Carma project: Toyota’s nudge for product recall

Traditionally, project recall in automobile, healthcare, food or other industry has been done as a massive public relations exercise supported by the company’s sales, distribution and service partners. The outcomes from the traditional route has not always been very encouraging.

Toyota, the largest car manufacturer started to think about it differently and took inspiration from healthcare industry to manage the recall of its defective airbags. The new approach, which uses
nudge and behavioral economics theory at its heart was called  the, Carma project.

Context
Takata Corporation (1933-2017) was an automotive parts company based in Japan. It filed for bankruptcy in June 2017 after major fatalities caused by their airbags, which could deploy explosively and send flying debris inside the vehicle, injuring or even killing the car occupants. These airbags were used by more than 19 different automakers in U.S.A. and across the world. After several such incidents, National Highway Traffic Safety Administration (NHTSA) ordered an ongoing, nationwide recall of more than 42 million cars, the largest automotive recall in the U.S. history. The cars were recalled to replace frontal airbags.

Lower response of consumers on Airbag replacements

In spite of far-reaching efforts by manufacturers through various means like recall letters, public service announcements, and dealer interventions, consumer response to fixing the defective airbags is lower than hoped and still millions of drivers and passengers remain at risk.

Carma Project by Sonic Health in Partnership with Toyota

Given that friends and family can play a powerful role in influencing how people make decisions about safety, Carma project with Toyota started peer-to-peer reward driven alert system to share critical information about the recall in December 2018. Word of mouth communication with infused incentives was believed to be the most trusted process of actively influencing and engaging the people around and getting them in to action.

Earn rewards for protecting your friends and family

Step-1 A simple sign up as Carma ambassador lets them notify their friends and family about the deadly Takata airbag recall via Facebook, twitter, email or text messages

Step–2 An alerted person sends photo of car’s license plate. Carma verifies if that car needs a recall and an instant appointment can be scheduled from phone to get the airbag fixed for free.

Step–3 Every time someone whom they alert, schedules an appointment to get their vehicle fixed, they earn a reward and also earn additional rewards once the vehicle gets fixed. They can instantly redeem their rewards for gift cards to their favorite retailers on the Carma website.

ResonVate Thought
Nudge and behavioral economics theories used to influence the call to action for product recall

Reference
https://en.wikipedia.org/wiki/Takata_Corporation
https://www.consumerreports.org/car-recalls-defects/takata-airbag-recall-everything-you-need-to-know/
https://www.carmaproject.com/home
https://corporatenews.pressroom.toyota.com/releases/carma+project+toyota+boost+engagement+via+innovative+plan+accelerate+takata+airbag+recalls.htm
Contributors
Dhwani (Innovation Scout)