In 2009 Interbrand named Toyota the 8th best global brand in the world. The automaker has held onto a position in Interbrand's top-10 list for many years, but experts say that its ranking could slip if Toyota fails to use this calamitous recall of 8.5 million vehicles as an opportunity to solidify its customer relationships.
According to Bill McEwen, global practice leader, brand management at Gallup and author of Married to the Brand, Toyota's ranking will most likely slip. By how much is the real question. "It's not a question of where they are, but what will they do to get back [on top], and is it possible?" McEwen asks. "The two foundations of a relationship are confidence and integrity. I think they've probably taken a shot on confidence. With integrity, it's how quickly they respond when a catastrophe arises."
Toyota has come under fire in recent weeks when it was late to respond after several reports of its vehicles crashing due to the gas pedals sticking. The delayed response by Toyota created opportunity for panic when U.S. Secretary of Transportation Ray Lahood told Toyota owners to "park their cars." The lack of response also left Toyota owners scratching their heads about their options. "The perception now is, 'Gee, I thought they were different in terms of attention to detail,'" McEwen says. "They didn't' seem to pay attention to the fact that they made an error. They got smacked in the hubris a bit."
McEwen and industry experts believe that Toyota can turn this situation around with a laser focus on the customer. Jeremy Anwyl, CEO of Edmunds.com, calls the current situation a wake-up call for Toyota, saying the automaker can leverage this period as an opportunity to create loyal customers and prospects. "They need to be proactive and reach out and don't wait for customers to call them," he advises.
He suggests that Toyota take an example from its own history book when it launched the Lexus brand 20 year ago. At the time, if customers experienced problems with their new vehicles, the dealerships dealt with them proactively by visiting their houses, turning a potential negative experience into an opportunity.
In Toyota's case, Anwyl recommends that the dealerships contact customers via email, phone, or mail, every few days, updating customers about which vehicles are safe to drive and listing the steps customers should take to rectify any issues. "That's what's been kind of missing here—there's so much misinformation lying around."
Katherine Kress, vice president of marketing solutions at Urban Science, a CRM vendor with a large automotive customer base, says that dealers are inundated with customer calls, and with customers receiving one bad piece of news after the next, consumers are concerned. This is a chance for Toyota and its dealerships to provide "above-and-beyond" service, she explains. "It's an opportunity to build better customer relationships,: Kress says. "This is a critical time for Toyota dealers to work with the OEM and look to form the right partnerships to make sure they get out consistent communications."
Randy Berlin, global practice director at Urban Science, suggests that in addition to sending proactive communications, dealers should provide 24/7 service and makes sure their mechanics receive proper training. "This really is an opportunity for them to see all their customers in a very stressful situation, but if they handle it appropriately, it could end up being a positive for that dealer/customer relationship," Berlin says.
As of February 8, Toyota seemed to be doing just that. The company announced on its website and via advertisements that it will begin sending letters to owners involved in the recall to schedule an appointment with their dealers. In addition, dealerships will have extended hours, with some open 24 hours per day, and specially trained technicians will be making the repairs.
Taking such steps is a good start to turning around a potential negative brand perception, but it's even more important how customers perceive Toyota three to six months from now, according to Bruce Temkin, vice president and principal analyst, customer experience, at Forrester. In about a month he plans to measure Toyota's performance against his CARES (communications, accountability, responsiveness, empathy, and solution) model, which he says bears the five critical elements to service recovery. "[Toyota] has to remain true to the customer the entire time and they will be fine," Temkin says. "Toyota has to do a good job in keeping everyone in their ecosystem—employees, factories, and dealers—focused on the long term to keep customers satisfied."
According to Gallup's McEwen, in order to recover, Toyota has to exceed what is minimally required. "It's not just 'let's bring these things in and fix them,' but 'what else can you do? What is your promise moving forward?'" I think they have an opportunity to establish ongoing relationships with customers as individuals and not just as sources of income. That is something they haven't been doing all along," he adds.
That's easier said than done. In restoring integrity and removing doubt from customers, Toyota must also overcome its own culture of deference, which McEwen calls an "ego-centric" organization. In addition, it must conquer larger problems like the implications of being stretched into so many automotive categories, which hampers Toyota's ability to respond to issues.
Edmunds' Anwyl, however, points the finger at an inconspicuous suspect in the slow response to the breakdown of the vehicles—the absence of data. He explains that in many cases, when consumers file complaints with the National Highway Traffic Safety Administration, they use different terms to report a single problem. Often, until problems are replicated, automakers have difficulty locating triggers to diagnose problems.
While Anwyl is unsure whether or not NHTSA leverages sophisticated data analytics, he recommends that initially the organization start overhauling the form process, asking questions that provide more clarity. "They need to step back and…figure out how to collect information that is more comprehensive," he says. "Instead, unfortunately, congressmen will probably use this as an opportunity to get on the evening news to talk about highway safety."
Note: Toyota was unavailable for comment.