Remember last month when the recall of an exploding phone made Samsung the laughingstock of the mobile world? Well, that worm seems to have turned. First, some are reporting that the Galaxy’s top opponent in the marketplace, the iPhone, also has some overheating issues. But, more importantly, Samsung’s proper handling of the recall crisis created a PR win for the company.
The good feeling from customers has driven sales and profits up for the Korean electronics company. As the company engaged in its recall of the dangerously defective handsets, component sales soared, creating a net win for Samsung, who watched its operating income rise six percent over last quarter, a better result than expected.
This result shocked industry prognosticators, who expected Samsung to take a massive bath – upwards of $1.8 billion – while replacing the defective handsets. The company did, indeed, take a bit of a beating from the recall, but its quick response and focus on other areas of business allowed the company to end up better than ever.
There’s no doubt the positive result is due to a combination of smart, diverse business, and strong positive public relations. Sure, customers complained about the hassle of replacing their phones, but they appreciated Samsung stepping up more than they resented the imposition.
Beyond that, Samsung continued to release and deliver quality component products. This strong line – and strengthened reputation – caused more buyers to purchase Samsung branded equipment, even if they shied away from handsets.
While analysts expected the company to bottom out and hoped for a Christmas season rebound, Samsung’s marketing and sales teams chose not to accept their predetermined fate, and they found a way to win.
Think about the lessons here for your brand. Strong diversity of products and income streams can not only sustain you in downturns but can actually keep you making money when everyone else expects your brand to take a loss. Meanwhile, making the right call in times of PR crisis can endear you to your current customer base and actually prove to make you more attractive to others who haven’t chosen your brand in the past.
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