Toyota and BP: Surviving the crisis

July 12, 2010 at 8:17 pm Leave a comment

By Judi Schindler, Principal

As both Toyota and BP wage war to preserve their brands in the face of colossal crises, my money is on Toyota.

Last November, when the story broke about safety issues and mammoth recalls, the Japanese automaker violated every rule in the crisis management book by foot-dragging on safety issues, minimizing problems, distributing misleading statements and showing too little compassion. As a result, it suffered from stinging articles in the media and became the butt of every talk-show comedian.

Then, sometime in February, Toyota seemed to get its communication act together. President Akio Toyoda appeared before Congress and apologized. The company established “Smart Teams” of 200 engineers to investigate individual issues and appointed nine quality officers worldwide who could answer media questions

It created webcasts to respond to critics regarding gas pedal and electronic system issues and launched a website designed to address the issues. One of the most effective sites features video interviews of Toyota owners who have brought their cars in for recall repairs – all of whom express confidence that “if something is wrong, Toyota will fix it.”

Then there’s BP, whose issues are massive and ongoing. Worst of all, top management at the petroleum company seems to compound one misstep (or misspeak) on top of another.

On the other hand, BP hasn’t done everything wrong. The company has a well-executed  website, which includes videos, photos and press releases on the cleanup, where you hear first-hand from the individuals who are out in the Gulf every day working to contain the damage. (One video features actor Kevin  Costner praising BP’s efforts.) There are also state-by-state updates, claims forms and information on how to file a claim.

Both the BP and Toyota websites get high marks. But let’s assess the damage to the two brands.

There is no question that the carmaker’s consumer loyalty has slipped, but in the first quarter of 2010, 57.6% of trade-ins resulted in purchase of new Toyota – higher than any other brand. Sales have also recovered, up 24.4% in April, and in May the company reported net profits were 48% higher than the same period in 2009.

The public is not quite so forgiving of BP, especially since the crisis situation has yet to be abated. On June 21, several dozen demonstrations took place in cities across the country as part of the “Worldwide BP Protest Day,” a Facebook group that claims to have more than 350,000 supporters. Four days later, on June 25, the company’s stock hit an all-time low of $28.56 low, down nearly 53% since April 20.

So what’s the prognosis? In my opinion, the general public is more favorably disposed to Toyota than to BP. Toyota has a long history of building reliable automobiles and providing good service. It has happy car owners. Energy companies, like BP, do not enjoy the same favorable image. While BP had a better reputation than most oil companies, the entire industry has a reputation for price gouging and air pollution.

Toyota simply has a larger storehouse of goodwill, and, frankly, we are more willing to forgive someone we like.

The moral of the story is that crisis management must begin long before a crisis ever occurs – by building a reputation for dealing responsibly with the consumers, by behaving like a good corporate citizen, by providing reliable products and services and by communicating openly and candidly with its many publics. In other words, a company that nurtures and maintains good public relations over a period of years will have a better chance of surviving a crisis than one that doesn’t.

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Entry filed under: Diabloguer.

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