In recent months, the automotive industry and the media have been buzzing with news about automaker recalls. During the week of August 5, 2024, alone, the National Highway Traffic Safety Administration (NHTSA) issued a staggering 142,000 recalls, raising the total number of affected vehicles to over 14 million in the first half of 2024. This surge underscores critical safety issues and poses substantial risk to the reputations of automotive manufacturers globally.

Recall data shows the most common issues during Q2 2024, specifically, were related to prevention systems in up to 1.6 million vehicles, followed by electrical systems (affecting up to 814,223 vehicles) and powertrains (affecting up to 586,211 vehicles), with many recalls also related to safety features such as seats and airbags. Addressing these recalls promptly and effectively is essential in ensuring driver safety and meeting regulatory requirements, but doing so also presents opportunities to enhance trust and build brand loyalty that drives business success for original equipment manufacturers (OEMs) and dealers doing business in the U.S.

Key elements of recall campaigns with high completion rates

According to NHTSA, successful recall campaigns are built on a foundation of clear communication and strategic outreach. Effective campaigns use direct and straightforward language to convey the risks of the issue being communicated, ensuring vehicle owners understand the urgency and importance of the recall. Accurate and up-to-date owner contact information is essential for efficient communication, while a multi-channel approach – encompassing email, mail, phone, social media and other relevant avenues – encourages awareness engagement through various touchpoints.

Moreover, emphasizing repairs are free and prominently featuring the manufacturer’s branding in recall materials helps build credibility and trust, and encourages prompt action. Tailoring the campaign to address specific owner demographics and addressing potential barriers to obtaining repairs further enhances its effectiveness. By leveraging the expertise and resources of the manufacturer’s dealer network, the recall process can be executed smoothly and efficiently, ultimately reinforcing the campaign’s overall success.

Building trust and loyalty – and driving dealership service revenue – through proactive recall-related outreach

Proactively engaging customers regarding recall repairs can significantly enhance dealer-customer relationships. In fact, a recent case study found dealerships that reached out to customers about recall repairs saw impressive results: $1.5 million in recall-repair work and an additional $500,000 in service business. Moreover, according to Urban Science® research conducted alongside The Harris Poll, 81% of auto buyers said a $35 incentive would motivate them to act on a recall their vehicle was subject to; this figure increased to 85% with a $50 incentive and spiked to 92% when the incentive was increased to $100.

Offering targeted incentives – like those deployed through Urban Science’s AutoHook® solution – can be a very powerful tool in positioning OEMs to effectively and efficiently clear vehicle recalls and drive traffic and profitability across their franchised dealership service bays, helping dealerships better compete and build potentially lucrative relationships with new and existing customers.

Gift cards and other rewards create a tangible, value-added benefit for customers to stop in for recall-related repairs – and for general repairs and maintenance. And even modest incentives can promote good will and effectively encourage customers to visit a dealership. In a recent campaign, Urban Science’s AutoHook solution identified over 3,000 customers with vehicles in need of recall-related repairs and deployed a $250 gift card incentive to entice customers to visit a dealership for service. This campaign achieved a 12% lift in repair rates over the control group – an increase sustained for 90 days after receipt of the correspondence.

Harnessing the power of recalls to drive additional revenue, profitability

Recall visits have great potential to supercharge a dealership’s broader service efforts. Many customers take advantage of the opportunity to address other needs during their recall appointments and may return for additional visits in the future if they have a positive experience.

Even better, recall appointments can drive traffic to dealership showrooms. Customers visiting for recall repairs may be interested in checking out new vehicles while they wait, offering a chance to introduce them to potential upgrades if dealers take the time to create a customer-centric service-to-sales handoff. This approach is particularly effective for engaging owners of older vehicles, who may be more inclined to explore new options. By leveraging recall-driven service visits, OEMs and dealers can enhance customer satisfaction, boost service revenue and create opportunities for new car sales, thereby strengthening their overall service-to-sales loops.

As customer needs and preferences continue to evolve faster than ever, dealers must tap the power of daily industry sales data – not weeks- or months-old registration data – to plan for, and develop, dealership infrastructures that are well-equipped to sell and service an increasingly diverse population of vehicles, including a growing number of electric vehicles (EVs) and hybrids, and a stable base of internal combustion engine (ICE) models.

Urban Science’s ServiceView™ solution is the only offering in the industry that taps the power of daily industry sales data to measure service performance across an automotive retail network and its dealership service departments, helping OEMs and dealers analyze and forecast sales trends with precision other offerings simply can’t match; the result is an improved ability to meet the needs of customers now and in the future. ServiceView also features a recall module that specifically monitors and tracks recall results at the dealership level, including competitive benchmarks. Additionally, it features a service-to-sales analysis that helps OEMs and dealers (if access is enabled by an OEM) better understand the importance of where service-loyal customers purchase their next vehicles – including competitive-brand stores – and the value of cultivating service-department customer relationships while highlighting strategic ways to capture more service opportunities.

The broader, lasting impact of exceptional service

Addressing recalls effectively offers OEMs and dealers a powerful opportunity to enhance their overall operations and drive sales and service revenue that will not only increase their brand loyalty and trust but position them to thrive in the wake of seismic shifts regarding vehicle technology and customer needs. According to research by Urban Science and The Harris Poll, 56% of auto buyers strongly agree their impression of a store’s service department has a significant role in their decision to purchase or lease a vehicle from the location. Furthermore, according to Urban Science data, service-loyal customers are twice as likely to return to a dealership when it’s time to purchase a new vehicle.

By addressing recalls with a commitment to delivering exceptional service, dealerships not only resolve immediate issues, but also foster strong, lasting relationships with their customers; this approach positions them to thrive in an increasingly competitive market and capitalize on growth opportunities that have potential to remain unseen without the visibility daily industry sales data provides. Using these insights to inform sales and service marketing strategies remains a key approach for leading automakers and dealerships nationwide and will continue to be pivotal in securing customer loyalty and driving long-term success as the market continues to transform at a record clip.