A Moore School faculty research team wants to encourage automobile owners to pay more attention to automotive recalls — and ultimately make roads safer for traveling.
Because of the danger posed when owners disregard vehicle recall notices, the four faculty members examined the impact of the national “Safe Cars Save Lives” digital marketing campaign that was initially launched in January 2016 to encourage a higher percentage of repairs in response to recalls. There were 786 automotive recalls in the U.S. in 2020; the recalls impacted almost 32 million vehicles in that year alone.
“Consumer noncompliance to product recall notices is a significant problem and one that poses risks from a consumer safety perspective,” said Kartik Kalaignanam, a professor of marketing at the Moore School and also a Moore Fellow. “The ‘Safe Car Save Lives’ digital marketing campaign was launched by the National Highway Traffic Safety Administration (NHTSA) to improve consumer compliance to product recalls. Studying whether this campaign was effective in improving consumer compliance was exciting because of how important the implications ultimately are from a public policy perspective.”
Kalaignanam worked alongside Sotires Pagiavlas, who led the research project when he was a Moore School marketing Ph.D. student; Pagiavlas is now an assistant professor of marketing at The Pennsylvania State University.
Joining Pagiavlas and Kalaignanam were Manpreet Gill, an assistant professor of marketing at the Moore School, and Paul D. Bliese, a Jeff B. Bates Professor of Management at the Moore School.
The team’s research, “Regulating Product Recall Compliance in the Digital Age: Evidence from the ‘Safe Cars Save Lives’ Campaign,” has been accepted for publication in the Journal of Marketing.
They used a variety of data sources, including the NHTSA’s vehicle recall database, to examine how effective the marketing campaign was in swaying automobile owners to address their recalls.
“For decades, a key issue driving consumer noncompliance to product recall notices in the automobile industry has been a lack of consumer awareness,” Kalaignanam said. “A digital marketing campaign like ‘Safe Cars Save Lives’ accomplished something critical — it made consumers aware that there were active recalls for their products and provided them with the relevant information online that they needed to get their vehicles fixed. The campaign tackled low consumer awareness in a very effective way.”
The digital marketing campaign also proved even more effective at increasing recall repair rates for older vehicles. Less than 50 percent of consumers who owned vehicles for model years between 2003 and 2007 fixed their recalled vehicles, far below recall remedy rates of 70 percent for cars of model years 2013-2017. The research team found that the digital marketing campaign was comparably more effective at increasing consumer compliance among owners of older vehicles, an issue that the NHTSA had been struggling to address for years, Pagiavlas said.
The research team noted that media were also important in alerting consumers of recall notices.
“Our research finds that the ‘Safe Cars Save Lives’ campaign was more effective at increasing consumer recall compliance for recalls that received media coverage compared to those that did not,” Pagiavlas said. “On average, recalls that had at least one article of media coverage had about 16,674 more vehicles fixed in the first four quarters the digital marketing campaign was active than recalls that had no media coverage.”
While the digital marketing campaign certainly contributed to more vehicles being fixed, barriers still exist for owners to fix their automobiles’ recalls. Kalaignanam said that auto manufacturers may overestimate how long a repair will take to deter consumers from fixing their vehicles because of the logistical inconvenience of scheduling the repairs. He suggested that manufacturers need to be pushed to more accurately to describe the time it takes to make repairs in the recall notices.
The research team also pointed out that the older a vehicle is, the less likelihood an owner may be aware of a recall. The marketing campaign made an important impact on increasing the number of older vehicles that were remedied.
Recalls not only make vehicles safer, but they also have a significant economic impact.
Citing past research, Kalaignanam pointed out that improving consumer recall compliance will likely reduce the number of automobile accidents on the roads and lower the total economic costs associated with accidents.
Past research has found that an average of $14,000 is associated with each motor vehicle accident, taking into account fatalities, non-fatal injuries and the physical damage to the automobiles. Therefore, the significant impact of “Safe Cars Save Lives” on increasing consumer recall compliance likely decreased the number of accidents on the road and saved lives.