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Safety Recalls: Think You’re Covered?

The Benefits of a Safety Recall Point Person

Do you want to maximize revenue and profits? Do you want to minimize the time spent doing so while making your life easier?

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The best way to boost warranty profits and minimize time and ensure compliance with your safety recall policy (you do have one, don’t you?) is to have a safety recall point person who has both the responsibility and authority to manage safety recall processes and information. 

That way you won’t miss recalls. (Missed recalls = lost revenue and increased liability!)

A point person will be your internal champion — as long as you, the dealer principal, make this authority and responsibility non-negotiable. If you have a compliance officer, ensure they participate in determining who this will be. This point person could be a fixed operations manager, compliance officer, special operations personnel, service manager or anyone you designate.

The point person’s main role is to ensure that processes and procedures are developed to implement the safety recall policy and that anyone who is involved with delivering vehicles to customers follows it.

If you have multiple locations, then the service managers at each location can simply provide input to the point person, so that information can be the most up to date, for reporting as well as decision-making.

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Alternatively — though not as cost-effective in multi-store groups — service managers (or their assignees) can do so for their individual locations.

Imagine the difference between two dealerships. Dealer A uses an automated system to not only verify vehicles’ recall status upon acquisition, but to monitor them daily, with a daily report and a multi-sourced verification upon sale. They have an auto-alert, self-auditing process to do a post-sale confirmation automatically, in case something slips by. They have a policy, process and point person.

Dealer B uses a manual process to check vehicles’ VINs upon acquisition and a manual process to verify vehicles for recalls upon sale. No policy, process or point person. 

Which company do you think is generating more revenue, has lower liability, is maximizing efficiencies, has a lower chance of slip-ups? And, which one has a higher probability of selling vehicles with open safety recalls or not disclosing a recall to customers?

It may be a bit clearer when you see the critical elements of safety recall management in graphic form between these two dealerships. Consider these two organizational types when it comes to gaining the most out of safety recalls, see the chart below.

Which company do you think…
• Is generating more warranty reimbursement?
• Is selling safer cars?
• Has the lower recall liability?
• Has better CSI/CX/VCX scores?

If you are doing everything you can to manage safety recalls in your inventory, chances are you can help keep your customers safe (primarily) and prove your focus on safety in a court of law (secondarily).

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Although owners create the culture and set policies, they need an advocate for safety, who has a process mentality to ensure the lowest liability, while generating the highest profitability possible. 

A safety recall point person can help you achieve these goals and more. 

For comparison, our analyses show that dealers using a proven, best-in-class recall management services with a designated point person reduce the number of vehicles with open safety recalls on their lots by about two-thirds on average, and “power users” reduce open rates by more than 80% on average! This means they are finding more recalls, making more money and selling safer cars.

The safety recall environment is too dynamic to have a static/manual process and no one in charge of this essential operational role in your dealership.

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