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.
Samsung Galaxy Note7 Crisis Communications Timeline
Date | Event | Source |
19-Aug-16 | Samsung Galaxy Note7 global launch | Samsung press release |
Late August 2016 | First consumer reports of Note7 fires on social media and tech forums | Consumer reports; tech media |
2-Sep-16 | Samsung announces global recall and exchange program for ~2.5M units | news.samsung.com/us/official-statement-samsung-galaxy-note7/ |
7-Sep-16 | Apple announces iPhone 7; Note7 crisis overshadows Samsung commercially | Apple; multiple tech media |
15-Sep-16 | U.S. CPSC issues formal Samsung Galaxy Note7 recall notice | cpsc.gov/Recalls/2016/Samsung-Recalls-Galaxy-Note7-Smartphones |
5-Oct-16 | Southwest Airlines flight evacuated after replacement Note7 smokes on board | Multiple news reports, October 5, 2016 |
10-Oct-16 | Samsung halts Note7 production and permanently discontinues the device | Samsung official statement |
14-Oct-16 | U.S. DOT and FAA ban Note7 from all commercial flights; international bans follow | FAA advisory; DOT notice |
23-Jan-17 | Samsung press conference: discloses two distinct battery defects; announces 8-Point Safety Check | news.samsung.com (Samsung Press Conference announcement) |
15-Feb-17 | Red Banyan� publishes original crisis PR analysis | redbanyan.com |
Apr-17 | Galaxy S8 launch with proactive safety communications; brand recovery begins | Samsung; tech media |
Frequently Asked Questions
The recall was triggered by reports of Samsung Galaxy Note 7 phones catching fire or exploding due to an issue with their Lithium-Ion batteries.
Samsung announced a global recall of 2.5 million phones on September 2, just days after the first incidents were reported.
Samsung's market value plummeted by as much as $14 billion following the recall announcement.
The PR crisis coincided with Apple's unveiling of the iPhone 7, and occurred as the holiday season was rapidly approaching.
Samsung's communicators faced the monumental task of coordinating logistics to replace millions of phones across continents while controlling reputational damage and providing clarity to customers on a massive scale.
Samsung needed to resolve the battery issues, effectively communicate with customers to assure product safety, and engage more closely with government regulators and retailers who were still selling defective phones days after the recall announcement.
Samsung's communications team would need to deploy a comprehensive PR strategy aimed at regaining consumers' confidence and trust in the months following the recall.
