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Financial and Liability Impacts of Safety Recalls

The more information you have, the more reliable your gut instincts will be.

To maximize safety recall profitability and minimize costs, wouldn’t it be valuable — no essential — to see the timely financial costs and opportunities associated with recalls? And also access the liability impacts that recalls have on your operations?

If you’re looking for recall peace of mind, the question then becomes how to obtain these insights easily and cost-effectively.

Preventing vs. Fixing

As a business leader, you likely want your executives and employees to think ahead, foresee problems, address customers’ concerns before they occur by anticipating them and, in fact, proactively contact customers to ensure they are receiving the most value from your product (and bring them back in).

This approach is valuable in “normal” times and even more so in extraordinary times.

A customer-focused approach can be applied to safety recall management, to maximize revenue and profitability, reduce liability and achieve the highest customer and driver Customer Satisfaction Index (CSI)/Customer Experience (CX) scores possible.

How Do You Become Predictive?

Business intelligence can provide insightful and timely information, so you are able to up-level from “chasing data” to making even more valuable decisions.

For instance, what if you could visualize the revenue upside and cost-avoidance possibilities at your fingertips on-demand — based on decisions you make? An example of a one-store dealership is provided below.

Identifying additional warranty reimbursement opportunities and the costs associated with delays in getting safety recalls fixed make it clear that there are definitely ways to bolster profitability.

Example 1: One location:

Warranty RevenueAdditional RevenueTotal Holding Costs
$30,600$122,400$3,780

Imagine having this on-demand information available per location (for multi-store operations), on your smartphone and that you can ‘dial in’ a specific, user-defined time period? When this information is coupled with actionable recommendations, you can boost profits.

Now, imagine obtaining on-demand costs separated by motorcycles with — and without — remedy and parts, and bikes that are in-brand versus off-brand:

Remedy CostsNo-Remedy CostsIn-brand CostsOff-brand Costs
$3,180$11,060$14,740$28,100

For instance, if off-brand motorcycle holding costs total $28,000 in a month, isn’t it time to wholesale some of these?

Wouldn’t this help you increase profitability by making even more-informed decisions?

Make Even Better Decisions: Knowledge, Not ‘Data’

An excerpt from “The Entrepreneur’s Survival Guide” helps to put this all in perspective:

“Everyone would like to make the best decisions and know the resulting outcome ahead of time. Some make decisions based on facts; others use gut feel to guide their company’s course. Decisions based on excellent information tend to be better, since “managing by fact” consistently provides higher quality decisions than any other method.”

However, decisions are ultimately emotionally-based.

So how do we deal with this apparent paradox? Is it gut feel or logic? Which is better?

The more information you have, the more dependable your gut-feel decisions will be. In order to make the best decisions, the question is, “How can I get the highest-quality information in the least amount of time?”

The most fundamental building block in exceptional decision-making consists of data. Often misunderstood as “knowledge,” data without analysis are useless. However, data transformed into information and then knowledge can help people and organizations make great decisions — and boost value.

The more an organization moves through this value sequence (see graphic below), the better the decisions are and the more agile — and profitable — the company.

There are several computer tools, services and business methods available that can aid you and your company in creating the knowledge needed to help make exceptional decisions. This, in turn, will help you create the future you want.

Increase Value

With the right business intelligence setup, you can have information about the financial and liability impacts that safety recalls have on your operations — at your fingertips — in an on-demand way that increases the value of your operations.

Any solution that you make or buy should take into account comparisons with best-practice-companies as well as in-your-state and national averages to improve learning (i.e., profitability) and provide insights into the specific actions you can take to increase revenue by decreasing liability.

Drive Better Results

The information should be on-demand, and you should take minimal time learning your specific safety recall situation and then driving better results.

Your safety recall business intelligence solution should increase the value it provides you by helping you make even better decisions that provide you exceptional returns on investment.

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