Retailers urged to use safety recalls to retain aftersales business on older cars

The gap between older and newer cars in terms of average aftersales invoice value continues to widen, according to new analysis from Marketing Delivery.

The marketing agency examined the average invoice value of aftersales work performed by franchised dealers across the UK for cars in different age brackets.

In 2023, the average invoice value was £480 for cars aged six to ten years, compared to £327 for cars under three years old – a 47% difference. This gap has been increasing yearly; it was 45% in 2022 and 34% in 2021.

Furthermore, the average workshop invoice value for vehicles in the six- to ten-year-old age bracket in the first half of 2024 was £496, a 45% rise over the same category of work undertaken in 2021.

Many retailers use discounted labour rates and reduced cost-per-job pricing as strategies to retain older car business.

However, Marketing Delivery notes that safety recalls can maximize engagement and loyalty across all age brackets without eroding margins.

“It is very simple to implement a recall campaign, which is proven to increase workshop utilisation and boost average invoice value while looking after the interests of the customer,” said Charlotte Murray, commercial director at Marketing Delivery.

“Automation allows us to quickly and easily cross-reference clients’ databases with the SMMT outstanding safety recall database to identify appropriate lapsed customers, and then automatically issue personalised alerts regarding any required work. This can be done tactically, for example, when workshops are quiet, or on an ongoing basis as part of a customer retention and reactivation strategy,” she added.

Murray said recalls provide a ‘legitimate interest’ for reaching out to former customers who might not have had any contact with the business for several years. “Once you have re-engaged for the recall, it’s then over to the workshop to implement a good VHC process to identify legitimate additional work.

“While warranty renewal plays a fundamental role in the aftersales retention strategy, it’s important to remember that warranty work comes with constraints set out by the OEM, and the retailer also has the responsibility for processing the claim, all of which eats into the profit. By contrast, cars at four years-plus typically require maintenance work outside of warranty, resulting in a smoother, more efficient transaction and greater profit opportunity.”

In a recall campaign conducted for Sandown Mercedes-Benz between March 2023 and May 2024, Marketing Delivery contacted 4,595 lapsed customers (those the retailer had not had contact with during the previous 24 months).

Using a combination of emails and SMS, 1,614 aftersales bookings were secured – a re-engagement rate of 35.1% – generating £447,860 in additional revenue. Thanks to a robust VHC process, over two-thirds (69%) of each invoice comprised additional upsell work.

Sandown also used the campaign to support its new and used car marketing efforts, encouraging re-engaged aftersales customers to seek a valuation and consider their current stock. The recall campaign directly prompted 130 vehicle inquiries across both new and used cars, resulting in 26 car purchases.