Tag Archives: Toyota

Reputation Case Study, , , , , , , , , , , , ,

We previously highlighted how Toyota utilized innovative social media strategies to repair its reputation following recalls in 2009 and 2010, but more problems, including recalls in both October and November of this past year, have threatened to undo that progress. Toyota attributed these recent recalls to “its increased diligence toward quality and safety” and “fought vigorously in recent years to defend itself against claims that its vehicles were prone to speeding out of control with no warning,” according to Forbes.

The Value of Trust

Despite the historic size of the recent settlement—and the fact that the acceleration issues have not been scientifically confirmed—Toyota appears to have decided that the benefits to its reputation outweigh the cost. As the Wall Street Journal points out, the settlement “includes no admission of fault or unlawful conduct by Toyota and allows the company to avoid the risks associated with battling a lengthy trial.”

By offering support and compensation for both current and former owners of affected vehicles, Toyota is seeking to win back the trust of some of its most important customers. “This settlement is a nod to loyal Toyota owners whose car resale values were hurt by the unintended acceleration issue and the intense publicity that followed,” auto industry analyst Michelle Krebs told Forbes. Additionally, allocating $30 million “to finance automotive safety research related to driver behavior and unintended acceleration” allows Toyota to underscore its broader dedication to safety. “We concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers,” said Toyota’s Christopher P. Reynolds. “This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs.”

An Expensive Solution

With its stock on the rise and the automaker set to once again become “the world’s biggest car maker,” Toyota appears to be faring quite well. But as Pepperdine University School of Law professor Richard Cupp warns in a Reuters article, “lawsuits like these could become increasingly common, even where there is not provable physical injury on large scale.” On Business Insider USC Marshall School of Business marketing professor Ira Kalb offers some valuable advice, pointing out how better crisis management and communication could have lessened Toyota’s woes. “To keep the top spot,” Kalb says, “making a better car is not enough.”

 
 
Social Media, , , , , ,
LinkedIn and reputation management

Social media has played a central role in several of the most successful reputation management campaigns of the last few years.

In a recent Forbes.com article Scott Davis described how Toyota repaired its reputation following the bout of recalls that sent it plummeting in 2009 and 2010. The automaker employed a series of innovative social media strategies to engage with its customers on a personal level.

One of Toyota’s strategies was a series of Digg Dialogg Q&A sessions, which allowed the company to respond directly and candidly to customers and critics. Mashable’s Todd Wasserman said those sessions, “gave Toyota the appearance of achieving social media branding nirvana: Transparency.”

Transparency Paid Off

That approach clearly paid off, as Harris Interactive’s latest Reputational Quotient survey, published in February, ranks Toyota as the company with the most-improved reputation.

Harris Interactive’s survey reveals that few companies have seen their reputations improve lately. Joining Toyota in that small group is BP, which embraced social media in the wake of the Deepwater Horizon disaster.

Strategy Matters

Simply building a presence in social media isn’t enough. AT&T, for example, implemented an extensive social media customer service strategy aimed at rehabilitating its tarnished reputation.

The factors that separate an effective strategy from a failed one can be difficult to generalize. The best strategies seem to be tailor-made for a company, its customers, and the problems it is facing. Davis summed it up nicely: “Reputation is something that is both fragile yet resilient. The ability to spring back when it’s damaged takes a keen understanding of the factors and attitudes that shape a reputation to begin with.”