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Consumers Forgive But Don't Forget Company Mistakes

company reputation . / Credit: Reputation Image via Shutterstock

When it comes to product recalls, consumers are understanding but their patience is limited, recent research has found. The researchers cited a few key factors that will determine consumers' reaction to a company responsible for a defective and recalled product. 

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In particular, the research found consumers were quick to forgive a company for a defective product provided it was the first instance of a defect or a recall at the company.  Additionally, consumers quickly overlooked problems if the company was well-liked and if defective products were common in that particular industry.  For instance, people were less likely to pinpoint a specific company for blame within the toy and children's, automobile and health care industries, which see more recalls than other fields do.

That feeling, however, did not apply to companies that already were not well-liked by consumers, proving the importance of reputation to companies. Businesses with bad reputations were not quickly forgiven by customers even if recalls were relatively common in that industry. 

While most consumers are willing to forgive companies for one mistake, they are not as forgiving of repeated mistakes, the researchers added.  Consumers said their opinion of all companies, even the well-liked ones, would be hurt by a repeat incident of defective or recalled products.   

"It's easy to blame the company. Taking into account other possible causes for a product recall is effortful – and consumers will only do it if they like the company enough to make the effort," wrote the study's co-authors, Jing Lei of the University of Melbourne, Niraj Dawar of the Ivey Business School in Canada, and Zeynep Gurhan-Canli of Koc University in Turkey.

The findings appeared in the June issue of the American Marketing Association's Journal of Marketing Research.

Follow David Mielach on Twitter @D_M89 or BusinessNewsDaily @bndarticles. We're also on Facebook & Google+.  

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