More Than Recalls Are Hurting Toyota!

Unless you haven't picked up a paper or turned on a television or radio lately, you are aware of the nightmare situation that is engulfing Toyota. To date there have been two major recalls and a few minor ones that have brought the automaker to their knees. But the problems Toyota are facing are more than just fixing the millions of affected vehicles. They also have to start repairing their tarnished reputation.

When things go wrong for a company, whether they be major issues like these or just small issues that are left unaddressed, the fall out with customers often provides a more daunting, and more expensive issue for the company. Often the damage done to a company is greater than imagined because no one can accurately measure the damage of a tarnished reputation.

Since it can cost up to ten times more to bring new customers through the doors, it is critical that existing customers are not driven away by negative experiences and situations. Many companies fail to understand this and let these issues linger and fester in hopes that they are not discovered.

Let's face it. The desire to save money, sometimes huge amounts of money, in hopes that a situation will not be discovered or become an issue can be great. Often tens of millions of dollars or more are at stake. However, most serious issues do not go away and the longer the situation is left alone the higher the costs to resolve it become. Look at what Toyota is facing now.

If Toyota had responded quickly and made repairs and design changes early on, the initial costs might have been higher but they would have to fix far fewer cars, angered far fewer owners, and subjected themselves to far fewer potential lawsuits. Yes, they would have had to spend money but look at what their delays are costing them now!

Toyota is now having to pay for repairs on significantly more vehicles and lawsuits. More over, their reputation for quality has suffered a huge blow and they are now forced to offer incentives to bring owners and new customers back to Toyota. Interest free loans, advertising, public relations costs are all adding up to a huge expense for the automaker and much of these costs could have been avoided.

Lastly, no one can possibly know how many people ready to buy a new Toyota have instead purchased another brand or are no longer considering a Toyota to be worthy of their business. In Customer Service it makes no difference whether the product is a quality product or not if the public perceives it to be unreliable. Perception is just as strong as reality for a significant portion of people and that perception will often over ride anything else in the mid of the customer.

The lesson to be learned here is not how to avoid responsibility but how to handle situations with a long term focus and not hope things will just go away by themselves.

Because they very rarely do.........

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