I got an email with this response to my previous post comparing the Toyota case with the Tylenol case of years back from someone I have worked with for some time. I thought it was interesting because it points to an interesting aspect to the two businesses and potential impact of the situation – that being the purchasing cycle for the customer. Given that the purchasing cycle for a customer of Toyota could be 6 years or so, the lasting impact of the fallout from this could be that much more severe than the Tylenol case. Here is the email -
“Stephen, while reading this I started to think about the impact differences between Tylenol and Toyota in respect to their ” Crisis” . For Tylenol, it turned out to be a relatively short negative impact on their sales; although, I’m sure, a very costly one. Just think; during the scare people may have switched to competitor’s products like Excedrin or Advil, but before long, and once the problem was cleared up Tylenol was back on the shelves and people were buying it again. Of course a bottle of pain relievers only lasts a few months in a house with a medium size family. Whereas Toyota is going to lose Market Share to competitors like Nissan, VW, Chevrolet, etc. which will have a huge impact because people keep there cars for an average of 6 or 7 years. Even the leases will be 3 years in most cases. So what is that going to do to the long-term success of Toyota?”
I guess only time will tell – but I do think that this email has an interesting point to think about when dealing with a crisis or a bad client situation – if the sales cycle is significantly long, the reaction time might need to be that much quicker… I reflect on the businesses we have run and I do have to say that I agree with this analysis and I think it does need to be a part of every business leader’s thought process.