June 23, 2009

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(Part 2, Part 3)

With his vote June 12 to move forward with the CPSIA section 104 mandate for recall-registration cards for durable nursery products, Acting Chairman Thomas Moore expressed satisfaction that CPSC was returning to exploring recall effectiveness in more than an informal capacity, saying the new process would provide a “valuable learning experience.” In 2003 – the last time CPSC publicly reviewed the goal of improving consumer response to recalls – it received much input during a series of public meetings. Following are highlights of the first meeting from the Product Safety Letter archives (company affiliations may have changed since 2003). We will look the other two meetings in coming days.

May 15, 2003 Motivating Consumer to Respond to Recalls (click to see CPSC’s synopsis)

Consumer motivation, how companies approach recalls, useful ways to measure corrective actions and how CPSC can aid in such challenges were the broad topics for a recall effectiveness brainstorming session hosted by CPSC May 15 at its Bethesda, Md. headquarters. While not coming to final decisions (and not intended to), the open discussion among 18 consumer motivation experts and numerous agency staff honed in on such concerns as changing the ways consumers think of recalls, who tells a consumer about risks, whether all recalls should be presented as involving equal dangers and what CPSC can do to motivate industry and consumers.

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Motivating Consumers: Beverly Schwartz, senior vice president, Fleishman-Hillard, suggested that effort might need to go into changing how consumers perceive recalls, somehow making their reaction to recall notices be “this is not fluff.” She also suggested that consumer’s “environmental mindset” might need to change to proactively look for recalls.

Edward Galgay, director, information risk services, KPMG, mused that it would be valuable to figure out how to get consumers to take the same approach to the risks related to recalls as with cyber viruses, which includes motivation to spend money on software that monitors and protects computers.

He said one-to-one contact – if possible – is likely to generate the most consumer reaction, and two methods are via call centers or e-mails. Geraldine Henderson, Howard University marketing professor, said it would be valuable to figure out ways to grab attention by tying messages to their particular interests. For example, for her, the name of the Coach brand in an e-mail is likely to grab her attention. Is there a way to tap into such reactions? There also was discussion of tailoring messages to segmented audiences like parents or homeowners.

Such approaches would require extensive demographic collection, and Mike Lawrence, executive vice president, Cone, Inc., wondered if such “abuse” as seeking too much data on warranty cards for marketing purposes may already have undermined such efforts. He suggested targeting particular product-interest groups and using them to spread the word on recalls. This is even possible to a degree, added Schwartz, with products like washing machines that may not have user groups – there are homeowner groups, and those are places to start.

Perceptions of Risk and Benefit: Those doing recalls need to ensure consumers have a realistic assessment of risk to motivate them to action, said Carol Krause, senior vice president, Matthews Media Group. She noted that from her experience in women’s health, that while heart disease is more prevalent, motivation is easier on breast cancer.

Perception of risk depends on who the messenger is she said, so behavior-changing efforts work well at the community level coming from trusted sources. Friends and relatives typically have trust. She also emphasized that simple steps work best – recalls that involve the consumers taking products back to places of purchase may not work well if people must remember which store among many they bought the product.

Dick Hyde, executive vice president of corporate communications, Hill & Knowlton, agreed, noting that while effective risk motivation involves it being by trusted sources, it also requires conveying control and benefit – what the consumers can do make change and how taking action benefits them.

Carol Pollack-Nelson, president, Independent Safety Consulting, said that two broad sets of factors come into play in motivation. First are natural factors involving perceptions of hazard severity and vulnerability to it, a sense of control (including confidence in not acting) and investment concerns, like losing use of the unit or inconvenience in returning it. The other set involves external inducements, and these must go up when the natural ones do not motivate. She observed, for example, that low price products are hard motivation challenges – it is not worth the time to put them in boxes to send them back.

Henderson agreed “source attractiveness” will affect consumer response, and she noted that the importance of the product to a consumer will play a large role. Mention of certain products simply will get the attention of certain consumers, and it is impossible for them to stay in “hyper alert” for all recalls.

Recall Overload: CPSC oversees 300 to 350 recalls a year, meaning that consumers might hear too little about too many recalls. On one hand, a single news blurb, as opposed to a recurring reminder of a particular recall, likely is not sufficient to get response. On the other hand, the recalls, approaching one a day, can become ignored.

Krause suggested the agency prepare lists and related video news releases about recalls in product groups for regular play on local TV stations. As a former TV journalist, she assured that they would get used. However, warned Lawrence, there is risk that such lists could be used by irresponsible reporters for scare-tactic sensationalizing, which would undermine the credibility of recalls.

Pollack-Nelson said that the consumer’s perception of the effort put into the recall publicity also will drive response. A lot of perceived effort will generate more attention, but CPSC and the companies need to take care not to exaggerate their concern, or they will lose credibility. Recognizing levels of recall severity might play a role here.

Unequal Recalls: While CPSC does have an internal classification system for recall severity, it does not use it in publicizing recalls. The concern, according to CPSC Recall and Compliance Director Marc Schoem, is that the “C” level recalls still involve danger to consumers, and CPSC does not want to undermine those recalls. Nonetheless, the group discussed whether there ought to be external classifications. Robert Teufel of the Direct Marketing Association suggested storm warnings as a model. The phrase small craft advisory conveys a different danger than hurricane does, but both terms convey concrete dangers boaters know how to approach. On the other hand, warned Pollack-Nelson, people have trouble remembering rankings of terms like warning, danger and caution. Krause noted that consumers are assessing severity anyway, based on mention of whether there were injuries or deaths, so why not further aid judgments? Schwartz suggested a related matrix system that took into account various factors in a recall – risk, price, product size, product life, etc. – to use in assessing needed tactics.

Preparing the Companies: There may need to be change in the ways companies prepare themselves for recalls. Galgay noted that they need to have systems already in place – crisis management, disaster recovery, etc. – that include recall management.

Hyde agreed, saying that companies need to think through ahead of the fact how they will communicate recalls, including to their distribution chain, employees, shareholders, and customers. There must be benefit to all those groups, and there need to be mechanisms for making recalls non-loss events. He also noted that CPSC’s promoting best practices in recalls by companies has value.

Turning Bad to Good: Companies want to be known as being responsible, and recalls present chance for that, pointed out Galgay. Lawrence agreed, noting that consumers are sophisticated enough not to expect perfection; the real test is handling failure. Krause suggested CPSC consider rewarding companies with inclusion on lists of cooperative companies or responsible recallers. She also suggested similar lists for retailers

Retailers’ Roles: Besides being points of contact with consumers, the panel wondered if there were other roles for them. One possibility is tying new purchases to tailored recall notices. For example, a buyer of infant formula is likely to own baby related products, so set up a system similar to cash register coupon generators. Galgay suggested advances in product identification technology may aid efforts in secondary markets.

Measuring Recalls: Return rate may not always be the best measure of recall success, especially in recalls involving low risk, low cost or short product lives. Indeed, noted Pollack-Nelson, expectations should be tailored based on such factors. One alternative, said Schwartz, is measuring awareness of the recall. This includes, said Pollack-Nelson, learning whether the message was received and whether it was understood. Another indicator is the number of post-recall incidents related to the product.

(Part 2, Part 3)

Portions of this article appeared in the May 19, 2003 edition of our premium sister service, Product Safety Letter. It is just one of the hundreds of similar stories that subscribers read over the course of an annual subscription. Subscription information is here