Monday, November 3, 2008

How do Recalls Affect Consumer Loyalty?

A new study release by Deloitte shows that safety issues costs companies millions of revenue dollars. The study shows that when consumers hear of product safety and/or quality issues, more than half of them switch products for nine months or more, increasing the likelihood that they would discontinue the brand use entirely.

Modern consumers are less tolerant of recalls and over 49 percent are extremely concerned with product safety. Those population segments with the greatest concern are women (53%) and seniors (56% of those over the age of 55).

In addition, recent recalls from China have left the public with a distrust of items manufactured there. Over 73 percent stated they were extremely apprehensive about items manufactured in China.

To see how loyalty is affected, just look at last year’s recall issue where thousands of pets died from tainted products resulting in the largest recall of pet food in US history. Today, pet owners, even in this economic downturn, are reluctant to change to a cheaper pet food. ….

A recent article by the associated press stated “That's because many pet owners, who upgraded their kibble after contaminated pet food killed or sickened thousands of animals last year are leery of switching back…..”

So what can companies do to assure their customers that their products are safe? Consumers want safety information on the package, on the company website, and from the government. Furthermore, testing materials for consumer safety is a necessity.

Build and they shall come – But, test and assure and they will stay.

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