Monday, December 27, 2010

Toyota's Recall and Crisis Management: 2010 in Social Media

The beginning of the recall: In the August of 2009 the car with Highway Patrol Officer Mark Saylor, 45, his wife, their daughter and Saylor's brother-in-law sped to over 120 mph. They were killed as their Lexus struck a sport utility vehicle and subsequently burst into flames after launching off an embankment. Investigation determined that a wrong-size floor mat trapped the accelerator and caused the crash.
Toyota recalled millions of cars to replace the faulty floor mats, which caused the accelerator to jam.
On 20th Dec, Toyota agreed to pay a record fine in the US of $32.4m (£20.8m) over its handling of millions of car recalls. This after they agreed to pay $16.4m penalty in April. Toyota has also paid $10m (£6.5m) to the family of Highway Patrol Officer Mark Saylor.
There is heightened awareness among people about Toyota cars. This heightened awareness means that any negative publicity can do a lot of damage. Although known for its supreme operational capabilities, the faulty system that put life at risk could have affected the company. This negative publicity although has not appeared to dampen the Toyota's popularity. It still remains the world's biggest selling car maker, and its second quarter profits have almost doubled.
Heightened awareness about a product can be a boom and a bane. If on one hand P&G is ramping up its social media expenditure, there have been cases when social media has gone against an organization. The network and instant connectivity can mean a lot of damage in case of a negative publicity or a rumor. Nestle is one of such cases where Social Media went anti-company
Toyota Recall Website
The Big Recall and Social Media
To save the company's reputation, Toyota's Twitter and Facebook pages pointed consumers to a dedicated microsite about the recall. They started using YouTube to do the same. But the bad news and some high profile customers such as Steve Wozniak (Co-founder of Apple) had turned to social media to express their reactions. Wozniak claimed that his new Toyota Prius, which wasn’t under the current Toyota recall had randomly accelerated. He also claimed that he could duplicate the event. Although I doubt Wozniak's ability as safe driver considering his airplane crash, such stories are many about Toyota on the social network. Many have also claimed that Toyota was slow to respond on the social network about the recalls. Ethan, a senior writer at a digital consultancy says, "Toyota has the opportunity to utilize social platforms, such as Facebook and Twitter, to manage this branding crisis, but has shown a half-hearted effort. Facebook, the largest social network, is not being utilized by Toyota to reach out to its nearly 70,000 fans."
Social Network is a highway of Information. Information of any sort, whether right or wrong, travels very quickly; and this calls for organizations to be there soon otherwise they risk having the information take control of them rather than controlling the sentiment themselves.

Social Media: Toyota's rescue and Crisis Management
Toyota's loyal fan base started a Facebook page "Defend Toyota" in context with the recall and class action law suits.
...We are fed up with the unprecidented media and class action lawyer attacks on Toyota. We are disgusted that ill informed members of Congress were sucked into the feeding frenzy. We are people that have relied on and loved our Toyotas for many years...
Although the page seemed to have a commercial motive i.e. selling 'I Love Toyota' stickers they did a reasonably good job with approximately 10% of total Toyota's Facebook fans. 2010 January also reached a landmark in terms of search queries with "Toyota" and "Recall". To control the search information, Toyota started aggressively bidding for search query terms on Google's search engine and Bing (Microsoft's search).Not surprisingly, Hyundai, Chrysler and Ford were bidding for the same key words with their sales pitch. Finally, there were interviews conducted by social networking sites (like DIGG) to authorities at Toyota. Digg Dialogg allows Digg users to submit questions to a preselected famous individual who agrees to do an interview with a reporter chosen by Digg. One such interview was with the VP of quality at Toyota (Dino Triantafyllos). The interview discusses how the company is taking major steps to become a more responsive, safety-focused organization. (see the video here) [Later in the interview Dino admits that Toyota lacked communication during this crisis. He also answers questions on social media expenditure (25th minute)]
If social media is creating viral campaigns that are organization friendly and also unfriendly, they are also increasingly questioning organizations and scrutinizing every move.
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