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Get your recall right the first time or your reputation will suffer

Contigo last week re-announced its six-month-old recall of kids' cleanable water bottles because the drinking spout could detach, posing a choking hazard to children. Like any product recall involving a children’s product, the announcement is generating a lot of media coverage and alarm among parenting and childcare circles.

What’s most troubling about this “rolling” recall is that the “fix” in the initial recall – the replacement lids – are posing the same risk to children as they did when the initial recall occurred.

It’s always hard to say whether a recall will leave a lasting mark on a company’s reputation. But rolling, or successive, recalls of the same product increase the chances of lasting damage, or at the very least an extremely costly and drawn-out crisis. That’s exactly what happened in the recent past with national rolling recalls of children’s cribs, ice cream, and romaine lettuce.

Contigo enjoys solid brand loyalty. Several of its water bottles reside on “best of” lists like The Strategist and CNET. In fact, one CNET editor notes “the brand’s reputation of making long-lasting, stylish, functional bottles.” But a rolling recall can affect any company’s reputation.

Based on our experience, there several challenges that companies across all industries should think about and plan for when it comes to rolling recalls:

  1. Get the First Fix Right. Sure, time is of the essence when it comes to recalls. But get the fix wrong or don’t make the recall wide enough and the past will be sure to haunt you. What’s your process for identifying the right remedy for your product? How quickly can you get it done?
  2. Communicate Effectively. Consumers can be easily confused or misinformed in cases like these. Consider a hypothetical consumer who contacted Contigo about the recall six months ago and got her replacement lid. While quickly scanning headlines during warmups for her child’s soccer game, she glances at the note that the recall also involves the replacement lids, but thinks it no longer applies to her. It’s easy to see how it may be exponentially more difficult to prove to CPSC that your second recall was effectively publicized. How are you going to make sure consumers hear about the recall and take action?
  3. Double the Cost. Announcing a recall twice can mean double the financial hit, if not considerably more. Twice the cost for news releases, consumer communication, and retailer support. The cost to replace all impacted bottles – on top of the original cost to provide replacement spouts. Now consider this in the context of potential revenue. If margins on a product are tight, you can be quickly in the red at the end of all this. How will you manage the costs? Are you insured?

We’ve seen the effect of rolling recalls more times than we can count. Our experience informs our unique perspective on the risks, challenges, and often over-looked opportunities associated with these types of reputational matters.

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