Recalls -- The Ultimate Retention Tool

Recalls are a fact of life in the industry and for many dealers they’re a huge headache. But with a bit of planning and preparation the smart dealership can turn those recall lemons into lemonade. On the upside, a recall can drive more customers to your service department than the most successful ad campaign you could ever conceive. Recalls create opportunities to win back customers who’ve defected and strengthen relationships with those who haven’t.

Consider the fact that 60% to 70% of your customers defect from your dealership after their vehicle’s factory warranty expires. Reasons vary but for many customers the defection stems from an unpleasant experience at some point after the sale and it’s often service related. A recall creates opportunities to mend fences and restore confidence and can go a long way toward winning those customers back.

According to Lee Harkens of M5 Management Services, recalls tend to raise immediate concerns about safety. Media coverage can drive consumer response to some degree but all customers have two common reactions when they receive a recall notice: they’re concerned about the recall and they want the problem fixed quickly and correctly. You’ve got their full attention at a critical moment.

The challenge for most dealerships is how to manage an influx of recall work without having a negative impact on existing business. According to Harkens the trick here is preparation and he outlines a 4-step plan to take advantage of recall work and turn it into a net gain for your dealership.

• Define your Objective — If you think of the recall business as an asset, how will you leverage it and what will a win look like? Your objective might be as simple as making a favorable impression. It could be to increase sales or maybe the goal is to fully satisfy OEM requirements. As you define your goals remember that your customers have concerns about the recall and it should be part of your objective to put the customer’s mind at ease. It’s not a time to put pressure the customer.
• Work through your process and define the steps from hello to goodbye — It’s an opportunity to spend quality time with your customer. Your advisors should focus on slowing the pace of the interaction at write-up. Anticipate the questions customers are likely to have and make sure you invite their questions and concerns. If you do an MPI think carefully about how to present your findings. Most customers aren’t anticipating the need for additional work and the prospect of unexpected additional repairs usually won’t be well received. That doesn’t mean you shouldn’t alert your customers to your findings, it just means you’ll need to use a thoughtful, tactful approach.
• Execution — If you ask service departments if they’re staffed for a large influx of recall business most will say they aren’t. So how do you keep the “extra” recall work from ending up on the back burner? Ideally, you expand your capacity. Consider implementing production objectives for your tech staff (a tactic that can improve overall efficiency apart from recall business), offer spiffs for recall work, consider extending hours for select techs or offer extended hours specifically for recall work. Harkens suggests thinking out of the box here, get creative, maybe seek out retired techs looking for occasional extra income or part time techs doing a bit of moonlighting.
• Win The Customer — Here’s your opportunity to challenge the reasons why the customer might have defected. If the reasons had to do with a previous negative experience, a positive experience with recall work can go a long way toward repairing the damage. Script out the interaction between the advisor and the customer. Train everyone involved in the process and make sure they’re clear on the objectives. Create accountability for all departments and follow through.

Remember, recalls don’t have to be painful. Approach them creatively and you can turn a challenging situation into a great opportunity to regain and retain customers.