Generally speaking, it’s five times as expensive to win a new customer as it is to retain one so having a proactive product retrieval plan in place is important.
Apart from the immediate financial implications, a product retrieval can also be costly to a brand’s reputation. To protect the integrity of the brand, manufacturers and their partners in the supply chain must ensure that any customer representatives whether internal or through a third party, act as an extension of their team.
It’s important that all parties meet the highest quality standards and document every step of the process, from transporting and storing products with a secure chain of command, to handling subsequent product testing or product recalls in a regulatory compliant manner.
Clear communication is everything. It takes no time for one customer’s complaint to spread, particularly given the power of social media and the ability for messages to go viral in today’s global marketplace.
Remove the affected products from everywhere
Accurately retrieving all affected products is vital for the integrity of the brand. If products remain on shelves, in the warehouse or in homes, a company’s liability increases along with the increased risk of legal action and brand damage.
To prevent lost sales on non-affected products, companies should ensure only the affected goods are removed and not all products with the same UPC.
Typically, when a product needs to be removed from the market, manufacturers and retailers have little warning and must act immediately.
With a complex supply and distribution chain, it may not be financially feasible to hire full-time staff to manage the retrieval, particularly for SMEs and it’s tempting to use internal resources to manage the process.
However, taking staff away from their normal work interrupts day-to-day business and can actually delay the retrieval process, resulting in higher costs. Third-party solution providers who focus on retrievals are an alternative and often more efficient method of implementing a product retrieval.
Whilst it is important to be prepared, manufacturers can mitigate against the costs of a recall and should not be afraid to retrieve faulty products from the market.
Handled sensitively it is possible for a recall to demonstrate to customers that a manufacturer puts their safety above all else, and turn a negative into an opportunity to enhance and preserve brand loyalty.
Farzad Henareh is European vice president for Stericycle ExpertSolutions.
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