Dealers are at risk of missing out on significant revenue and failing in their duty of care by losing track of customers, according to recent research by data quality experts ADS.
ADS analysis of dealer and industry databases found that approximately 1 in 5 lapsed customers are currently driving vehicles with outstanding safety recalls, posing a potential safety risk as well as an opportunity for increased dealership revenue.
“Dealers typically lose track of around 15% of their customers each year as people’s circumstances change,” said Jon Sheard, operations director of ADS. “As well as missing revenue opportunities, this also leaves millions of cars on the road subject to an outstanding safety recall.”
According to ADS, customers who return to a dealership for a recall appointment are often receptive to additional services, leading to an average extra spend of £309.
With many uncontacted customers driving vehicles with open recalls, ADS estimates an industry-wide potential revenue loss nearing £500 million.
Working with dealer management systems (DMS) and service providers, ADS has developed its ‘Recall Alert’ system to help dealerships cross-reference their customer databases with all available recall data.
A recent Recall Alert initiative, conducted with Marketing Delivery, led to a notable success for a Mercedes dealer group. The project identified customers who hadn’t been in contact for 18 months, revealing that over 20% had outstanding safety recalls.
By re-engaging with these customers, the dealer generated more than £450,000 in additional revenue over a year, as many customers booked further services or purchased new vehicles.
“In our work, we’ve seen franchise dealer databases where more than 20% of lapsed customers are driving cars with outstanding recalls,” said Sheard.
“These vehicles should be booked in as soon as possible, not only for safety reasons but because many need additional work that will otherwise be done by competitors. Based on real-life booking rates and customer spending habits, we estimate that dealerships are collectively missing out on up to half a billion pounds in additional revenue simply by losing track of customers.”
ADS specialises as a data hub to connect key customer data sources across the automotive industry.