They're one of my clients. Laura Ries writes about what has happened this week:
McDonald's Goes Above & Beyond
It seems that no brand is safe these days. From Toyota, the world’s largest car maker. To Tylenol, the country’s largest over-the-counter drug. To McDonald’s, the world’s largest fast-food chain.
Each of these three brands has suffered massive recalls with the potential for massive brand damage.
That said, even if its response to a disaster is less than perfect, a leading brand has an amazing ability to survive. Consumers believe the leader is better and runs a better company than its competition. As a result, consumers are willing to give the leader the benefit of the doubt. Consumers will almost always give a leader a second (or even a third) chance to make things right.
One catastrophe won’t normally bring down a leading brand. The only thing that will bring down a leading brand is continuous and escalating catastrophes. Something we haven’t yet seen. (Remember, way before the current Gulf spill, BP wasn’t the leading oil company and also had a poor reputation for safety.)
Even though a leading brand has more damage-control leeway doesn’t mean a leader should sit on its laurels when disaster strikes. A leading brand can reinforce its dominance by responding above and beyond what is expected.
That is exactly what McDonald’s is doing.
Last Friday, McDonald’s moved at lightning speed and initiated a voluntary recall of its popular Shrek glasses that contained trace amounts of a toxic metal in the paint. The tainted glasses were first discovered by a band of Moms with heavy-metal home-tests and then reported to California Congresswoman Jackie Speier and to the Consumer Products Safety Commission (CPSC.)
While the spread of the tainted-glassware story certainly posed a problem for McDonald’s, the glassware itself wasn’t all that dangerous. Chief spokesperson for the Consumer Product Safety Commission told Fortune magazine that “the product was not toxic and does not pose an acute risk to children,” adding that “the risk to consumers was very low.”
Many companies would have used this evidence to counter-attack critics. Many companies would have also shifted the blame to a supplier. (McDonald’s didn’t make the glasses and the supplier was a U.S. company. McDonald’s didn’t buy the glasses from a shady Chinese factory.)
McDonald’s did neither. In its response, McDonald’s went above and beyond. It quickly recalled all the glasses. And it is paying consumers a premium for returning them. McDonald’s will pay a whopping $3 in cash per glass. (They had been selling the glasses for $1.99 with a food purchase and $2.49 without food.)
For a company to pay above the purchase price for a recall is almost unheard of. But in McDonald’s case, the extra money is being well spent.
Paying above the price of the glasses does two things. First, it gets more of the unsafe products out of the marketplace. In a typical recall, only 10 to 30 percent of consumers respond. I imagine McDonald’s numbers will be much greater.
Two, it shows that McDonald’s doesn’t just care about the recall, it also cares about its customers. It is compensating them for the recall and making sure it gets as many glasses out of the hands of children as possible.
While Toyota and Tylenol underestimated their problems and delayed responding to them, McDonald’s has done just the opposite.
McDonald’s went above and beyond. They overestimated and overcompensated. I’m lovin’ it.
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