, Good Morning American Busts Three Retailers for Deceptive Marketing Tactics: How to Handle Bad Publicity With Good Customer Service.
Take Public Responsibility for Mistakes
You will rarely win back customer confidence by going on the defensive. People are naturally distrustful and as soon as they hear of some possible wrong doing will almost always believe the worst - even if it is not true!Take Public Action
Forget the inside memos, and do not wait for the press to find out you. It is always better to preemptively strike - circulate a press release or make a public announcement accepting responsibility (which is different from blaming someone else) and state some specific steps that have been taken to correct the problem and to avoid a repeat problem.Take Private Action
Brainstorm. Note that I did not say "blame storm." A successful business leader needs to identify problems but should focus on solutions rather than on the chopping block.Firing irresponsible employees is never enough to fix problems with production, morale, and corporate image.
If someone failed to do their job or did something terribly wrong, look at how and why this happened in the first place. Was management too lax? Was policy not clear? Don't just "fire the problem" solve the problem.
