seems that no brand is safe these days. From Toyota, the world’s largest car
maker. To Tylenol, the country’s largest over-the-counter drug. To McDonald’s,
the world’s largest fast-food chain.
of these three brands has suffered massive recalls with the potential for
massive brand damage.
said, even if its response to a disaster is less than perfect, a leading brand
has an amazing ability to survive. Consumers believe the leader is better and
runs a better company than its competition. As a result, consumers are willing
to give the leader the benefit of the doubt. Consumers will almost always give
a leader a second (or even a third) chance to make things right.
catastrophe won’t normally bring down a leading brand. The only thing that will
bring down a leading brand is continuous and escalating catastrophes. Something
we haven’t yet seen. (Remember, way before the current Gulf spill, BP wasn’t
the leading oil company and also had a poor reputation for safety.)
though a leading brand has more damage-control leeway doesn’t mean a leader
should sit on its laurels when disaster strikes. A leading brand can reinforce
its dominance by responding above and beyond what is expected.
is exactly what McDonald’s is doing.
Friday, McDonald’s moved at lightning speed and initiated a voluntary recall of
its popular Shrek glasses that contained trace amounts of a toxic metal in the
paint. The tainted glasses were first discovered by a band of Moms with heavy-metal
home-tests and then reported to California Congresswoman Jackie Speier and to
the Consumer Products Safety Commission (CPSC.)
the spread of the tainted-glassware story certainly posed a problem for
McDonald’s, the glassware itself wasn’t all that dangerous. Chief spokesperson
for the Consumer Product Safety Commission told Fortune magazine that “the
product was not toxic and does not pose an acute risk to children,” adding that
“the risk to consumers was very low.”
companies would have used this evidence to counter-attack critics. Many
companies would have also shifted the blame to a supplier. (McDonald’s didn’t
make the glasses and the supplier was a U.S. company. McDonald’s didn’t buy the
glasses from a shady Chinese factory.)
did neither. In its response, McDonald’s went above and beyond. It quickly
recalled all the glasses. And it is paying consumers a premium for returning
them. McDonald’s will pay a whopping $3 in cash per glass. (They had been
selling the glasses for $1.99 with a food purchase and $2.49 without food.)
a company to pay above the purchase price for a recall is almost unheard of.
But in McDonald’s case, the extra money is being well spent.
above the price of the glasses does two things. First, it gets more of the
unsafe products out of the marketplace. In a typical recall, only 10 to 30
percent of consumers respond. I imagine McDonald’s numbers will be much
it shows that McDonald’s doesn’t just care about the recall, it also cares
about its customers. It is compensating them for the recall and making sure it
gets as many glasses out of the hands of children as possible.
Toyota and Tylenol underestimated their problems and delayed responding to
them, McDonald’s has done just the opposite.
went above and beyond. They overestimated and overcompensated. I’m lovin’ it.