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A product recall can create agony for a startup, but the most significant risk is not executing the recall itself.
Instead, how you communicate with your customers, staff, and the government will determine the long-term financial impact on the company.
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Companies should plan to establish a process for recalls. Planning should include customer communication, supply-chain investigation, government communications, and legal response.
A recall involves sales, public relations, production, legal, and your research-and-development team. Ensure to integrate crisis planning into your continual monitoring of products, ingredients, and supply chain.
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Great leaders overcommunicate, whether they are strengthening the brand identity of a company, the brand belief by employees, or solidifying the support of a board or investors.
When explaining the situation,ย break it down into chunks: what happened, why it happened, what you are doing, and why people can trust this will not happen again. It's not impossible to restore customers' faith. You can neutralize a crisis and make your customers believe in the long-term vision.
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A product recall is not about you. It's about making it right for your customer. A brand that spends all their energy trying to cover their tracks may find their integrity questioned.ย
Business owners should consider the Trust Equation - credibility, reliability, and intimacy divided by self-orientation. The more self-interest a company conveys, the less trust they convey.ย
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