We hear about product recalls cost all the time, but if your organization has never experienced one it can be hard to determine how much it might cost. While the numbers will vary depending on industry, product, and any number of other factors, the graphic below (from the Rentokill blog) illustrates the four main areas you need to be looking at.
While the graphic discusses the food industry in particular these areas are found in all recalls. After all, you’ll need a crisis team every time, whether that’s made up of internal staff or outside consultants. The products will need to be removed (after all it is a recall), and the cause will need to be determined to reassure both regulators and customers. Then, of course, you have to deal with the PR fallout. Sometimes that’s simple, but if someone’s been harmed, or if your product put a particularly sensitive audience at risk – children for example – you’ll have a bit more ‘splainin to do.
This information is valuable because, combined with knowledge of your own organization, you can more accurately plan for the inevitable recall. After all, you’ll know who’s on the team, you can estimate how much it would cost to remove the product from the market, as well as investigate. And, with a faster response ready you’ll reduce the PR fallout in the end.
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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is vice president for the firm, and also editor of its newsletter, Crisis Manager]
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