Toyota: Look who forgot the Golden Rule

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Who’d have thought it could happen so quickly? From the carmaker with a reputation for manufacturing the most reliable products in the world, constantly topping JD Power customer satisfaction surveys, to the laughing stock of the industry.

From first to last

Toyota has a UK advertising tagline expressly designed to make its customers feel smug and superior – ‘The car in front is a Toyota’. Now, how do you feel as a Toyota owner when the words popping into the head of the driver behind you whose eyes travel to the ‘T’ symbol on the boot of your car (and our eyes always do, don’t they) are the latest popular addition to the tagline? ‘-because the accelerator is stuck and the brakes don’t work!’ In the US, the tagline – Toyota: Moving forward – is open to exactly the same adaptation.

Thanks to the internet, this modified tagline has travelled for free, just as far as, and much faster than the expensive, ad-agency created original.



Making your customers feel stupid about buying your product is the least of what Toyota has done to its customers. Causing them to crash is the worst. Amongst a number of alleged fatalities was a family killed in their Lexus when its accelerator stuck in California.

How to apologise

One aspect that struck me about this crisis was the reluctance to accept and apologise for what was going on. When CEO Toyoda, the grand son of the company’s founder – first gave a public apology of sorts, his bow was perfunctory, and the solution – to announce a global quality committee to assess the problem – completely inadequate to the scale of the problem.

It seems that Toyota forgot the golden rule of recovering from customer complaints which is listen intently, act decisively and over-compensate. Or as Tina Waters SVP, National Customer Operations at Comcast Cable said at a presentation at Sundance recently “listen up, ‘fess up, pay up”.

Customer safety comes first

Previous examples of how Tylenol and Perrier managed crises showed that you can turn a major problem into an opportunity to strengthen your reputation with customers by demonstrating what your brand stands for at moments like this.

In the Tylenol case, Johnson & Johnson was faced with several of its customers having been randomly murdered by poison being injected into bottles of its painkiller while still on the shelves of supermarkets, followed by a ransom note telling the company the poison was in a number of further bottles and they would only be told where they were if they paid a multi-million dollar ransom.

While the crisis was still secret the Board struggled to come up with a response, until one of their number pointed to the founding values of the company; a hierarchy of interests, with the safety of customers at the top. This clarity of values and purpose made their response obvious. Johnson & Johnson recalled every bottle of its most profitable drug from every outlet. Its reputation stayed intact; in fact was enhanced and their market share grew because the packaging was modified to fit a tamper-proof top that dramatised the brand values even more.

Customers last

By contrast, Toyota refused to believe it had a problem. Dealers simply turned customers away when they began reporting accelerator or brake problems, denying that anything was wrong.

First, Toyota under-estimated the problem, then they put off a recall, erring on the side of short-term profit management, and still they haven’t clarified exactly what the problem is. Initially, it was said to be the car mats under the driver’s feet (!)



Now, it’s thought to be a software problem. So, hundreds of thousands of Toyota owners are left not knowing whether their car is safe to drive.

Marketing Magazine called into the Toyota Customer Service Centre purporting to be a worried customer to test their response. They reported their experience in the last edition awarding a rating of 2 out of ten for Toyota’s handling of their question. So it seems that Toyota is turning a drama into a crisis.

Company crises that slowly unravel as the company fails to take control of them are sometimes known as slow motion car crashes. Toyota’s ongoing crisis shows how quickly, even in slow motion, losing sight of your brand values can turn your company into a car wreck.

3 COMMENTS

  1. Shaun,

    After years of watching Toyota work harder and listen better than “the big three” US automakers who appeared mired in complacency, it was satisfying to see Toyota take a turn at the wheel. Unfortunately, it didn’t take long for their executives to forget how they got there.

    Great golden rule for recovering from customer complaints.

    Jeff Scurlock
    RightNow Technologies

  2. There is no solution to bad products and bad service except immediate corrective action, with apologies if necessary.

    Burying one’s head in the sand doesn’t really work for ostriches, and sure didn’t work for Toyota. The Internet just works too fast, and smarter (or luckier) competitors are there to make sure the message gets out the “the emperor has lost his clothes.”

    I only wish the same dynamic would work in the soft industries, like banking and health insurance. Companies in these fields put up such a blizzard of confusing verbiage that no one, least of all themselves, can understand what’s going on.

    I’m sure Toyota and others who sell toxic products wish it were so easy for them.

  3. As a former customer care director I really enjoyed the article. Sadly Toyota is not alone in it’s corporate arrogance and indifference towards it’s customers. M&S is finally paying the price for years of arrogance. We all saw what happened to Dell and Wallmart when they lost the trust of their customers.

    What companies need to realise is that in this Internet age, any time the brand promise is out of kilter with the customer experience it’s a disaster waiting to happen. Customers no longer tell 11 others about a bad experience, they tell who whole world. Could Tesco be next I wonder?

    David Rance
    Round

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