Auto recall challenges in the new digital world by teleperformance

Auto RecallChallenges in the New Digital World

White Paper

Transforming Passion into Excellence

2014 was a record-setting year for automakers, but not in the way they would hope. Reports estimate that more than 60 million vehicles in the United States were recalled last year. What’s more, some 25 percent of cars recalled are never repaired. When recalls are issued for reasons ranging from defective airbags to faulty ignition switches, the staggering percentage of unrepaired vehicles is worrying. After all, a recall is only effective if it gets faulty vehicles off the roads.

Indeed, the very nature of auto recall notifications are changing. The National Highway Traffic Safety Administration is updating their notification system to include more accessible electronic notification methods, including web-based searchable databases, social media notifications and mobile app updates. The NHTSA also recently established new notification guidelines for manufacturers, meaning they also must modernize and update their practices to ensure more customers are recall aware.

What’s also troubling is that brands can face negative attention and potential damage to their image during a recall. It’s no secret in this age of social media that consumers deal with frustration and confusion over the recall process and are vocal about their dissatisfaction. When customers learn of a new, sweeping recall, the tweets and phone calls can come fast and furious. Meanwhile, the auto industry is forced to reconsider whether their crisis management solutions are getting them the results they want: effective communication with consumers and strategic processes that serve to both protect their brand and empower consumers to action.

Recalls Trending Up Last year’s 60 million-plus vehicle recall in the USA was certainly massive, but it was anything but an outlier. In fact, the enormous recall of 2014 was in line with a troublesome trend for automakers: an uptick in frequency and reach of vehicle recalls. In 2013, more cars were recalled than were sold… by nearly 45 percent. The previous record-breaking year for recalls was 2004, not that long ago, when more than 30 million vehicles were recalled.

More and more, automakers are facing growing demands, more intense competition, and reliability issues and recalls. They are also figuring out how to best handle increasingly public feedback from consumers thanks to social media. About 15 brands have issued or been affected by recalls in recent years, according to recent reports.¹

As recalls increase, so too does the potential for social media backlash. While some reports have stated that recalls haven’t been found to create serious long-term brand damage, declining market share represents a strong correlation. From 2003 to 2014, market share for some of the industry’s leading manufacturers has remained stagnant or declined.2

1. Mediapost.com http://www.mediapost.com/publications/article/246416/recallsaffectperceptionbutnoprofoundeffect.html2. Wards Auto Group

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White PaperAuto Recall Challenges in the New Digital World


Maintaining Strong Relationships through Tenuous Times

In this industry, trustworthiness and after-sales customer service are the two most significant issues affecting customer satisfaction, according to the Teleperformance Customer Experience Lab (CX Lab). The fact that only 35 percent of customers say they are satisfied with manufactures’ after-sales services suggests there is room for industry-wide improvement.

When trust is damaged, negativity can strike through the relationship with even the brand’s most loyal advocates. A poor process could also further negatively impact those image qualities that brands work hard to build. The good news is that even a situation like a massive product recall offers an opportunity to slow declining brand advocacy via relationship and process management.

A March 2015 study3 revealed that recalls can have relatively little impact on customers’ purchasing decisions, but that “the negative feedback lifecycle can last longer than six months.” One interesting finding revealed that the size of the recall didn’t necessarily dictate how severe the impact of the resulting negative attention would be to the brand. In one case, an automaker’s poor handling of a relatively moderate-sized recall likely caused a more severe negative reaction than did a larger recall by another automaker.

A company’s decision on how to address recalls with customers has a significant impact on customer perception of a brand’s quality, which ultimately has a significant impact on loyalty. According to Teleperformance CX Lab survey, 50 percent of OEM’s (Original Equipment Manufacturers) customers said customer service was the most important attribute to recommending a brand. The better the company’s customer service experience, the greater the possibility that customers will endorse a particular brand. It again appears that impeccable customer experience and communication throughout the recall process can negate some of a recall’s brand-damaging impacts.

3. Conducted by Infegy and Phoenix Marketing International

Auto Recall Challenges in the New Digital World White Paper


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Customer Communication At the Pulse of Engagement

Automakers who have faced a recall are all too familiar with the social media firestorm that can spark in real-time when customers are dissatisfied – with their automaker and with its engagement efforts.

In our analysis conducted by Teleperformance CX Lab, we asked a number of industry customer service agents how they would first contact consumers regarding a recall. Across the board, a customer’s first engagement is via a mailed letter. Current regulations may only require OEM’s to send a mailed letter, but it should come as no surprise that customers’ expectations are neither exceeded, nor even met, when automakers do the bare minimum.

To contact the manufacturer in return, customers are given the option of phone call, web form or e-mail or, once again, paper mail. However, our study shows that paper mail is not a preferred method of communication for consumers – regardless of their ages.

Customer engagement preferences are shifting, especially among the younger generations. Voice communication is currently consumers’ most preferred engagement channel. However, Internet-based channels including click-to-chat and e-mail are growing increasingly popular. Younger generations of “digital natives” may appreciate the always-available quality of click-to-chat and e-mail channels. Our survey results indicate that those two options may soon surpass voice communication as the preferred methods of engagement in the coming years.

Additionally, it’s important to note that the National Highway Traffic and Safety Administration (NHTSA), the government agency that oversees federal recall standards and regulations, is also moving toward more contemporary and digital-friendly recall notification methods. As part of a larger effort to consider the efficacy and reach of traditional (mailed) notifications, the agency has taken concrete steps to ensure that both younger and older drivers are recall-aware. The NHTSA has instituted a web-accessible database that allows car owners to search by their VIN4 number to find out whether their vehicle, tires or equipment is involved in a recall, investigation, or complaint. Consumers can follow the NHTSA on such social media platforms as Facebook and Twitter to get up-to-date recall information. The agency also launched SaferCar, a free mobile app for both Android and Apple devices, which allows users to register their vehicle and receive notifications when a related safety issue has been discovered, and also submit safety complaints directly to the agency. What’s more, the NHTSA also decreed that traditional white-mailed notifications will now carry a new, distinct label helping to ensure those consumers who still rely on paper mail clearly understand that their vehicle is involved in a recall.

4. Vehicle Identification Number

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These innovations further illustrate the changing tide in notifications. As manufacturers are further pushed to adapt to a changing consumer base, they must be ready to support customers – in their channels of choice – through the next steps of the recall process.

Auto Recall Challenges in the New Digital World White Paper

5Transforming Passion into Excellence

As companies continue to be affected by the increasing number of recalls, it’s more important than ever that brands have the expertise they need to quickly turn strategic communication into actionable results. Teleperformance works directly with manufacturers to design a custom crisis management plan. Via a multi-pronged approach, automakers can protect their brand and improve the overall recall process.

How can Teleperformance support OEMs to improve their current auto recall process?

Social Media Solutions: Teleperformance can support companies in their efforts to monitor social media response to the recall, and effectively communicate with customers on their preferred social platforms. More Engagement on More Channels: Teleperformance can also support manufacturers to advance existing and adopt new technologies, enabling them to connect to consumers on their preferred channels. Tools such as click-to-call and click-to-chat can be integrated onto manufacturers’ websites and serviced by Teleperformance. Engagement via click-to-chat can be live with a customer service agent directly serving the customer; semi-automated, which improves agent speed and efficiency; and automated, which provides automated answers based on text analysis of their chats or e-mails. Click-to-call can function in two ways – VOIP, a consumer-initiated voice interaction, and Call Me Back, where customers can request a call or schedule a time when a specialized agent may reach them regarding auto recall information. Customers may feel increased satisfaction knowing their questions were answered and they’ve been made aware of things like recall updates and replacement part availability, which can spur them to take action. Multiplatform and Mobile: We can deliver these consumer-facing solutions via tablet, mobile phone, desktop computer or laptop, helping to ensure consumers can reach the manufacturer easily, and using the technology of their choice. We can also incorporate our customer service experience via mobile apps. Back-Office Case Management: Recalls don’t simply pose a problem for consumers and brands, but also for the dealers and government. Our solutions can support OEM s optimizing their interaction with dealers and government. We also offer custom, integrated solutions for maximizing internal efficiency while reducing mistakes and minimizing financial impact. These systems increase follow through and ultimately, case closure.

Teleperformance Recall Solutions for Real-Time Crisis Management

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Teleperformance is the worldwide leader in multichannel customer experience management and interacts with 35% of the world’s population each year. Companies who utilize Teleperformance solutions will see immediate results including the reduction in repeat calls by using highly qualified agents and Teleperformance management processes, reduction in call volumes with agents using self-service and internet products, reduction in bottlenecks in processes, and improved customer satisfaction, loyalty and advocacy by offering new channels. And Teleperformance delivers consistent customer experience on any channel, and on any device allowing customers to navigate through different channels seamlessly. It is important for companies to implement an integrated multichannel strategy and prepare for a recall crisis before it occurs. By incorporating a streamlined, yet multifaceted, recall strategy, automakers can improve the most critical areas during a recall crisis – consumer communication and relationships, as well as inter-office operations. And when it comes to maintaining brand integrity, happy advocates and safer drivers, that can make all the difference.



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Teleperformance can support you to be

prepared for a recall crisis before it occurs.

About TeleperformanceWorldwide leader in Multichannel Customer Experience

We are a People company with a people-centric strategy, interacting with people all over the world. It’s all about People. They are part of who we are and what we do. We analyze their behaviors. We understand their wants and needs. That’s why we deliver outstanding customer experiences through integrated multichannel solutions to enhance customer experience results for our clients.

Transforming Passion into Excellence8

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Auto recall challenges in the new digital world by teleperformance