Many dealers struggle with getting customers to bring their vehicles in to take care of recall issues. The fact that the average recall completion rate is around 75 percent, tells us that standard recall marketing campaigns aren't as effective as they could be.
Your customers either aren't getting the message, or they set it aside and forget about it, or they just don't feel a sense of urgency to get the repair done.
Yet it's worth the time and effort to actively pursue recall work. Our data shows that the average recall RO is $695, more than double the average RO of $335.
One way to increase recall response rates is to expand marketing channels from email and mail to include social media, call campaigns and display advertising.
It's also helpful to think outside the box and leverage your data to find more recall work. Try these three strategies to generate more recall ROs.
1) Upsell the recall, not additional services
Most of the time when customers bring in their vehicles for a recall, service advisors attempt to upsell them to additional services. The problem here is, many consumers aren't motivated to bring in their vehicle in the first place.
If you can't convince the customer that a recall issue is urgent, use reverse logic to get them in for a needed repair, then upsell the recall.
First, identify VINs with known recalls and investigate likely issues the customer is having based on their vehicle history and miles driven. For example, if you know that a BMW with 50,000 miles needs new brake pads, create an offer for that customer. If other vehicles in this group are due for 30,000-mile maintenance, create a compelling offer for them.
You can afford to make these offers very competitive because you know that once the customer comes in, they'll likely agree to take care of the recall issue while there. Because the value of these recall customers is so high, consider offering pick-up/drop-off service or a free loaner.
The most cost-effective methods for delivering such highly targeted offers to individuals is via customized social media ads and/or call campaigns.
2) Find VINs in sellers' hands
Many vehicles with open recalls are in the hands of other sellers, such as local independent dealers, Carmax, or sitting on an auction lot.
To find these recall VINs, use screen-scraping tools to extract data (such as VINs) from other sellers' websites. Once you've identified the vehicles with open VINs, approach the seller and offer to pick the vehicles up, do the repairs and return them to be sold at the end of the day.
The sellers should be motivated to get the issue taken care of purely from a liability standpoint. In today's litigious world, sellers should be concerned about selling a vehicle with a known issue to a consumer. If the seller doesn't appear to be motivated, sweeten the deal by paying them $50 per vehicle to allow you to do the recall repair.
3) Use recall as a conquest platform
Many dealers calculate the ROI of a recall marketing campaign as dollars returned from that campaign only. This is short-term thinking. Recalls should be pursued aggressively as a productive means to re-engage customers with far greater long-term value than the profit from one campaign.
Your recall campaign might reach a first owner who has stopped servicing with you, or a second owner who's unfamiliar with your brand. Here is a chance to build or re-build that relationship. What is that opportunity worth to you?
When a recall customer schedules an appointment, think about ways to optimize their experience so that you can win their business for the long-term. It could be with an additional, compelling offer or a free loaner car.
Let's face it, many of these vehicles are older and in the hands of second owners, so the price expectations are different. This may require heavier discounting as dealers are competing directly with aftermarket alternatives.
This requires a shift in mindset from "How much money can I make from this recall?" to "How much am I willing to invest in this opportunity to create a loyal customer?"
When the customer comes in, invest in a thorough multi-point inspection (MPI) to document all the vehicles' needs. Follow up with targeted offers for those repairs, and don't forget to promote your brand's value proposition.
The first two strategies should help you find and obtain more recall repair business, while the third strategy will help to re-frame how you measure ROI from your recall marketing campaigns. Recall repairs can be lucrative, but their real value lies in the opportunity to service these customers for years to come.