Service Recalls: OEMs Have a Problem, But You have a Solution

Pretend that I am saying this in a Jerry Seinfeld voice: “What is the deal about free service safety recalls? Do people hate free service or do they hate safety?” Ok, so now you know why we never made it as standup comedians, but let us take a few minutes to talk about how your dealership can harness service recalls to increase your revenue stream. During the summer of 2017, there were more than 63 million vehicles in the US with open service recalls. The number increased by 10 million in 2018. So who is to blame for this staggering missed opportunity? Are the customers too busy to take their vehicle to a service center or are dealerships content with forgoing this potential source of revenue? Both parties, as such is usually the case, are at fault when we decompose the service recall problem. This dual liability reminds us all of George Costanza’s immortal break-up line: “It’s not you, it’s me.”

The University of Michigan recently conducted a study to understand why consumers ignore service recalls. Their research concluded that 38% ignore service recalls because they want to avoid a dealership pressuring them to pay for additional, and unwanted, services. Another 37% cannot afford to lose their vehicle for a day while the remaining 36% believed the repair would take too long. A very brief analysis of these issues arrives at a simple conclusion: a dealership can mitigate these concerns with the right messaging campaign.

How does one avoid letting this revenue softball sail past the plate? Well, the first step is to realize that the OEM has a problem and it needs, you the dealership, to help them solve it. Unfortunately, this problem has inadvertently become that of your customers; but that does not mean that you begin the conversation from a point of disadvantage. First, you need to communicate that your team is focused on solving the customer’s problem, but do not get greedy. In other words, it is a good idea to message that you are ready to help them solve their recall issue; it is a bad idea to lure them with a promise of a rapid response, and then hit them with full court press to buy snow tires. Next, you should embrace multi-channel messaging. People will ignore an email and text message, but they rarely ignore multiple messages telling them they need to resolve a safety issue. Finally, you need to train your staff on how to handle customers with service recall issues. These customers are often not interested in anything but resolving their recall as fast as possible. Your staff must understand that they are the face representing the solution to an inconvenience. To do otherwise will associate your dealership and your team with the original problem. Like George said, “The jerk store called, and they are running out of you.”

Let us say the customer has arrived in your dealership and is ready to address a service recall on Saturday morning. There are many other things that they could be doing, but here they are, ready to resolve a faulty airbag sensor. Congratulations, you now own the problem and the one thing standing between you and a scathing Yelp review is rapid and effective service focused on solving a service recall issue. Let us start out with a pro tip: ensure you have the parts on hand to fix the issue. Rather fundamental, yes, but you would not be the first dealership to force a customer to spend their entire Saturday drinking coffee and watching HGTV in your lounge while your staff drives all over town looking for a part. Next, offer them a ride or loaner vehicle. We are sure that your lounge’s coffee is the finest blend ever to cycle through a Keurig, but assume that your customers want to be doing other things than reading last August’s issue of Field and Stream. If you really want to strive for blue ribbon service, offer a free tank of gas or oil change to compensate them for their time. Consider a service recall an investment that has the potential of building repeat customers who associate your dealership as a place that can solve problems without the usual headache.

We here at Auto Labs can help you and your team capture service recall revenue and parlay that win into customer loyalty. Our AI-enabled customer experience connects with the customer and delivers elite service from initial contact to a work order’s closure. Consider how many of the more than 70 million active service recalls are in your local area and realize their associated potential revenue. Moreover, while a show about nothing served as a humorous sub-plot within the Seinfeld multi-verse, you and your staff must make your recall campaign about something. We strongly recommend that you center your efforts on elite customer service aided with an AI-enabled experience. Contact us today to learn more about how we can help.

Sources:
“Why Few Consumers Bring Vehicles into Dealerships for Recall Work,” Digital Dealer, July 27, 2017

“Over 70 Million Vehicles on the Road with Open Repairs,” Consumer Federation of America, September 18, 2018