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Markets Tightening, How Can Dealers Combat The Negative Winds?!

Many dealers we talk with are concerned about rising interest rates, smaller inventories, and how that is going to affect the bottom line in 2023. Many dealers are looking for every option to capture new sources of revenue to offset the issues that are coming, or that are already here.

We see recalls as one of the best ways for the dealership to increase positive visibility with customers, reengage with older customers and make a strong pushback at the economic heads winds that are hitting our industry.

First, do you have a recall process? Not just "yeah, we fix recalls..." but a real process? If you answered, "I am not really sure?", don't feel bad. Every day we talk to dealers and hear the same thing. Like many things that we do each day, recalls have been kind of an afterthought for dealers. Sure, they know they are there but they haven't been looked at as a tool to reengage with customers, get new customers and make money for the store.

Think about it from the customer's perspective. Most times when you are going to a dealership's service area it is because something is wrong with your car and you are expecting the worst.

What if the reason they were coming to your dealership was that you reached out to them to fix something for free on their car that could potentially save their lives or a family member in the car with them (think of the airbag recall). How different would that message feel to a customer VS "come in and we will give you 20% off your service.." or whatever loss leader message you might use to get them in the door.

Now think about if you made the process super easy for that customer. What if you provided pick-up and drop-off service for that customer? A Cox Automotive study found that 89% of customers found pick-up and drop-off for service appointments very appealing. Now couple that with the reason the customer is coming, to get something fixed for free that you are helping them with.

How would you like some brand new customers in the service area? Recalls are a great way to get conquest customers into the store. You aren't "selling" them, you are reaching out to "help" them. Again, if you combine that messaging with pick-up and drop-off service, what a winning message. In that same Cox Automotive study, they found that 67% of customers would switch dealerships if they offer pick-up and drop-off for service.

Now before you say, "recalls don't make much money..." Let me tell you this. Our average customer makes over $20K a month in profits, that's over $200k a year on recalls. Our customers also see a 100% customer pay above the value of the recall/warranty work they do when they bring their car in to get the recall fixed.

With a well-thought-out process, recalls can help dealers grow their customer base, help with retention/CSI, increase their average RO $'s and make HUGE profits.

We would love to talk with you about your process. Even if you think, "Hey, my team is great. I am sure we are doing everything possible..." Set up a call. Worst-case scenario you help your team learn something new they can add to their awesome process. Best case, you realize there is a ton of money out there in your market waiting for you to grab it.

Click the link, set up a 15-minute call with our team to go over your process, tell you a little about what we do and see if we can help you drive more customers into service, make more per RO and make more money over the next 12 months!

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