What Entrepreneurs can Learn From Toyota's Fall From Grace

Toyota entered into the US motor sales market in 1957. Fifty-three years later, they’re facing a global crisis that has ruined their reputation. A reputation built on quality and trust.

How well the award-winning car manufacturer recovers depends on two things:

1. Their efficiency (speed) with correcting the problems.

2. How well they communicate with their customers and the media.

This isn’t just an internal problem involving Toyota and their customers. It’s being played out in the media and we all know what that means – Toyota’s every response, or lack thereof, will be examined and scrutinized.

Experts Weigh in on Toyota’s Recovery

Industry experts predict that because Toyota has the resources (money) it can overcome the crisis. I’m not totally agreeing with this. Money can’t buy back their reputation and safety ratings. It’s going to take more than multi-million dollar ad campaigns to undo the damage that’s been done. Some Toyota owners have gone on record saying that after years of being loyal buyers they’re turning to other manufacturers for future automobile purchases. Toyota has failed at the one thing that set them apart from their competition. The very thing that has won them numerous prestigious awards. They’ve failed at safety. One of the leading consumer publications has suspended its “recommended” status for eight Toyota models.

The Competition Kicks ‘em While They’re Down

Did you think other automakers were going to stand by and not pounce on the opportunity to add insult to Toyota’s injury? AutoLoanDaily.com reported that General Motors is offering 0% interest rates and $1,000 rebates to Toyota owners who trade their cars for new GM vehicles. This opened the door for Ford to follow suit and offer a similar incentive. While you may not agree with these kinds of practices, all is fair in the world of business. Competing brands who successfully position themselves can gain marketshare in situations like these.

Here’s what I want you to do:

Take a look at your business. I don’t care if you’re a one-person show operating out of your bedroom or if you’re a major enterprise doing business across several different continents. What measures do you have in place right now to protect your brand’s image if you were dealt a blow like Toyota? Are you prepared to answer the questions, “Why/how did this happen? What are you doing to rectify the situation? Why should I trust you and continue doing business with you going forward?”

Learn from Toyota’s mistakes. Don’t push the pedal and accelerate the negative by being unresponsive. Resolve to face the issue head on. This is key in regaining consumer confidence.

 
Photo credit: hobbes8calvin