Using Recalls as a Customer Retention Tool

Nov. 7, 2018
Recalls can be a positive for your service department, assuming you ensure that you have the proper staffing to address them. A successful general manager sheds light on how dealerships can use recalls as a customer retention tool.

Where others might see an annoyance, Bill Dauben sees opportunity.

When Dauben, the general manager at Mungenast St. Louis Acura, hears about a manufacturer’s recall, he promptly creates a plan of attack.

“I used to be a service manager,” Dauben explains, “so I know the value of having a recall. Basically, it’s like free advertising to bring those customers in to your service department.

“So I never looked at it as a bad thing. I looked at it as a good thing.”

Yes, while recalls can apply pressure to fixed operations’ staffing, they nonetheless can help a dealership build stronger ties to existing customers and even add new ones.

Dauben is well aware of that fact, considering his dealership—which boasts an Acura “loyal penetration percentage” of 50.8—typically handles three or four recalls per year. Dauben, whose facility has earned Acura’s annual Precision Team award 26 times, sheds light on how dealerships can use recalls as a customer retention tool.

As told to Kelly Beaton

A recall gives you the chance to re-engage customers. A recall can only be done at the manufacturer’s dealership, so you can show them the extra amenities that you can get when you’re servicing at a dealership versus a Jiffy Lube. And, we have loaner cars, and obviously we have highly trained technicians. Recalls provide opportunity, from the moment clients hit the service drive, to do everything in your power to make sure that they want to come back and service with you.

Make the most of every recall customer that comes in. And that doesn’t necessarily mean selling them anything. It just means giving them the right experience. Because, if you’re doing your due diligence in your follow-up after the service—4 or 5 months down the road—you now have all those new customers that are in your database that you can market to, for new cars, for used cars, for service, for parts, for accessories.

You have to be prepared for recalls. Meet with your staff regularly. Do whatever you can to keep your staff comfortable, which will then help them keep the clients comfortable. Maybe that means buying lunch for the technicians and the advisors. Anything to distract them from the pressure that’s on them during a recall. In the past, we have also staffed up, and authorized overtime. I mean, when you have a big recall, you need to do all you can to maximize the customer experience.

You want to be the first dealer to reach out to recall customers, if they’re in an open market situation. The manufacturer normally provides you with a list of those customers in your primary market area, so we have our business development center (BDC) employees, and then our advisor—depending on how big the recall is—start calling and trying to schedule those customers. Most of your longtime customers are going to come to you anyway.

For the most part, calls are done by our BDC employees. We have three or four BDC employees. We’ll say something like, “This is Bill with Mungenast St. Louis Acura. I’m calling to inform you that there’s an outstanding campaign for your vehicle. Please call us to schedule an appointment. … Thank you, and have a great day.” And, on a recall, especially if it’s a safety-related thing like an air bag, we’re going to call a lot; it’s important for the client to get the thing done.

You can use direct mail, or postcards, to reach recall clients. Once we’ve got the 60-65 percent completion rate, the other recall customers tend to be a little harder to get in to the dealership. So we’ll usually use postcards in a pretty bright color, to make sure it gets their attention when they get their hands on it.

We also have our internal service advisor watch local dealers’ inventories. Because you can find recalls just listed on AutoTrader, or, and often, if you offer to go grab that car for the dealer that’s selling it, and you’re willing to go get it fixed and get it back to them, they can now sell a car recall-free. And, you’ve taken all the hassle out of it for them. You can do the same thing on Craigslist; you can solicit individuals that are trying to sell cars, and help them get their car up to date prior to selling.

Overall, our recall procedure looks like this: First, we schedule the customer. We run a verification through our manufacturer that shows us any recalls that are available on the vehicle model; we make sure those are completed. It’s important that the car then gets cleaned. If a customer has never been to our dealership before, we may give them a letter from the service manager for a second, regular service visit, for free. You’re on stage when recall customers come in, so we’ve got to be on point from the time they arrive to the time they leave.

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