Tag: Cox Automotive

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EFG Companies Featured Fixed Operations

In Fixed Ops, Coordination Counts

When was the last time you did a health check of your fixed operations (fixed ops) department? How is fixed ops affecting your CSI scores? Is the department helping or hurting your customer retention efforts?

According to Cox Automotive, fixed operations as a profit center is more important than ever in 2023. Dealers should see continued strong dynamics in the service lanes, with or without a recession, as owners try to hold onto their vehicles longer. While the average ticket size increased in 2022, revenue is not a guarantee. In order to be successful in fixed operations, all of the cogs must be coordinated – not only within each dealership’s service bays but across rooftops as well.

Savvy dealers take a holistic approach to fixed ops, sales and F&I with the understanding that each area of the dealership directly impacts overall dealership operations and the total customer experience. While each department might occupy a separate line item in the spreadsheet, failure to understand and capitalize on a coordinated customer service approach reduces efficiency, profitability and customer retention. Let’s look at a scenario where lack of coordination within the service department impacted the bottom line.

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EFG Companies

Make the Most Out of Maintenance

Possibly since the dawn of the first dealership, dealers have known the importance of building repeat business through the service bay. The more the customer relies on your dealership for all their vehicle needs, the more likely they will return for that repeat purchase, creating a cycle that can last for as long as the customer is driving. However, that golden cycle of purchase-service-repeat seems more elusive than ever.

According to XTime Metrics and Cox Automotive, for service departments at U.S. dealer franchise locations, the Repair Order Volume Index in January 2022 decreased month over month by 9.0 percent from December 2021, while the Repair Order Revenue Index increased 1.6 percent during the same time frame. Repair order volume remains well below pre-pandemic levels, but revenue per repair set another record high. The service bay was less busy, yet revenue continued to boost the dealership’s overall bottom line, generating an average of $490 in revenue per repair order.

Service revenue proved so lucrative for retail automotive dealers in 2021, that six of the country’s largest dealers notched a 12.6 percent increase in the fourth quarter of 2021 vs. 2020, according to company filings. Clearly, measurable revenue can be driven in the service bay.

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Industry Trends

Get on the Road to Digital Sales Success

Does it feel like aside from news on the pandemic and supply chain challenges, the mantra for the last two years has been digital sales? In their last quarterly shareholder meetings, each of the publics discussed their digital sales platforms. In the most recent car buyer journey study, Cox Automotive stated that 80 percent of consumers plan to complete at least part of their vehicle purchase online, and 25 percent expect the vehicle purchasing process to happen entirely online.

Of course, we know there is a difference between expectations and reality. In this digital transition, very few transactions happen online, soup-to-nuts. The average consumer’s actual experience reflects a more hybrid model, with both digital and physical touchpoints.

Dealers navigating this transition need a strong customer engagement strategy, both on and offline, which requires new skillsets and training. From the initial encounter to closing the sale, your team members must be adept at engaging with the customer on their platform of choice. The salesperson who masters these many nuances will make the sale – and get the commission!

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