It is the call that no CEO ever really wants to get. The merchandise that was likely to help people get and stay active had some unintended unwanted effects.
In this instance it had been the Fitbit Force, a wristband made to help wearers understand their physical habits and make healthy changes. Soon after launch, a small % of users reported getting rashes from the devices. CEO James Park made a decision to pull the $130 Fitbit Force from the marketplace in addition to offer refunds to those that purchased them. Only one 1.7 percent of wearers experienced any problems, according to a letter from the CEO posted on the site. Other Fitbit products, including a different wristband, stick to the marketplace.
Soar Above, INSTEAD OF Survive, something Recall
The expensive decision to pull the merchandise quickly, before a media storm started brewing, is a good one. It demonstrates a company that listens to its customers and takes action. While it’s true that the rash affected only a area of the Fitbit community, its impact might have been much greater. Just how many potential buyers could have reached for a competitive device if indeed they even questioned the safety of the Fitbit Force?
That is a old approach to crisis management. Tylenol set the benchmark for consumer recalls back 1982, when Johnson & Johnson recalled an incredible number of bottles of Extra Strength Tylenol after seven people died from taking the pills. As the story goes, a killer had laced the bottles with poison and the deaths were limited by Chicago, but pulling all of the bottles acted as a precaution and put the public’s mind relaxed. In every, 31 million bottles of medicine were pulled from the shelves, costing about $100 million. From then on, new bottles were introduced that made any tampering evident, a thing that is now standard in every packaged consumer goods.
On the far side of the spectrum is Kryptonite, which ignored the issue of people picking its locks with an inexpensive plastic pen. Despite blogs and videos on this issue, Kryptonite didn’t bother reacting until a front page story appeared in the brand new York Times. Suddenly, rather than positive story about how exactly a company manages its users, Kryptonite appeared as if an uncaring behemoth.
Eventually, the lock maker experienced yet actions, recalling products and fixing the problem at around cost of $10 million. But it addittionally had a need to spend significant resources rebuilding its brand and trust with customers. Had it been proactive instead of reactive, the added rebuilding might have been avoided. It ought to be noted that it took the business 10 days to react from the first video going live.
The way to handle Negative Online Reviews
Since it happened in 2004, Kryptonite was also an early on lesson in the impact that the social channels had on consumer sentiment and news gathering. In the past, few companies had social listening campaigns set up, and that tin ear method of users is what left Kryptonite flat footed. Flash forward ten years and you’d be challenged to locate a consumer brand it doesn’t pay attention to social chatter for some reason.
The task lies in how exactly to use that information once you obtain it. In the event that you get out before a tale, just as Fitbit did, you can administer some degree of control. The organization voice becomes its trusted channel of information. In the event that you wait and let others begin asking questions, that trust shifts away.
Fitbit’s Park did everything right in his letter to customers. He wrote to them directly, spoke in plain English, didn’t make an effort to hide behind corporate speak, kept it short and even included a bulleted set of "what we realize." His letter became quoted in just about any article about them, giving him and Fitbit complete control over the story. The assumption is that after the company has more info, they’ll share it.
In addition, it means that when the merchandise comes back in the marketplace, consumers will be looking forward to it.
What he clearly didn’t do is blame his customers. That’s what Lululemon did when people started complaining that its expensive yoga pants are somewhat transparent. Instead of issuing the recall and taking blame, founder and Chairman Dennis "Chip" Wilson said that the pants just weren’t designed for some women’s bodies. Many took that to mean: Sorry, the sofa is too large for our pants. Nearly a flattering search for the business.
Of course, that is clearly a survivable faux pas, however the company’s troubles kept coming. It recently took some aggressive tactics with resellers and in addition includes a stringent return policy. All of this puts the business first and customers second.
Shareholders are actually suing, saying that the business knew about the issues and hid them. We’re left to wonder that if the business had been similar to its pants and offered some transparency right away, would its shareholders took the same action?
Regarding Fitbit, Park and his team are providing clear guidance and value with their customers. Isn’t a position that people can all envy?