In an unprecedented move, AutoNation CEO Mike Jackson recently announced that AutoNation will no longer sell any vehicle with an open recall – new or used. According to Automotive News, this effectively grounds up to 10 percent of AutoNation’s inventory.

AutoNation’s initiative could actually increase its brand image and make the chain more appealing to car shoppers. Knowing that any vehicle they choose to buy will not have any pre-existing issues that need to be repaired will certainly be viewed as a bonus. However, the man-power, time and loss of potential revenue required to implement it nationally could well be cumbersome to many dealers - especially smaller ones who have limited inventory. But, Jackson claims in the article that they are nearing completion of an automated system that will allow dealerships to identify and block the sale of any vehicle with an open recall. He has vowed to make this system available free of charge to any dealership that wants it.

While they can afford to replace this grounded inventory by acquiring up to 10,000 more pieces of inventory for their dealerships, many dealers won’t be able to financially follow suit. Accumulated flooring costs alone from aging inventory would be a hefty bill. In addition, it will become extremely important for dealerships to search for their retail-able pre-owned inventory within their own stores -- auction prices for used vehicles are certain to skyrocket with increased demand by dealers seeking to replace these grounded units.

This move provides a very strong unique selling proposition for AutoNation to relay to consumers. Jackson is certainly making a statement and there’s no doubt that this news will reach the public’s ears and make them take notice. In addition, it’s almost certain that supporters of recall legislation will rally behind this move and use it as an example to fortify their positions. It’s hard to believe that any consumers will object and dealers who do could find themselves in a precarious position -- caught between financial reality and public opinion. It will be interesting to watch this initiative develop and see how it affects AutoNation’s bottom line and also customer perception.

Recall campaigns can easily be one of the most lucrative service opportunities. Sadly, however, most dealers only reach about a third of the potential recall customers in their area. This is because they simply comb through their DMS and any information received from the factory for owners in their PMA. Personally, I feel this is a very shortsighted approach that leaves some pretty big holes in their market.

To start with, waiting for a factory-backed and publicized recall is exactly what your competitors do – so how do you get a jump on that competition?  Consider becoming a little more proactive in your marketing efforts. Simply utilizing the data you already have is not enough nowadays.

Imagine your recall work tripling. I am sure you would welcome that fixed ops revenue.

So what potential work are you missing and what can you do to capture it?

1. Secondary Vehicle Owners - Think about all of the used vehicles that your competition has sold. I’m not just talking about the nearest franchised dealer, but also off-brand dealers, independent used car lots, buy here-pay here… basically every place that sells used cars. These are all potential customers. And, if these cars were purchased from anyplace other than a franchised dealer, the customers may not ever get notified that their vehicle has a recall.
    
2. Vehicle Owners Outside your PMA - All is fair in love and car sales, right? You don’t know what recall marketing your competition is doing. Perhaps they aren’t doing any at all. What about customers outside your PMA that don’t use a franchise dealer, but take their service work to an independent facility? All of these consumers are possible customers. By making the effort to obtain this information, you can potentially reach an enormous pool of consumers.
    
3. All Open Recalls for Each Vehicle - Make a commitment to investigate all open recalls for each vehicle.  Frequently consumers come into the service drive and know about a recall of which the service advisor is not yet aware. That should never happen. Why not get a head start by identifying open recalls and pouncing on them before the factory or your competition does? 
    
4. Rank Recalls by Safety Risk and Profitability - Consumers are much more inclined to quickly respond to a recall when a safety issue is involved. These campaigns have a high percentage of success. Take advantage by proactively identifying them and initiating campaigns. In addition, by prioritizing your marketing efforts towards the most profitable recalls, you can maximize the service revenue gained from your marketing efforts.
    
5. Use a Multi-Channel Outreach Approach – Todays consumers have many choices as to how they receive information. Ensure that your marketing includes all potential communication outlets - first class direct mail, email, phone, digital marketing and more. In so doing, you can increase the odds that the consumer receives your message AND that they actually pay attention and take action.

Service work is hyper-competitive. With recalls, rather than competing against every dealership and independent repair facility, you’re only competing with your closest brand franchises. Target consumers in your area that aren’t being aggressively marketed to. You stand to gain additional service work through recalls AND future service business.

Recall campaigns can easily be one of the most lucrative service opportunities. Sadly, however, most dealers only reach about a third of the potential recall customers in their area. This is because they simply comb through their DMS and any information received from the factory for owners in their PMA. Personally, I feel this is a very shortsighted approach that leaves some pretty big holes in their market.

To start with, waiting for a factory-backed and publicized recall is exactly what your competitors do – so how do you get a jump on that competition?  Consider becoming a little more proactive in your marketing efforts. Simply utilizing the data you already have is not enough nowadays.

Imagine your recall work tripling. I am sure you would welcome that fixed ops revenue.

So what potential work are you missing and what can you do to capture it?

1. Secondary Vehicle Owners - Think about all of the used vehicles that your competition has sold. I’m not just talking about the nearest franchised dealer, but also off-brand dealers, independent used car lots, buy here-pay here… basically every place that sells used cars. These are all potential customers. And, if these cars were purchased from anyplace other than a franchised dealer, the customers may not ever get notified that their vehicle has a recall.
    
2. Vehicle Owners Outside your PMA - All is fair in love and car sales, right? You don’t know what recall marketing your competition is doing. Perhaps they aren’t doing any at all. What about customers outside your PMA that don’t use a franchise dealer, but take their service work to an independent facility? All of these consumers are possible customers. By making the effort to obtain this information, you can potentially reach an enormous pool of consumers.
    
3. All Open Recalls for Each Vehicle - Make a commitment to investigate all open recalls for each vehicle.  Frequently consumers come into the service drive and know about a recall of which the service advisor is not yet aware. That should never happen. Why not get a head start by identifying open recalls and pouncing on them before the factory or your competition does? 
    
4. Rank Recalls by Safety Risk and Profitability - Consumers are much more inclined to quickly respond to a recall when a safety issue is involved. These campaigns have a high percentage of success. Take advantage by proactively identifying them and initiating campaigns. In addition, by prioritizing your marketing efforts towards the most profitable recalls, you can maximize the service revenue gained from your marketing efforts.
    
5. Use a Multi-Channel Outreach Approach – Todays consumers have many choices as to how they receive information. Ensure that your marketing includes all potential communication outlets - first class direct mail, email, phone, digital marketing and more. In so doing, you can increase the odds that the consumer receives your message AND that they actually pay attention and take action.

Service work is hyper-competitive. With recalls, rather than competing against every dealership and independent repair facility, you’re only competing with your closest brand franchises. Target consumers in your area that aren’t being aggressively marketed to. You stand to gain additional service work through recalls AND future service business.

As reported by Automotive News, Volvo is rolling out a lifetime warranty on parts and labor for all vehicles serviced after the factory warranty at any Volvo dealership.  Volvo claims that “the lifetime parts and labor warranty is a commitment to both quality vehicles and quality customer relationships” and that “everyone should feel confident that Volvo is here to support our customers throughout the ownership of the vehicle.” This offering includes extra benefits, such as software updates, diagnostics, personal service, alternate transportation and a car wash for free. Volvo has extended this offer to all Volvo vehicles, regardless of age. It will be valid at any Volvo dealership in North America.

With the recent unprecedented number of OEM vehicle recalls, which has caused wide-spread consumer concern about vehicle quality, this move is certain to be welcomed by Volvo owners. The fact that Volvo has required the repair be completed at a Volvo dealership should also be great news for Volvo service departments. This offer applies to vehicles of any age. So, Volvo service departments are likely to see a higher volume of older model Volvos as consumers that previously defected to independents, now return to a Volvo franchise for the peace of mind a lifetime warranty brings.

Volvo dealerships now have a very strong value proposition to offer customers and would be wise to immediately incorporate this into their marketing efforts, just as Volvo undoubtedly will.

Customer loyalty is a quirky beast. When a customer returns outside of warranty, sometimes dealers are forced into an adversarial position, and place blame on the customer. With this new lifetime warranty offer, Volvo dealers should be able to reduce such situations. Or, at the very least, solve them without having to eat repair costs at the risk of poor CSI scores, unfavorable reviews, or backlash on social media by an unhappy customer.

Volvo’s new plan should help build a perception of quality and make servicing a vehicle at a Volvo franchise more attractive to consumers. As a result, Volvo dealers will enjoy less defection after warranties expire. They should also acquire more customers with older vehicles in their service drives – which equates to more sales opportunities, if handled well. Looks like Volvo managed to roll-out a program that will prove to be a win-win-win for the OEM, the franchised dealers and, most importantly, the consumer.

As reported by Automotive News, Volvo is rolling out a lifetime warranty on parts and labor for all vehicles serviced after the factory warranty at any Volvo dealership.  Volvo claims that “the lifetime parts and labor warranty is a commitment to both quality vehicles and quality customer relationships” and that “everyone should feel confident that Volvo is here to support our customers throughout the ownership of the vehicle.” This offering includes extra benefits, such as software updates, diagnostics, personal service, alternate transportation and a car wash for free. Volvo has extended this offer to all Volvo vehicles, regardless of age. It will be valid at any Volvo dealership in North America.

With the recent unprecedented number of OEM vehicle recalls, which has caused wide-spread consumer concern about vehicle quality, this move is certain to be welcomed by Volvo owners. The fact that Volvo has required the repair be completed at a Volvo dealership should also be great news for Volvo service departments. This offer applies to vehicles of any age. So, Volvo service departments are likely to see a higher volume of older model Volvos as consumers that previously defected to independents, now return to a Volvo franchise for the peace of mind a lifetime warranty brings.

Volvo dealerships now have a very strong value proposition to offer customers and would be wise to immediately incorporate this into their marketing efforts, just as Volvo undoubtedly will.

Customer loyalty is a quirky beast. When a customer returns outside of warranty, sometimes dealers are forced into an adversarial position, and place blame on the customer. With this new lifetime warranty offer, Volvo dealers should be able to reduce such situations. Or, at the very least, solve them without having to eat repair costs at the risk of poor CSI scores, unfavorable reviews, or backlash on social media by an unhappy customer.

Volvo’s new plan should help build a perception of quality and make servicing a vehicle at a Volvo franchise more attractive to consumers. As a result, Volvo dealers will enjoy less defection after warranties expire. They should also acquire more customers with older vehicles in their service drives – which equates to more sales opportunities, if handled well. Looks like Volvo managed to roll-out a program that will prove to be a win-win-win for the OEM, the franchised dealers and, most importantly, the consumer.

The National Highway Traffic Safety Administration has been battling with lawmakers in an effort to gain additional funding in order to handle – amongst other things – the 33.8 million Takata airbags recalled. In the most recent hearing, the NHTSA Administrator, along with several senators provided examples of how extremely underfunded the agency is. Here are few of those statistics:

• The Federal Aviation Administration has 30 times the budget of the National Highway Traffic Safety Administration and 6,000 employees, compared to 90 at NHTSA. – Sen. Richard Blumenthal, D-Conn
• The U.S. Railways had just 10 deaths last year, but 700 government employees oversee them. In contrast, there were 32,719 lives lost on U.S. roads last year. – NHTSA Administrator Mark Rosenthal
• The NHTSA gets over 80,000 consumer complaints per year, but has just one person reviewing them for half a day… if the person spends four hours per day looking at complaints, that’s over 80 complaints per hour, less than a minute each.

In the hearing, senators warned that consumers are growing tired of recalls and are apathetic about getting their Takata air bag inflators replaced. It was stated that, despite a dedicated website with information about the recalls, most consumers aren’t aware of it. The NHTSA went on to say that it does not have the budget to properly track down and notify all the vehicle owners that need Takata air bags replacing -- a little under 34 million vehicles.

Besides the Takata recall, there are also several other recalls that automakers are working hard to identify and notify their customers about. 2014 was a record year for recalls -- more than 60 million vehicles were recalled in the United States, double the previous annual record in 2004. In all, there were about 700 recall announcements — an average of two a day — affecting the equivalent of one in five vehicles on the road.

Recall fatigue is certainly understandable and a very realistic phenomenon. Not many days have gone by in the past year without a recall from one automaker or another. Consumers are now not only confused, but are also very likely starting to feel apathetic towards the news. There is also the opposite end of the spectrum -- consumers that are aware of recalls on their vehicle but that don’t believe that the parts are available to fix it – whether that impression was given to them by the many news reports indicating as much, or because of a real problem at a dealership due to a sudden run on parts.

Targeting your market by sending out your own notices to vehicle owners, stating that your dealership is prepared and has the capacity to repair their recall, could be a very smart marketing move right now. It could very easily result in a windfall of additional recall work. And let’s not forget the many opportunities that exist in both sales and service simply because a consumer is at your dealership. Take advantage of this moment and focus your service marketing efforts towards capturing this service work while you can.

The National Highway Traffic Safety Administration has been battling with lawmakers in an effort to gain additional funding in order to handle – amongst other things – the 33.8 million Takata airbags recalled. In the most recent hearing, the NHTSA Administrator, along with several senators provided examples of how extremely underfunded the agency is. Here are few of those statistics:

• The Federal Aviation Administration has 30 times the budget of the National Highway Traffic Safety Administration and 6,000 employees, compared to 90 at NHTSA. – Sen. Richard Blumenthal, D-Conn
• The U.S. Railways had just 10 deaths last year, but 700 government employees oversee them. In contrast, there were 32,719 lives lost on U.S. roads last year. – NHTSA Administrator Mark Rosenthal
• The NHTSA gets over 80,000 consumer complaints per year, but has just one person reviewing them for half a day… if the person spends four hours per day looking at complaints, that’s over 80 complaints per hour, less than a minute each.

In the hearing, senators warned that consumers are growing tired of recalls and are apathetic about getting their Takata air bag inflators replaced. It was stated that, despite a dedicated website with information about the recalls, most consumers aren’t aware of it. The NHTSA went on to say that it does not have the budget to properly track down and notify all the vehicle owners that need Takata air bags replacing -- a little under 34 million vehicles.

Besides the Takata recall, there are also several other recalls that automakers are working hard to identify and notify their customers about. 2014 was a record year for recalls -- more than 60 million vehicles were recalled in the United States, double the previous annual record in 2004. In all, there were about 700 recall announcements — an average of two a day — affecting the equivalent of one in five vehicles on the road.

Recall fatigue is certainly understandable and a very realistic phenomenon. Not many days have gone by in the past year without a recall from one automaker or another. Consumers are now not only confused, but are also very likely starting to feel apathetic towards the news. There is also the opposite end of the spectrum -- consumers that are aware of recalls on their vehicle but that don’t believe that the parts are available to fix it – whether that impression was given to them by the many news reports indicating as much, or because of a real problem at a dealership due to a sudden run on parts.

Targeting your market by sending out your own notices to vehicle owners, stating that your dealership is prepared and has the capacity to repair their recall, could be a very smart marketing move right now. It could very easily result in a windfall of additional recall work. And let’s not forget the many opportunities that exist in both sales and service simply because a consumer is at your dealership. Take advantage of this moment and focus your service marketing efforts towards capturing this service work while you can.

You made the commitment to capture more recall work. You’ve done your due diligence by notifying your customers. You’ve obtained lists of in-market customers subject to recalls that haven’t been to your dealership before, and reached out to them. You’ve spent the time and energy to really saturate your market using every form of communication to maximize your reach. Now the phones are ringing. Appointments are being made. Parts are being ordered. Customers start showing up to get their recall repair completed. This windfall of additional service business is going to increase your revenue.

What happens, however, when the recall work is completed?

You have one of two choices: You can be happy that you got that additional work and send the customer home knowing their vehicle is repaired. Or, you can integrate a strategy into your recall process in an attempt to gain the recall repair work AND retain these customers for future work.

Customers that arrive for recall repairs can naturally be nervous about their vehicle and, by extension, the brand and your dealership. They may be skeptical that their vehicle will be repaired correctly. Let’s not forget the unfortunate case of the Takata airbag recall, where some consumers had their recall repair done with parts made by TRW. Later it was discovered that the replacement parts were also defective, so customers were forced to return to the dealership to get the same repair done again. This second recall affected more than two million vehicles.

Establishing trust with the customer is essential in order to keep their service business in the future. To do that, it helps to have a thorough and comprehensive plan of action for all customers that come into the dealership for repair work. Simply checking in their car and trying to upsell these customers won’t score you any points. Prove to the customer that they genuinely care about the health and safety of their vehicle – and the customer – by conducting a complete inspection of the vehicle each time they come in for service. And be sure to go over the results of that inspection with the customer.

Use these vehicle inspections to establish a baseline with the customer right from their first appointment. Ensure that they understand that your goal is to make their vehicle as safe as possible. A green, orange, red approach helps them track what needs immediate handling and what can wait a few weeks. The key is keep it consistent so that a natural progression is seen in their vehicle service each visit.

For any customer coming in for a recall fix, please, please, research their vehicle and identify other possible recalls that may exist. Too many times I hear of customers that bring a vehicle in for recall work, get the recall fixed, only to discover after the repair is completed that there was another recall that could have been fixed at the same time. The customer has already been inconvenienced and this just compounds the issue. The more thorough you can be, the more the customer will understand that you are simply trying to ensure that their vehicle is safe and properly maintained.

Equally important is to ensure that the customer has an excellent experience at your dealership. Just as the old saying goes, you only have one chance to make a first impression. Many of these recall customers could be new to your dealership. And, due to some pretty severe media reports, some are likely to be pretty concerned about their safety. By bending over backwards to ensure that they have an excellent service experience, you have the opportunity to begin a relationship with the customer and increase the chance that they will return.

Show your customer that you care about their vehicles safety. Provide an excellent service experience and these customers should recognize the value that you offer and show their appreciation by returning. Don’t simply settle for the recall repair. Think long term and you could end up with a customer that contributes to your bottom line for years to come.

You made the commitment to capture more recall work. You’ve done your due diligence by notifying your customers. You’ve obtained lists of in-market customers subject to recalls that haven’t been to your dealership before, and reached out to them. You’ve spent the time and energy to really saturate your market using every form of communication to maximize your reach. Now the phones are ringing. Appointments are being made. Parts are being ordered. Customers start showing up to get their recall repair completed. This windfall of additional service business is going to increase your revenue.

What happens, however, when the recall work is completed?

You have one of two choices: You can be happy that you got that additional work and send the customer home knowing their vehicle is repaired. Or, you can integrate a strategy into your recall process in an attempt to gain the recall repair work AND retain these customers for future work.

Customers that arrive for recall repairs can naturally be nervous about their vehicle and, by extension, the brand and your dealership. They may be skeptical that their vehicle will be repaired correctly. Let’s not forget the unfortunate case of the Takata airbag recall, where some consumers had their recall repair done with parts made by TRW. Later it was discovered that the replacement parts were also defective, so customers were forced to return to the dealership to get the same repair done again. This second recall affected more than two million vehicles.

Establishing trust with the customer is essential in order to keep their service business in the future. To do that, it helps to have a thorough and comprehensive plan of action for all customers that come into the dealership for repair work. Simply checking in their car and trying to upsell these customers won’t score you any points. Prove to the customer that they genuinely care about the health and safety of their vehicle – and the customer – by conducting a complete inspection of the vehicle each time they come in for service. And be sure to go over the results of that inspection with the customer.

Use these vehicle inspections to establish a baseline with the customer right from their first appointment. Ensure that they understand that your goal is to make their vehicle as safe as possible. A green, orange, red approach helps them track what needs immediate handling and what can wait a few weeks. The key is keep it consistent so that a natural progression is seen in their vehicle service each visit.

For any customer coming in for a recall fix, please, please, research their vehicle and identify other possible recalls that may exist. Too many times I hear of customers that bring a vehicle in for recall work, get the recall fixed, only to discover after the repair is completed that there was another recall that could have been fixed at the same time. The customer has already been inconvenienced and this just compounds the issue. The more thorough you can be, the more the customer will understand that you are simply trying to ensure that their vehicle is safe and properly maintained.

Equally important is to ensure that the customer has an excellent experience at your dealership. Just as the old saying goes, you only have one chance to make a first impression. Many of these recall customers could be new to your dealership. And, due to some pretty severe media reports, some are likely to be pretty concerned about their safety. By bending over backwards to ensure that they have an excellent service experience, you have the opportunity to begin a relationship with the customer and increase the chance that they will return.

Show your customer that you care about their vehicles safety. Provide an excellent service experience and these customers should recognize the value that you offer and show their appreciation by returning. Don’t simply settle for the recall repair. Think long term and you could end up with a customer that contributes to your bottom line for years to come.

Following tremendous pressure from the NHTSA, Takata has expanded the recall on its faulty airbags. In fact, it just doubled the number of vehicles that are subject to recall to 34 million – that’s one in seven vehicles on the road today – and the largest recall in automotive history. Since then, consumers have been flooding the NHTSA website, searching to see whether their vehicles are affected. In fact, according to an article in Automotive News, daily website traffic increased by 62 times -- to an incredible 598,000 searches, up from 9,662 per day. Consumers want answers and, once they get them, they’ll be looking to dealers to help them.

Be prepared for a large surge in recall-related questions and ensure that you have answers for your customers. Due to the incredible volume and the reported shortage of parts, there is not much dealers can do to expedite parts orders to handle these issues. But, most consumers will want their vehicles fixed as soon as possible, perhaps fearing for the safety of themselves and their loved ones.

That being said, apparently it is going to take years to handle all the vehicles involved in this recall. I am sure there will be many customers unwilling to drive a vehicle that has a faulty airbag for months, let alone years. They will therefore search for an alternative – namely, a new vehicle.

When recalls happen, it is certainly wise for dealers to reach out to every customer in their market to inform, educate and try to earn the recall work. However, when repairs are in short supply and a dealership knows it won’t be able to accommodate customers, that dealership may want to consider offering solutions that are designed to replace the customer’s existing vehicle with a new one.

Conquest marketing is certainly not a new thing. Many dealers, however, don’t consider open recalls as an opportunity to generate vehicle sales, only one in which to acquire additional service business. These two things don’t have to be mutually exclusive. A properly designed and executed recall marketing strategy can be an effective sales tool. Targeting vehicle owners affected by recalls that are known to have a parts shortage can be an effective marketing campaign. This is the perfect opportunity for an aggressive dealer to present options to these customers on how they can trade-in their existing vehicles.

The bottom line is that if a consumer is unwilling to wait for their vehicle to be repaired, they will most likely have started searching for a new vehicle. By marketing to these consumers, chances are that your dealership will be the first to reach out and contact them on this matter. This could give you a head start on your competition.