A recent Reuters article titled Toyota grapples with PR bungles, tarnished brand highlights what customers expect in a crisis and how badly Toyota has handled this crisis.
“People want to see a company take full responsibility, be empathic to the victims and their families and be in control by outlining the problem and how they intend to solve it. They also expect the CEO doing all this,” said Ong Hock Chuan, a technical adviser of Jakarta-based PR consultancy Maverick who specializes in crisis management.
“Toyota seems to have failed in all counts.”
In addition, the latest woes from Toyota is the claim that current Prius owners may have a problem with their braking systems. The Prius model was not implicated in the Toyota acceleration pedal issue. See the NY times article called US Starts Inquiry Into Brake Problems in Prius.
The issue I find most damning in this article, is that Prius has fixed the problem in the new Prius’ being manufactured since January 2010 but they have no action plan for the Prius drivers already sold. Toyota’s manager in charge of quality, Hiroyuki Yokoyama said the company was still considering what actions to take for cars already on the road and had not ruled out a recall.
The Business Journal says a Japanese newspaper is reporting that Toyota will recall 270,000 Prius hybrids with no confirmation from Toyota. Ford, has examined its hybrid models braking issues and quickly announced a software fix for its 2010 Mercury Milan and Ford Fusion hybrids. Why isn’t Toyota responding quickly? A CNN article says it best: Prius brakes: Toyota knew, didn’t tell you.
Another recent development is the appearance of the Toyota Motor chief executive Akio Toyoda on Friday Feb 5, 2010 to apologize, his first appearance in two weeks. No recall of the Prius was announced at this time (they are looking into it) but Lexus and Sai owners got their first indication that this problem could be affecting their hybrids as well.
What seems to be missing in this customer satisfaction action plan?
1. Lack of focus on customer complaints about defects in the cars on the road. In fact, there appears to be an attitude of keeping such issues quiet or blaming the customer.
2. As a result of #1, there appears to be a failure to notify customers of known problems, that could endanger the drivers and the general public.
3 Failure to empathize with the customer and let them know that Toyota cares about their safety.
4. Lack of action plan to fix customers who are driving affected Toyotas at the time of recall or the publicity of the problem. The action plan is ‘not available’ or ‘coming’. There is no guidance for the drivers about what to do while the fix is being created. The response “take it to the dealer’ means nothing to the consumer when the dealers have no information or fix for the problem either.
5. Failure to acknowledge mistakes were made, the analysis done to determine root causes, and the actions to prevent them from recurring in the future.
The US Government is stepping in to protect its citizens. While there is speculation that this U.S. government attention might be overblown, due to the bailout of US automakers, Toyota has certainly left themselves wide open to this kind of criticism.
Given the cost of $2 billion in lost sales and recall costs, estimated by Toyota to fix their problems, one can understand the emotions that senior executives might go through as they weigh the pros and cons about what to do about the quality issues being uncovered.
Customer loyalty is a lingering emotion so it is hard to determine what Toyota’s future is . Here’s a interesting video about customer reactions titled: Toyota’s customers keep the faith
Sadly I think this controversy over Toyota and its customer satisfaction and reputation will continue for some time.