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.
Separation Equals Lost Revenue
Envision you have a multi-rooftop/multi-brand dealership. Your service departments are run independently and consist of the technicians who perform repairs, the service advisors who assist customers and sell maintenance packages, and porters who prep just-sold vehicles for delivery. The parts department at each store and are also managed separately. Even though you own the entire business, each rooftop maintains its own processes and procedures for fixed operations.
With each store operating as a separate entity, pricing for parts and labor is determined by each service director. Staff are familiar with their own store and follow the guidance of store management. In fact, there is a certain amount of competition between rooftops as it pertains to sales revenue and operating expenses.
While each store is profitable, you are experiencing some unnecessary expenses. Accounting is managed on a per-store basis rather than across the board. Processes are not consistent across each location, so employees are not cross-trained to support other stores. Store-related processes are also not streamlined, impacting labor pricing, parts pricing, customer protection packages, and overall customer service. As a result, you’re unable to reduce costs or scale your service business, directly impacting your bottom line and your brand.
Holistic Approach Drives Fixed Ops Consistency
Now, let’s step back and look holistically at your fixed ops as one component of your entire business. At EFG, we bring together general managers, service and parts directors to outline a roadmap for the auto group’s winning strategy, establishing replicable and scalable processes. From there, leaders drill down to the unique goals for each location, and create individualized goals for service advisors to map out training and incentives.
Once everyone agrees on the total winning strategy and overall process, EFG works with dealership management to overhaul the process, from the walk around to multi-point inspection and final delivery. Along with hands-on training from senior management on down, EFG ensures adoption by all team members and develops consistent pricing models that meet the needs of each store. Clients work with EFG to create a sales process for service advisors that includes F&I product education to provide a more rounded customer service experience and open the door to further purchases.
Once the new processes and models are in place, EFG ensures compliance with built-in accountability and ongoing measurement. Monthly check-ins are utilized across all departments to adjust processes as needed and make sure all employees are working toward the overall winning strategy.
This holistic approach has generated significant wins for EFG clients. One powersports group increased their absorption rate by 66 percent after partnering with EFG. Another 11-brand automotive group experienced:
- 53% increase in service sales
- 57% increase in gross profit through service
- 56% increase in average sales per repair order
Our proven team of advisors can assist you and your team with the training, tools, and resources needed to get the most out of your fixed operations. We work alongside your team to create a successful culture, and establish the right goals for your dealership. At EFG Companies, we’re more than an F&I provider, we’re your business partner with more than 45 years of experience. Contact us today to learn more about how our team can help you achieve your winning strategy.