June 5, 2010
Twenty years ago this month James "Buster" Douglas knocked out Mike Tyson in one of the biggest upsets in sports history. Tyson's loss to Douglas was the first blemish on his otherwise impeccable resume. That unexpected event in sports is what the current Toyota situation is reminiscent of. This is a fair comparison since the unintended acceleration recall is Toyota's first real stain in over 50 years of mostly unmatched success in the U.S. market. If Toyota has anything left in the tank, it needs to come out of the corner swinging to recover from this fiasco.
When lives are lost due to defective products, consumers panic and have no qualms about simply washing their hands of a brand all together. They possess that power and will wield it any time it's necessary. Just ask Ford Explorer circa 2000, Tylenol circa 1982, or Trans World Airlines (1996).
Through Jumpstart Automotive Group's in-market shopping and influencer sites, we're seeing this overpowering effect on Toyota occur immediately. We analyzed the transgressions of the Toyota brand over the past few days, uncovering some intriguing points of interest. Over 1,000 responses were tallied to reveal that the Toyota brand is currently in need of serious life support, with in-market consumers swiftly shying away from considering a Toyota vehicle.
The results of a recent poll of Jumpstart's automotive site visitors indicated the following:
Toyota's shopping activity has also fallen in the past week by 11% on Jumpstart properties, indicating waning interest in the typically stellar brand.
For Toyota's marketing leaders and crisis managers, the work needs to start quickly and with complete transparency. History has proven time and again that honesty is the best policy in winning back disenchanted consumers. This is a country that wholeheartedly believes in second chances — professional athletes (see Michael Vick, Kobe Bryant), and even brands like Tylenol and Explorer have surged ahead after public thrashing. We listen to apologies and applaud honesty. We forgive, we forget, we move on.
For the near term, however, Toyota will inevitably lose market share to its competitors (already reportedly down 16% in January year-over-year, when direct competitors were ahead). Previously loyal Toyota/Lexus owners will begin to explore other options (Polk recently ranked Toyota No. 1 in Overall Manufacturer Loyalty for 2009). Toyota's largest challenge will be winning back the defectors, and the amount of time and marketing dollars that it takes will likely be costly.
Who will win over the disgruntled Toyota customer?
We asked consumers on Jumpstart properties who indicated they've eliminated Toyota from their consideration set. The results overwhelmingly favored the domestic auto companies — over 80% of the respondents named a Ford, Chrysler or GM brand.
This data provides some interesting perspective about the mindset of U.S. car shoppers. It seems they've been waiting for a reason to support the domestic auto brands and experience what these brands have to offer.
It looks as if this Toyota debacle will present its competition an opportunity greater than any incentive, clunker program or savvy marketing campaign. In fact the Detroit Three, as well as Hyundai, is offering thousands in incentives for Toyota owners looking to buy a new car.
In the spirit of the Super Bowl, Toyota has committed a turnover, and after a long, drawn out period of playing nothing but defense, the domestics are now on the offensive.