Galaxy Note7 recall: What can Samsung do to regain consumer trust?

Unless you’re living under rock, you would have probably heard about the latest Samsung fiasco on its latest Galaxy Note7. The timing couldn’t be worse as arch rival Apple is also busy gearing up to lock in pre-orders and arrange shipments of its latest iPhone 7 and iPhone 7 Plus models launched this month.

The South Korean tech giant took another blow when its shares fell approximately 11% since Friday, the biggest two-day decline since 2008 as investors took a defensive stance over its latest recall. That also means, a loss of US$22 billion in market value.

The situation is indeed an unfortunate one as the brand has over the years worked so hard to win over consumers in both global and regional markets. Once seen as just another Android player in the smartphone space, the brand has over the years invested heavily in its marketing tactics to be seen as a viable competitor to the iPhone.

Nick Foley, president of Southeast Asia Pacific & Japan for Landor said, Samsung has done well in building trust over the past five years especially when it comes to luring the younger generation in buying their smartphones. But unfortunately, Samsung's latest recall will definitely have an impact on the trust and credibility of the overall Samsung brand in the short to medium term, said Foley.

 The thing about trust is that it takes years to build, but can be gone in seconds.

Joseph Baladi, chief executive officer of BrandAsian agreed with Foley on the negative effect the recall will likely bring on Samsung's consumer confidence.

"All the mobile phone brands share several common points-of-parity: convenience, reliability and safety. Of the three, it is the latter that has been most severely compromised. People who are concerned about their own safety and particularly those of loved ones (like parents with regards to their children) will think twice about the brand moving forward," he added.

Moving forward

In Malaysia, Samsung is urging its Galaxy Note7 users to power down their devices and exchange them for new units under its replacement program as soon as possible. Customers who have Galaxy Note7 devices can replace their current device with a new one beginning 29 September 2016 onwards.

In a statement dated 11 September, DJ Koh, president of mobile communications business at Samsung Electronics said:

"Our number one priority is the safety of our customers…We are expediting replacement devices so that they can be provided through the exchange program as conveniently as possible and in compliance with related regulations."

Samsung Malaysia said there have been only a small number of reported incidents, but it is taking great care to provide customers with necessary support. It has also identified the affected inventory and stopped sales and shipments of those devices.

Foley said the important thing that any brand can do when this kind of (recall) event happens, is to be candid and truthful to their customers, “Don’t try to hide, be honest and tell them what you’re doing to fix the problem.”

Baladi added that Samsung will need to directly address the problem in its advertising and "explain why the explosion took place and how they have solved the problem or are in the process of solving the problem."

He added the brand will also need to apologise for the risk the phones created to the safety of customers.

Baladi said if in cases where exact cause of the issue remains unknown, Samsung should also "need to strongly advise customers to cease using the smartphone" and it must move quickly with a credible and transparent explanation.

The Galaxy Note7 was launched on 19 Aug in ten countries and opened for pre-orders in Singapore just last week. However, at least seven airlines, including Singapore Airlines, have banned passengers from switching on or charging Note7 phones on flights.