There has been a lot of confusion amongst Dealership principals when it comes to recalls and recall completion outreach or as we call it here at Piston Data, Recall Marketing. Some have even made erroneous statements, saying that recall marketing is illegal, which is so far from truth that it completely goes against everything that Federal safety regulators and automakers are trying to achieve.

retooling_RecallsIn April 28, 2015 The National Highway Traffic Safety Administration (NHTSA) held a workshop in Washington, DC to discuss options to improve vehicle safety recall completion rates. In the workshop NHTSA outlined recent agency activities aimed at improving recall completion rates as well as the best examples of steps that can be taken to boost recall completion rates.

Every day, the National Highway Traffic Safety Administration works to identify and force the recall of vehicles.  But it’s not enough to just identify defects —protecting the public means ensuring that those defects are remedied. Remedying recalls is a collaborative effort, between all of the players —manufacturers, dealers, automotive safety advocates, and others— to brainstorm around the best ideas…

Last year General Motors was in a race against time to contact consumers who owned vehicles with a potentially fatal ignition switch problem. With intense pressure from lawmakers, regulators and media, GM embraced outreach tactics more associated with retailers than automakers, such as Facebook messages, online ads and gift cards. GM also sent vehicle owners a personal letter from CEO Mary Barra and hired a company to call owners’ homes, imploring them to visit a dealership right away.GM_Recall_CompletionGM executives have said they want to surpass the traditional recall repair completion rate, which is traditionally about 70 percent to 80 percent. While this percentage may sound somewhat positive, it still means—especially in the case of GM’s massive recall—that millions of defective vehicles could still be on the road. In fact, a study by Carfax, Inc. estimated that 46 million vehicles had unfixed defects at the end of 2014.Recalls ignored

“Recalls are only successful and can only save lives if they end up getting the cars fixed, but we know that 20 percent of vehicles that are recalled – and possibly more than that – go unrepaired, this is a safety risk to the drivers of those vehicles and all the people they share they share the road with, too. Getting to 100 percent going to be a real challenge, but it must be our ambition. It’s going to require 100 percent commitment from everybody: automakers, suppliers, dealers, rental car companies, consumers, safety advocates and, of course, NHTSA. And until the day we hit that mark, we need to look for new ways to get there”, said U.S. Transportation Secretary Anthony Foxx.

FACTORS THAT CONTRIBUTED TO AUTOMAKERS SEEKING HIGHER RECALL COMPLETION RATES

Consumers and auto-retailers attempting to navigate through this safety recall morass have an extremely difficult time. They are faced with a recall landscape that changes daily, if not hourly; they are forced to accept NHTSA and OEM data that have numerous and significant attribution, communication and timing errors; and they must spend significant resources to manually check every VIN, every day with safety recall data that is less than completely accurate. Clearly, the best alternative is for the OEMs to reduce their defect rates. But until that becomes a reality, negative vehicle safety recall issues will remain high for consumers and for auto retailers for the foreseeable future.

  • Challenge of finding customer from the manufacturer as well. Mail notices out and get approx. 20% return rate. Even bigger problem for older vehicles. Have to use registration data. 15% return rate using texts.
  • What percentage of vehicles on the road get their registration updated? Renew registration. Information is out there but getting it is problematic.
  • Always a lag in registration. For example, when people move here, don’t necessarily update registration with new state despite state rules to update within “30” days of moving.
  • Example of Jeep recall – recall happened in August-December of 2013 but parts weren’t available until August 2014. By the time parts came in, can’t get people to come in. Showed interest at time of recall but interest died by time of parts available.

Safety Recall Data Errors

No single-source, all-OEM VIN-specific and completely up-to-date safety recall database exists. Safety recall data is held by two groups: The collective vehicle manufacturers and by the Department of Transportation’s National Highway Traffic Safety Administration, [NHTSA].  NHTSA’s year/make/model/style recall database, mandated by Congress last year to be made available to the public, powers their consumer-facing recall lookup and year/make mobile recall alert capabilities: www.safercar.gov. Unfortunately, NHTSA’s year/make/model/style safety recall data has been proven to contain up to 30% errors in attributing NHTSA safety recall ID #s to OEM vehicle configurations.Piston Data Social Photos9

Mark Rosekind noted that dealers don’t need to wait for legislation. “An act of Congress is not needed to address this situation: there is nothing stopping dealers, today, from handling recalls.

One company that works on recall completion outreach with 19 of the top 30 automakers has found success through a combination of postcard mailers, email and phone outreach to track down and convince owners that they need to repair their vehicles. Its goal is to conduct outreach on a sufficient level and frequency to spur customers to act, according to John Holloran, President and CEO of Impartial Services Group, LLC, a Stericycle business.

Holloran estimates that his company can increase completion rates by 150 percent to 200 percent on a quarter-to-quarter basis, thanks in part to software that coordinates and sequences outreach to vehicle owners. The key is to go beyond the one-size-fits-all solution that OEMs have traditionally used in recall notification.

Public Opinion Strategies conducted a national online survey in August 2015. The survey was involved 1500 motor vehicle owners, including more than 1000 who received a recall notice in the past 1-2 years.

Topline results: 64% of motor vehicle owners who received a recall notice in the past 1-2 years reported repairing their recalled vehicle, while 31% had not repaired the vehicle yet but intended to, while 5% had no plans to participate in the recall.Recall completion rates

Effective ways to improve recall repair rate? The most effective items tested are ranking the severity of recalls (64% said very effective, 96% total very/somewhat effective); a bold mailer notice that stands out and mentions a free repair (52%; 89%); and a reminder on car insurance notices (38%, 83%).Piston Data Recall Mailer

Awareness of recalls: Motor vehicle owners who received a recall notice in the past 1-2 years overwhelmingly reported being made aware of the safety recall from a letter or email from the manufacturer or dealership (84%). Another 8% learned of the recall upon taking their vehicles to a dealership for service. Others became aware of the recall from the news (4%), a telephone call from the manufacturer or dealership (1%), from family or friends (1%), or from a government website providing recall information (1%).

Communicating with customers does not end with a recall notification letter. How we communicate with customers affects their response. We want to convey the severity of the issue, but we also want to manage expectations in case remedy parts are not immediately available.