September 19, 2018
Today one of five vehicles on the road are under recall. This year alone there have been 46 million vehicle owners notified of a recall; seven million of which are not related to the Takata airbag issue.
Recalls represent a significant revenue opportunity for dealership service departments. Whenever a customer comes in for a recall repair, there’s an opportunity to identify additional needed repair work. Our data shows that an average recall RO is $695, more than double the average RO amount of $335. Clearly that’s incentive to bring in recall customers.
Yet, the current completion rate for recalls is 75 percent. Manufacturers are not happy about it and dealers shouldn’t be either. As an industry we can do much better.
The primary reason consumers don’t bring their vehicles in for recall work is because they don’t know that a recall has been issued. This is proof enough that the current method for notifications is highly inadequate. Manufacturers are required to send first-class mail to vehicle owners within 60 days of notifying the NHTSA.
But addresses change frequently so many vehicle owners never receive their notifications. If they do, the mailer is set aside as non-urgent and soon forgotten.
Dealers can and should take a more proactive stance in marketing recalls to their own customer base. Our data shows that when recall messages are delivered across all channels; e.g. mail, email, social media, phone and display ads, there’s a 5X better response rate.
Recall Marketing Best Practices
Dealers can find out about recalls as soon as the NHTSA is notified, which allows them to alert their customers ahead of the manufacturer notices. Here’s what we recommend:
Send the first email to your customers before they receive the manufacturer notice. Alert them to a recall, include a “save the date” message and encourage them to look for the recall notice in the mail.
Send a mailer. The manufacturer’s mailer won’t mention your dealership by name. Send your own mailer that does.
Send a second email. Wait a couple weeks until after your mailer goes out, then send a follow up email. Ratchet up the urgency and safety precautions.
Phone Calls. Recall notifications by phone are not regulated by the FTC in the same way as other types of phone solicitations. As long as there is no offer and you’re simply trying to get the customer to schedule an appointment for their recall, these calls are allowed.
Social Media. Drop recall notice reminders into the news feeds of your customers on Facebook and Instagram. When they log in, they will see a notice with your dealership name and phone number on it, or they can click directly on the post and be taken to your online scheduler. This is a very cost-effective method of delivery because only the vehicle owners with recalls are notified.
Display Ads. Create visual display ads with a recall notice reminder that will follow recall customers around the Internet. Again, very cost effective because you’re only advertising to a small percentage of your customer database with a specific need.
The Right Offer
Another reason why customers don’t bring in their vehicles for recall repairs is because the issue is non-urgent. The inconvenience factor for most people is huge. Bundling a recall repair with another offer is an effective way of overcoming this obstacle. According to our data:
Not all manufacturers allow offers in your recall notices, however, so check guidelines.
It also helps to set customer expectations in your messaging. Let them know how long it will take to complete the service. If you have a pick-up/drop-off service for their vehicles so they can stay at home or work, let them know. Promote your waiting room amenities such as free WiFi and refreshments.
If you decide to conduct a recall marketing event, keep in mind that the average response time is 45 to 90 days. Don’t measure the campaign’s effectiveness in one month; wait 90 days to calculate your ROI. Dealers that follow these recall marketing recommendations can expect to see a $17 ROI for every dollar spent.