By now most of you have probably heard about the much-discussed reports of new Samsung Galaxy Note 7 phones catching fire or even exploding due to an issue with its Lithium-Ion batteries.
On September 2, just days after the first incidents have been reported, the South Korean tech giant announced a global recall of 2.5 million phones promising replacements.
As Samsung’s market value plummeted, dropping by as much as $14 billion since the announcement, the company has switched into damage control mode. But how well is it handling this PR crisis?
Initially, Samsung was praised for its fast and decisive reaction to the reports. However, after two weeks, the company has yet to provide consumers with a specific timeline on when they might expect replacements for their recalled handsets.
Understandably, Samsung’s communicators are in a very difficult position right now. Such a massive recall comes with predictable challenges of having enough supply and coordinating the logistics of replacing millions of phones across continents. Trying to control the reputational damage to the brand, while providing clarity and piece of mind to customers on such a massive scale is truly a monumental task for any crisis communicator.
In the meantime, this PR crisis couldn’t have come at a worse time for Samsung, as its long-standing rival Apple unveiled its newest flagship iPhone 7 last week.
As the holiday season is rapidly approaching, Samsung needs to take steps to resolve the issues surrounding the battery and be able to effectively communicate with customers to assure them that their products are safe. Moreover, Samsung needs to engage more closely with government regulators and retailers, some of whom were still selling defective phones days after the recall announcement.
Even if the company manages to pull off a successful recall of all defective phones before more serious incidents occur, Samsung’s communications team will need to deploy a comprehensive PR strategy in the coming months aimed at regaining consumers’ confidence and trust.
In such an extremely competitive industry with increasingly thinner margins it is difficult to overestimate the importance of effective communication between the company and its stakeholders. And even though Samsung has plenty of assets to help cushion the recall’s financial impact, how fast the company’s reputation will be able to rebound from the ongoing crisis will depend largely on the effectiveness of its PR team.