Product liability protocols key to managing risk
The Australian Export Finance and Insurance Corporation takes a more individualised approach and, if an exporter can demonstrate that their product is viable and they are selling to a trusted buyer, EFIC usually demands less security.
In the rare case that an export contract is negotiated that does not require a warranty bond, it is still wise for the exporting business to have 100 percent of the value of the product in reserve. As Ross Campbell, whose company provides crisis management for businesses, believes, “something will go wrong, sometimes”.
Product recalls and damaged brands
The key to maintaining your brand reputation during a product recall crisis is the efficiency of your recall and the strength of your public communication. Campbell believes that it is good business sense to plan ahead for the possibility that something might go wrong with your product. “It won’t happen that often but when it happens it can be vicious,” he says.
Exporters should have a ‘war chest’ of planning that can be implemented if a crisis occurs. Identify the key threats in advance, whether it is criminal tampering, product failure, a manufacturing fault or an error in information. Build benchmark communication strategies, prepared in Australia in line with local language and culture, that deal with these threats.
“They can virtually be brought out and drip-fed according to the escalation process of the product recall,” Campbell says. Businesses need a clear process in place that will halt production, pull products off shelves and retrieve products already sold from consumer hands.
Be prepared
In any product crisis, a business needs to communicate well with their customers. If recalling products from an export market, businesses need to be prepared to communicate with the government, regulators, retailers and the media. Campbell reminds Australian exporters that they are seven or eight hours away from even the closest export markets so businesses should have a local spokesperson trained to deal with a crisis as it breaks, in each of their markets.
“Once you’ve built your risk analysis properly, you can do most of the work before it happens.” He recommends having a crisis management team learn the product recall process by doing a couple of dummy runs so “they know who is going to interface with customers, they know who is going to interface with the media, who is going to talk to the regulator, they know how they want the information to flow in and out. All of that should be like clockwork because, like any good sporting team, you practise”, he says.
Planning for crises helps protect your market, maintain your brand reputation and business continuity. The more risk analysis and consequent planning your company has done, the better your communication will be in a time of crisis. Good communication and clear procedures will help restore public confidence in the event of a problem.
The biggest imperative
Rebuilding your brand is the biggest battle after something goes wrong. According to Campbell, it is essential for a business to have planned out how to go about rebuilding its corporate image in the wake of a crisis.
The rebuilding work should begin as soon as the crisis management plan rolls out. In the case of a product recall or product liability suit a company needs to reassure its market, explain how it will manage the problem and how it will prevent similar issues in the future.
There are countless examples of businesses that have never recovered from a product crisis. If you don’t want to be one of them, plan for brand recovery from the beginning and test scenarios. Campbell calls it product recall theatre. “In other words, do it. Act it out. Find the gaps. And continue to improve your plan.”
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