Editor’s note: Rion Martin is the marketing director of social media technology firm, Infegy, Kansas City, Mo. Dennis Syrkowski is the president of the automotive practice at Phoenix Marketing International, Rochester Mich.
With Ford recently recalling nearly 600,000 vehicles and the National Highway Traffic Safety Administration announcing an expansion of the Takata airbag recall to include 34 million vehicles, recalls continue to cast a dark shadow over nearly every major automotive brand.
While data suggests that new car sales have not suffered significantly as a result of all the media attention, survey and social media data both point to erosion of favorable brand impressions and purchase consideration.
A report published by market research firm, Phoenix Marketing International (PMI), and social media intelligence technology provider, Infegy, found several indicators that potentially foreshadow more long-term consequences as a result of continued media coverage of safety-related recalls.
Negative perceptions affect purchase decisions
GM was another automotive manufacturer that issued an expansive recall last year. According to survey data by PMI, during the height of the recall crisis for GM, of those aware of the recalls (around 60 percent of consumers), nearly 33 percent had a poor or average impression of Chevrolet. Compare that to the end of the year, when this number only slightly declined to 29 percent of consumers having a poor or average impression.
For brand consideration, at the peak of the recalls, around half of consumers in the market for a new vehicle indicated they would be somewhat-to- much-less likely to consider Chevrolet or GMC. Nearly six months later, this number dropped to one-third of shoppers.
The most telling finding from the analysis was that while negative perceptions declined in both cases, considerable amounts of negative perception persisted nearly six months after the height of the recall media attention.
A postmortem analysis of the GM ignition recall found that, predictably, throughout the year both negative purchase intent and negative sentiment spiked each time a new recall or finding was announced.
In following this string of analysis, it was recognized that the growth in the number of negative mentions generally declined after six weeks of the initial recall announcement. However, while the number of mentions decreased after six weeks, elevated levels of negative perceptions of quality and intent to purchase remained throughout the year and did not return to pre-recall standards.
The conclusion of the postmortem analysis of the GM ignition recall was that recalls have had a lasting effect on consumer perceptions of brand quality and desirability, as well as sustaining a life-cycle lasting longer than six months.
In analyzing online conversation, what seemed to make the most significant difference in the degree of consequences to consumer opinion was not how many recalls were issued but how each company proceeded to remedy the situation.
Research uncovered that the total number of recalls were not proportionate to the amount of online feedback that was generated about an automotive brand. For example, Honda, the manufacturer facing the highest number of Takata airbag recalls, had a ratio of one mention online for every 100 recalls.
On the other hand, Mazda, the brand with the fewest number of recalls, saw 13 mentions for every 50 recalls. The reason? Mazda took a significantly different approach to remedying problems with their vehicles, recalling vehicles in a select few U.S. states rather than broadening the recall to all potentially affected Mazda vehicles. Partial measures that limited repairs to only select consumers in specific geographies, as enacted by Mazda, tended to have more profound negative ramifications to public perception.
Many of the consumers surveyed were looking to purchase near-term and did not have the option of waiting to see which brands were taking the biggest strides to make quality improvements in response to the recalls. However, consumers whose in-market timing is more than 24 months have the advantage of taking more time to determine which brands have recovered and this could have long-term implications for brands that are slow to adequately repair their reputations.
Publicly demonstrating action will likely be particularly important in addressing long-term impact as it was found that continued reverberations of negative consumer response to recalls tended to be prolonged by automakers dragging their feet on implementing sweeping measures to right the potentially deadly problems with their vehicles.