This post was originally published on Auto Success
Dealing with recalls in the automotive space has never been easy or efficient. The process is fragmented and usually relies too heavily on multiple disparate systems and inconsistent info from car manufacturers, DMS providers and service tools. On top of that, recall management has always been very human-driven — and due to the industry’s high turnover rate, it’s an ongoing struggle to not only get the process right but to get it to work long-term.
Yes, recalls are a pain, but they’re a reality in this industry that’s not going away. As a dealer, it may be worth exploring how you can better manage recalls and actually turn some of these pain points into positive outcomes and opportunities to grow as a business.
Factoring Recalls Into Customer Retention
From both the OEM and the consumer’s perspective, a vehicle recall is never good news. But for a dealership, recalls do have a positive twist: they give you the chance to boost customer retention.
Recall management can be a great way to improve your “reactivation rate” — i.e., your ability to bring customers back to the shop if they haven’t been in years.
Recalls occur when an OEM finds that a vehicle (or one of its parts) poses an unreasonable safety risk. Because of this, communications about recalls are exempt from the Telephone Consumer Protection Act (TCPA), which means dealers can text customers about scheduling an appointment for their recall, even if the customer isn’t on a traditional mailing list. This is a unique and valuable touchpoint dealerships don’t otherwise get.
Once the customer’s been reached, it’s up to the dealer to make the process of scheduling an appointment and getting into the dealership as easy as possible for the customer. If you get the timing right, you can also tee up appointments for other services or overdue maintenance the customer may need. At that point, if you and your team have done your jobs well, you’ve likely earned another repeat customer.
Fixing Missed Recall Opportunities
Though not ideal, it’s understandable if a customer visits your shop solely for a recall fix and declines additional service or maintenance.
But what we should never encounter (though we still often do) is a missed recall opportunity. In this scenario, a customer brings their car into a dealership for service — say, for an oil change — but they decline a recall. To be clear: this means the customer is turning down a free service that will fix an alleged safety risk on their vehicle. That should not be happening.
So why are customers declining recall work?
Simple: The dealership didn’t properly manage expectations with the customer.
Ideally, customers should be informed about a recall on their vehicle as soon as possible, whether or not they have a service appointment scheduled. For customers that do have a service appointment scheduled, that’s all the more reason for the dealer to reach out and let them know about the recall ahead of time. That way, the customer can plan accordingly for the extra time it will take to get the recall fixed.
Customers want to believe that you’re acting in their best interest. If you can demonstrate that in how you manage recalls — that the customer’s safety, time and convenience is a priority — they’re more likely to become loyal to your store and come back in the future.
Leveraging Mobile Service with Recalls
The mobile service movement is growing, and for dealers who are either new to mobile repair or trying to revitalize a few old client relationships (or both), using mobile service for recalls can be a great way to get your skin in the game.
Mobile service, or mobile repair, offers car maintenance at home. Instead of dealing with the hassle of going to the dealership for a maintenance appointment, customers can have their car serviced by a technician right on their driveway. This offers a whole new level of convenience for the customer, and as you might imagine, it’s been a hit with those who’ve tested it out.
Beyond convenience to the customer, mobile effectively “adds” extra space to your dealership, which gives you the chance to service more customers more quickly — whether that’s for general maintenance or recall management.
Mobile is also an amazing opportunity from a recruiting and staffing perspective. Many technicians don’t like being cooped up in the shop all day — they’d rather be on the road, getting a change of scenery and getting to be the masters of their own domain. In today’s technician shortage, if you can find talented technicians who align with your approach to service and want to work for you over other dealers, that value they bring will influence other areas of your operations and inevitably improve that side of your business.
The Takeaway
One of the biggest lessons I’ve learned in business came from U.S. Air Force Colonel John Boyd, who created the concept of the OODA loop (observe, orient, decide, act).
Too many dealers have grown comfortable with the traditional way of doing things in this industry. They’ve been lulled into the belief that they can just “ride out” whatever new trend, setback or opportunities emerges — and that eventually, things will go “back to normal.” But in reality, the “norm” doesn’t exist anymore.
The primary takeaway of the OODA loop? You have to look around at what’s changed in your environment and make decisions quickly to adapt. A slew of new developments and ongoing challenges are facing the auto industry today — AI advancements, changing customer expectations, tech shortages and the rising number of recalls, to name a few.
As the dealer, it’s up to you to observe the changes happening around you, make an informed decision and act quickly. And with the right mindset and approach, any of these new challenges can become an opportunity to come out on top.
