For dealerships, finding new avenues to increase business remains a must. However, bringing in new business can be challenging. For dealerships looking to find the next angle on acquiring loyal customers, the business of recall is worth consideration.
Today, recalls are some of the most relevant service offers you can make because people aren’t driving as much as they have in the past due to of COVID. This makes it unreliable to predict their next service due date (based on mileage algorithms). This means service reminders and specials do not have the same impact they normally do.
However, car owners still need to complete their recall regardless of how often they drive.
Recalls represent an important part of the automotive world. In many cases, manufacturers issue recalls due to a safety concern, making it critical that vehicle owners are aware of these recalls and act on them. Not only that, but according to Stout’s 2020 Automotive Defect & Recall Report, “2019 saw an increase in light vehicle recalls. In addition to more recall campaigns in 2019, the number of larger recalls in terms of the number of vehicles affected also increased in 2019.” This steady increase in recall issues provides a unique opportunity for dealerships.
As a dealership, assisting clients with tackling recalls should be a vital part of your business. In this piece, we will explore the importance of recall business and the top reasons your dealership needs a marketing strategy around recalls and defects. Additionally, we will provide actionable insights on how to best implement a recall marketing strategy that will provide ongoing benefits to your business’ bottom line.
In many cases, recalls involve critical components of a driver’s vehicle, making consumers extremely motivated to find a fix. For example, according to Stout’s 2020 Automotive Defect & Recall Report, in 2019, service brakes saw the largest increase in recalls from under 2 million vehicles affected in most prior years since 2000 to 4.7 million in 2019.
Increasingly, recalls also include components the average person remains ill-equipped to repair themselves. For example, the same study showed a trend in rising software defects. For the second year in a row, according to the report, the single largest recall of the year involved a software-based defect.
Layered on top of the complexity of recent recalls is an aging fleet of vehicles on the road. According to Stout, vehicles now remain on the road longer than ever before. In 2019, the oldest average of the U.S. light vehicle fleet reached an all-time high at 11.8 years. This leads to an increase in the chance of detecting latent defects in materials, design, and manufacturing.
With large recalls sweeping our nation, there exists a practical need for consumers to find someone who can handle defect repairs. Additionally, consumers look for a convenient, fast fix. They do not want to face the hassle of repairs and often feel uncertain about how the recall process works.
This results in the perfect opportunity for dealerships to do two important things:
- Provide a much-needed service, ensuring driver safety
- Establish a trusted relationship with customers
Looking at the recent trends, dealers must tap into this market immediately. With recall reporting on the rise and an increase in media’s attention around recalls, there is no better time than right now for dealers to build a business around recalls.
Automotive News recently covered a story about a dealership in Kingston, Massachusetts, that created an in-house recall department. This department, focused solely on consumers with open recalls, provided real value to the store within the first four months of operation. In those months, the dealership saw a $77,000 uplift in service revenues in addition to more than $300,000 worth of factory warranty work to fix the recalls.
Even more impressive, the dealership goes on to say that in those first four months, eighty-one clients decided to purchase a new vehicle after spending time in the showroom.
You can easily see that the recall business has a two-prong benefit. First, dealerships can tap into the money made off the actual recall repairs. Second, if handled properly, a dealership can drive new vehicle sales by exposing consumers to their showroom.
In the above example, the dealership built out a dedicated team for handling recall business. In doing so, they converted recall customers into long-term clients. However, before a recall business can become anything else, it has to arrive at your door. For this reason, it all begins with a targeted recall business marketing strategy.
Building a Recall Business Marketing Strategy
For dealerships who recognize the importance of recall business, the question then becomes, how do you drive those consumers with open defects into your dealership?
A quality recall business marketing strategy should include all of the following critical steps.
Recall business uniquely represents a reactive service. Unlike rotating tires and changing timing belts that happen at predetermined intervals, a potential recall client only exists in response to a manufacturer or the National Highway Traffic Safety Administration’s issued statement.
For this reason, a marketing strategy around recall business has to be activated at the right time. These campaigns need to be carefully planned to run in tandem with recalls. Fortunately, recall information remains public knowledge. Dealerships can constantly stay abreast of any active recalls.
In addition to active recalls, dealerships can benefit from targeting consumers who may have missed out on previous recalls. An alarming number of people drive around in vehicles that were part of a recall without realizing it. According to the Consumer Federation of America, over seventy million vehicles on the road today operate with open recalls. This represents a prime audience if dealerships can reach them with the right information.
Digital marketing can be a key to tapping into the recall market. Traditionally, recall information gets to a consumer via mail. Herein lies a few key issues. First, is the address on file correct? In many cases, these letters never reach their intended audience. Second, even if the letter makes it to the right home, some do not get opened. Finally, do consumers know what to do if they receive recall information? A recall can sound intimidating and consumers might not understand that the cost for repairs falls on the shoulders of the vehicle manufacturer.
Fortunately, by activating a digital marketing campaign at the right time for a targeted audience, dealerships have the opportunity to alleviate all of the above pain points. A well-built ad campaign can surface recall information to relevant consumers in a format they will respond to with a straightforward action they can take. Visit your dealership. Call your service team.
Additionally, campaigns can be built to target those who might have missed out on recalls from years past. Use the opportunity to build your dealership’s brand as a trusted source of important recall information.
In this webinar below we show you how to target specific recalls with Facebook and Instagram advertising to entice customers (both previous and conquest) to act immediately.
Winning recall business is not enough. For a recall business marketing strategy to have a long-term benefit, it must be paired with premium customer service. Staff members need to be trained on how to handle recall conversations. The service department needs to know how to drive further sales while they have the attention of a new client.
Before activating a recall marketing strategy, be sure to invest in training your staff on how to handle these new conversations. Build out a script for those who handle phone interactions and online chats. A recall business aims to put clients at ease. No one wants to find out his or her vehicle has a defect, of no personal fault. A conversation around a recall business has to be handled carefully to ensure a positive interaction and outcome.
Additionally, once customers walk through the doors, your team needs to know how to convert those clients into loyal customers. The goal should not be to simply fix their vehicle’s defect and send them on their way. Rather, the goal should be to earn more of their business, whether in additional maintenance services or the purchase of an upgraded model.
Finally, once you have earned a client’s recall business, you need to add them to existing marketing campaigns. With more detailed data now available to you, you can continue to target these new clients with ongoing marketing campaigns. For example, if you helped a client fix a recalled airbag on their 2018 model, you now have important data on the vehicle’s trade-in value and what the buying preferences look like. Using these data points, you can continue to market sales, trade-in opportunities, and specific maintenance specials to this client.
At J&L Marketing, we are experts in recall marketing that drives a ton of service traffic and revenue. We also passionately employ unique strategies that revolve around the optimal use of data for dealerships. We aim to constantly think of new angles that can help dealerships drive meaningful business through their doors.
We offer unique services such as virtual sales events, VIN-specific advertising, online ads targeting previous customers, and more data-driven strategies.
Recall business can drive meaningful revenue if the right campaign gets put into place. Rather than simply throwing an ad in front of your clients, we will work with you to target your ideal audience with actionable content. We invite you to reach out to us today about how we can assist your team in building out a full-faceted marketing campaign around recall business.