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3 Ways to Mitigate Recall Risk

Regulatory officials, government agencies and members of Congress are more fiercely focused on consumer safety than ever before. This intense focus is great for consumers and companies, but it means that companies now have to step up to higher standards.

Recent recalls in the automotive industry have drawn international attention and threatened brands’ global reputations. One of the lessons the recent automotive recalls have taught companies is that it’s critically important for companies in all industries to have proper plans and procedures in place before a recall happens.

 We can keep our fingers crossed and hope we’re never in a recall situation or we can proactively plan for a recall situation. Here are 3 Ways to Mitigate Recall Risks through proactive planning:

1. Monitor and Examine Consumer Complaints

All consumer feedback and complaints must be captured and analyzed. In a recent automotive recall, the company is alleged to have ignored or minimized thousands of early reports of a problem with its vehicles. Don’t make the mistake of thinking that a few complaints on a product means that the complaints aren’t valid. One complaint can trigger a recall. Constantly analyze complaint data and look for credibility, seriousness, and unexpected issues. Don’t turn a blind eye to any consumer complaint.

2.  Know and Understand the Standards for Your Products

When you know better, you do better. It’s that simple.  Stay on top of new regulations that impact your products by getting actively involved in trade associations. Large trade associations typically hold educational workshops throughout the year to help members stay in compliance with new regulatory laws and to understand how to interpret the standards for their companies. Additionally, companies should monitor The Federal Registry and news from the regulatory agencies for updates on new standards.

3.  Develop a Recall Plan

Even when the best preventive practices are in place, a company may still have to recall a product. Now, before a crisis, is the time to develop a recall plan. A recall plan needs to be developed when the company is not in crisis mode. The recall plan includes selecting a recall coordinator and committee, preparing a detailed plan of action, conducting mock recalls to test the effectiveness and speed of the plan, and revising the recall plan based on the mock recall results.

Recalls are costly, stressful and put a brand’s reputation at risk. Closely examine consumer complaints, stay apprised of regulations affecting your products, and proactively develop a recall plan. When you do, you’ll minimize the risks to your reputation and of civil or criminal penalty from federal regulators.

Source cited

Giannini, Brian and Rozembajgier, Mike, “There’s a New Recall Sheriff in Town”, Customer Relationship Management, SOCAP International, Summer 2010.