By now, you've probably heard about the disastrous worldwide recall of more than 8 million new Toyota cars. And while you may not drive a new Toyota, if you're involved in sales there is still a lot you can learn from the way the recall was handled (or, rather, not handled) in the event you ever have to face a crisis. Here are the two marketing lessons you should take away from the Toyota debacle.
- Address your problems head-on. When the problems with Toyota vehicles were first announced, it took president and CEO Akio Toyoda a long time to even say anything. Then, the company blamed suppliers and even the drivers. When a more traditional apology was finally issued, it was at a hastily called news conference, and sounded insincere to many people. As a result, the Kelly Blue Book value of the cars which were recalled have already fallen hundreds of dollars, and Toyota's competitors are taking advantage of customer uncertainty. For a brand that has spent years building its reputation and consumer loyalty, this could all be a devastating blow. The truth of the matter is, every company makes mistakes. And if Toyota had simply addressed the issue head-on, apologized, and done their best to make it right from the outset, they might have avoided the PR nightmare they are currently finding themselves in. But they didn't, and a nightmare it certainly has been. So what can you learn from all this? The financial services industry is full of uncertainty. Some products have more risks than others, and it is almost a guarantee that at some point in your career you will make a mistake – whether it be suggesting the wrong product or something administrative. The best way to handle the mistake is to admit to it, then fix it. If you try to sweep it under the rug, it will only come back to haunt you later. Foster a business of honesty and you will have happy customers who send referrals your way – even if you do make an error once every 10 years.
- Always support your product. After Toyoda's largely unsatisfying remarks at the World Economic Forum in Davos, Switzerland, the president and CEO of Toyota drove away in an Audi. In the middle of a global product recall, he was showing that even someone who's entire life was wrapped up in the company didn't have enough confidence in the product to use it himself. (And don't say it's about luxury; Toyoda could have driven a Lexus, which is also manufactured by the Toyota company.) Unfortunately, this is a trend that is fairly common in the insurance industry. For example, according to the 2009 Long Term Care Insurance Market Study by Agent Media (publisher of the Agent's Sales Journal), just 39 percent of agents who sold long term care insurance owned the product themselves. How will you be able to convince a client about the value of a product that you don't even think is valuable enough to own yourself? An interesting point to consider is that, when we looked at agents who received their primary source of commission from LTCI sales, 100 percent of them owned a policy for themselves. This proves that believing in the product will ultimately help you sell that product to your prospects.
Heather Trese is the associate editor of the Agent's Sales Journal.
