Are You Getting the Most Out of Every Recall?
- There are over 47 million vehicles with open recalls.
- Don't simply service the recall repair!
Vehicle manufacturers posted another record year – not in production, but in recalls. According to the National Highway Traffic and Safety Administration, manufacturers recalled over 51 million vehicles in 2015. Many of these recalls aimed to fix issues such as air bag inflators, fuel pumps, seat belt warnings, and more. However, according to Carfax, there are still over 47 million vehicles on the road in the U.S. with open recalls. What should dealerships do to make sure they take full advantage of every recall, and turn a single visit into a lifelong profitable relationship?
Perform Comprehensive Inspections, Every Time
Any dealership service center looking for more business should target recall customers to become repeat customers. Fixed Ops Magazine reports 80% of customers do not return for customer pay service after two years, yet the majority of profit comes later in the vehicle lifespan. This is where delivering a complete inspection for every vehicle becomes critical.
Great dealerships use inspections to find additional items to position themselves as trusted advisors on the health of the customer’s car. Those that simply service the recall are missing out on profits, and turning away future business, not to mention leaving themselves open to possible lawsuits and litigation due to improper or insufficient service. For example, a New Jersey dealership neglected to warn a customer his tire was going bald – this resulted in a rollover accident, and a $3 million lawsuit. Inspections not only generate more profit, but ensure your customers’ safety and keep your business out of trouble.
Make Recommendations, and Make Them Often
Yes, the recall business can yield great profits, but if dealerships only address the recall, they are missing greater profits and forgetting about customer retention. The fact is, many service departments are not good at recommending additional work.
A recent study by JD Power and Associates found that 73% of premium vehicle owners and 71% of non-premium owners reported their service advisor made no recommendations of additional work. Though the percentage of customers who elect to have work done when recommendations are made is fairly high – about 50%. On top of that, the average amount spent by customers approving additional recommended work is $277, compared to $171 spent by customers who did not have additional work recommended. It is important your advisors and technicians understand the value of their findings, and how they impact the bottom line.
Track Recommended Services and Follow Up
If dealerships are not tracking recommended services and forecasting future business, they are missing out. NADA estimates the parts and service business to be $310 billion, with dealerships only accounting for 27% of that total. Dealerships need a system in place to capture comprehensive service information from every visit. They can use the data to improve efficiencies and gather more profits from every customer.
Sure, systems today can help prime customers with notification emails, offer the ability to schedule an appointment on any device, and record interactions once they’re in for service. However, coupled with tools that help dealerships service vehicles more efficiently and provide an elite-level customer experience, the opportunity for more service business, and retention, is glaring.
By tracking past recommended services, your advisors and technicians are aware of items presented during previous visits. This allows the service experience to be tailored to fit the customer’s unique service needs every time. Moreover, having the information in one system helps not only to forecast for future service business, but to perform proper follow up. When your dealership is knowledgeable of previous visits, customers are more likely to trust your work and recommendations moving forward.
We know recalls will continue, so it is time for dealerships to stop feeling satisfied with what they have, and start earning more business. Offer a complimentary inspection with every recall – this primes customers for a positive visit, allowing your dealership to be perceived as attentive, caring, and knowledgeable. Remember, customers have a 50% chance of electing to have recommended work done, so find it and suggest it!