Vehicle recalls can be difficult for dealerships to navigate, but effectively handling them has become table stakes for the business.
Upwards of 30 million vehicles in the U.S. were affected by recalls in 2018, NHTSA figures show. Some fixed operations directors now consider recall work the fourth segment of their business, joining regular warranty, customer-paid and used-car reconditioning.
With the right approach, dealerships can make the most out of recalls and turn them into positive customer interactions. Recalls give dealership staff the chance to reconnect with customers who have not visited the dealership since purchasing their vehicle.
Recalls also are often met with a heightened sense of urgency by customers since they see them as public issues that raise questions about vehicle safety. Dealerships can turn these potentially tense events into a great experience, building trust and long-term connections with customers.
Challenges of Recalls
It is obvious when a recall does not go well. The vehicle owner struggles to receive information from a dealership and calls multiple times to make an appointment.
On the other end, the dealership can be slammed with phone calls and recall requests it struggles to address because of parts unavailability and information gaps. Recall work can diminish a dealer’s capacity to care for existing customers’ repair needs, reducing business profitability. Ultimately, customers and dealerships alike leave the “transaction” with a bad experience.
The information flow of recalls is not linear. Consumers typically hear about recalls from the media and then contact dealerships to make appointments. However, dealerships often have not been contacted by OEMs to confirm proper procedures and connect with parts suppliers, often causing frustration for all parties.
Ensur Employees Make Good Impressions
Dealerships need to arm their staff to deal with customer inquiries even when they do not yet have all the specific recall detailsl. Once they have the information, they need to quickly prepare their technical and customer service staff with the proper processes.
Sustaining customer-centric practices is difficult as employees work in the demanding and chaotic environment of a service department. However, to succeed dealers must meet customer expectations on a recall service visit as they do for every other service appointment.
That means easy scheduling, quick check-in, complete vehicle inspections and professional delivery. All are vital for customer retention.
Think about each repair as an audition for future business, rather than as a single transaction.
Each vehicle should be inspected in a way that educates customers through pictures, videos and/or understandable descriptions about the total health of their car. Providing this information makes them more likely to give dealers the opportunity to address their repair needs.
Technology Plays Integral Role
The insights delivered by a well-designed service information tool can help in each customer interaction, even during the craziness of a large recall.
Instead of waiting for a customer’s call, dealerships can proactively communicate by utilizing reports on VINs in their area to identify affected vehicles. Once identified, dealerships can use technology that automatically sends messages via a customer’s preferred contact method.
These messages should include a link to the dealership’s online service scheduling tool, removing bottlenecks created by a flood of calls.
Technology is improving. For example, a new solution at Honda has integrated an online scheduling tool with the OEMs parts distribution centers to help dealerships with supply challenges in real-time.
When a customer or employee schedules a recall appointment, the system directs the customer to a time slot based on parts availability, immediately ordering the specific part if it is not in the dealership. Comprehensive solutions like this are needed more broadly in the industry so technology can truly enable dealerships to serve customers well through a recall experience.
Creativity Is Key
Creative solutions can make recall service visits as enjoyable as possible. For example, one dealership implemented “recall Saturdays/Sundays” where it dedicated fixed-operations work to recalls.
Dealership employees plan ahead for recall work by arranging loaner vehicles as needed ahead of time. Technicians are scheduled in advance for the shifts and so recall work doesn’t disrupt their typical earnings during the week. The dealership orders pizzas, plays music and turns a service visit into a fun experience for everyone.
Think Bigger Picture
Recall work alone won’t drive significant revenue, but dealerships can maximize the opportunity by acknowledging how recalls fit into the bigger picture of life-long customers.
Dealerships can use these visits to show customers a service appointment can be a quick and enjoyable experience. (Wards Industry Voices contributor David Foutz, left)
Almost three-quarters of customers who visited a dealership for service in the past year are likely to return to purchase their next vehicle, according to the Cox Automotive 2018 Service Industry Study.
While some people may view recalls as a hassle, dealerships using the right approach can turn these events into another customer touchpoint that leads to more service and sales revenue down the road.
David Foutz is vice president of sales for Xtime.