Tuesday, October 19, 2010

Can a Product Recall Help Your Brand?

New research suggests that how your firm handles a product recall cannot only help preserve brand equity, but perhaps even enhance it. Consider these findings from research conducted by Chris Malone and his colleagues at Relational Capital Group, in conjunction with Dr. Nicolas A. Kervyn at Princeton University and independent market research provider Candice Bennett & Associates. Here is Chris Malone's description of the findings:

In September 2010, my firm, the Relational Capital Group, collaborated with Dr. Nicolas A. Kervyn at Princeton University and independent market research provider Candice Bennett & Associates to conduct an online survey of 1,000 U.S. adults regarding several recent product recalls. Importantly, we examined customer beliefs about the handling of these recalls, as well as the purchase intent and loyalty for each recalled brand relative to its key competitors.


Overwhelmingly, respondents indicated (93 percent) that product recalls reveal the "true colors" of companies and brands, presenting a unique opportunity for them to demonstrate they care more about the safety of customers than their own profits. Moreover, 87 percent agreed they are more willing to purchase from, and remain loyal to, a company that handles its product recall in an honest and responsible way. These startling findings fly in the face of our instincts to hide our mistakes from customers.

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