Maximizing Fixed Operations Profitability: Strategies for Success
Your parts, service and repair teams handle a large portion of your dealership volume and ultimately, revenue. In this blog, we’ll uncover the strategies you can utilize to ensure the fixed operations processes at your dealership are providing top-tier service for your customers and positively impacting your bottom line.
Even when your customers are not in the market for a new vehicle, they still need ongoing access to service centers and repair shops they can count on. Implementing the right fixed operations optimization strategies can help ensure they’re coming to you, setting your dealership up for lasting success and reinforcing valuable customer relationships.
How to maximize fixed operations performance in your dealership?
To boost your dealership's fixed operations, focus on improving service efficiency through better processes, advanced technology, and enhanced leadership skills. These strategies will help drive success and profitability.
A dealership’s fixed operations department includes its body shop, service offerings, and parts replacement program. Dealership managers can help secure this area as a profitability powerhouse by putting into effect best practices like the following:
- Recruiting, training, and retaining top-tier technicians and service advisors
- Enforcing and following good pricing and billing strategies
- Utilizing new technology to improve overall fixed ops effectiveness
- Upgrading facilities and necessary equipment
Creating a strong foundation within your team as well as goals for your department will help with boosting your service drive metrics. As your fixed ops teams perform in a more cohesive manner, your customers will receive a tailored, professional and helpful experience when coming into your dealership for repairs.
Understand and improve effective labor rate for service department profitability
Your dealership’s posted labor rate is the dollar amount you’re charging your customers per hour of labor. However, your effective labor rate correlates to the amount of actual value your team delivers per hour of labor.
The goal is to bring your effective labor rate as close to your posted labor rate as you can by leveraging technology to track technician performance and ensuring your fixed ops personnel are charging for services according to the established dealership structure.
Develop key strategies to improve CSI scores and their impact on your profitability
Your customer satisfaction index (CSI) is truly one of the most important metrics to track and prioritize when focusing on overall fixed ops process improvement. A happy, satisfied client base correlates directly to overall profitability.
There are several ways to advance your dealership’s CSI scores. You can start by keeping customers in the loop through tools like service update texts, emails, or mobile app notifications. Another actionable step is to establish a clean, inviting and safe atmosphere in your service department and throughout your facilities. Also, by focusing on providing friendly service and adding helpful amenities like home vehicle pick-ups or drop-offs, it's possible to offer top-tier service customers will return for.
Dealers should regularly consult with their legal counsel to ensure they proceed in a compliant manner.
Streamline service lane procedures to enhance customer satisfaction
Your customer’s time is valuable. Dealerships that understand this and effectively minimize the average amount of time people spend waiting for service are well on their way to a better overall experience. Effectively staffing can also help maximize appointments and reach additional customers during the day. A strong team can assist if any challenges arise, helping your business create more efficient and positive guest experiences.
Another step is to listen to and effectively communicate with your customers to ensure they’re regularly informed while service is in progress or to remind them of upcoming service appointments. A customer that’s not left wondering about the status of their vehicle pickup will be a much happier guest.
Creating and Maximizing Fixed Operations Processes
Your service drive is often your dealership’s first point of contact with the customer, so ensuring its effectiveness is a key part of lasting success and profitability. Here are some important considerations.
Implement results-driven practices in the service drive
Effective, profitable service drives run like well-oiled machines (no pun intended). Every staff member understands their role and how to deliver on expectations. Equipment is up to date, and operations are streamlined. Keep the following in mind to help ensure that this area of your dealership meets customer expectations and industry standards:
- Embrace technology like digital vehicle inspections to improve performance, underscore transparency, and win customer trust.
- Make customer service a top priority. Be available to your customers and keep interactions professional but friendly with consistent, customer-centric service practices.
- Maintain a clean, pleasant service drive that supports professionalism and puts customers at ease.
- Utilize fixed ops training programs to enhance personnel skills and working knowledge.
Standardization vs. Customization: Balancing consistency with flexibility
Standardization and customization encompass two approaches to maximizing service drive productivity - the execution of uniform procedures across the board, while also tailoring options to suit individual customers.
Long-term success for your dealership’s fixed ops department depends on your ability to balance both approaches. Develop a better understanding of your target audience by conducting market analysis. What is your ideal customer looking for in fixed ops dealership services? How do your existing customers feel about your fixed ops offerings? In what ways can you create a more personal experience?
Standardized services help dealerships keep operations moving along smoothly, but customization helps fulfill (or even exceed) rising customer expectations.
Leveraging Innovation to Boost Service Department Profitability
The key to achieving and maintaining dealership operational excellence lies in making the best use of today’s service technology offerings. Doing so can streamline service, help keep your stores profitable and boost customer satisfaction.
How automotive service technology advances dealership profitability
It’s wise to invest in a dealership management system (DMS) that fully integrates your service department. This supports real-time coordination of all service aspects, from parts ordering, to invoicing, vehicle scheduling and intake, online appointment scheduling and video walk-arounds. You can also make check-in and customer communication easier and more convenient via mobile technology and service apps.
Automate manual tasks when it makes sense, as well. This can help keep paperwork to a minimum, as well as promote accuracy and lift customer satisfaction rates.
Integrating digital tools in the service department
Successfully upgrading your current procedures to include the right technological tools is an operation that takes time. However, utilizing a systematic approach can help you get where you need to be quickly and effectively.
Start with a needs assessment to identify areas where digital tools can generate the most impact. Possibilities include customer communication, service tracking, or appointment scheduling. Carefully research products and service providers that might be best able to meet those needs but can work holistically with your dealership processes and technologies.
Use selected technology in phases, ensuring you plan for appropriate fixed operations training programs for all staff members to learn the tool and ask questions. Monitor the performance carefully to quickly identify potential issues and pivot your approach as needed.
Real-World Stories of Fixed Ops Process Improvement
Need a closer look at how applying fixed ops best practices leads to profitability for your dealership? Check out these exciting success stories from our dealers and see how dedicated partnership and consulting can support your business goals.
How a car dealership in South Texas grew dollars per repair order by 60.3 percent
When a dealership brings the right tech, staff, and practices to the table, their fixed ops department can grow exponentially. A South Texas dealership wanted to improve their customer satisfaction with a service optimization plan that would achieve incredible results.
To help them, our JM&A Group virtual consulting team implemented a system that:
- Raised their CSI scores
- Retained high-performing fixed ops staff members
- Significantly increased effective labor rate
How a South Florida Chevrolet store improved their service drive and CSI
This store was facing challenges related to an inefficient service lane and a lack of personalization. Our team helped them raise both their CSI and customer retention numbers to lead their market while also improving team culture and confidence.
Through a combination of revising the dealership’s DMS pricing guide and using tools like structured greetings and walkarounds,
This dealership’s customer pay dollars per repair order saw a 17.7% increase!
Fixed Operations Optimization Strategies: Warranty and Insurance Processes
Ensuring your fixed ops department’s warranty and insurance programs run smoothly is another key consideration to focus on for profitability. This should involve a customer service strategy that utilizes technology for faster, more accurate processing and anticipates issues before they occur.
Streamlining fixed ops claims handling for financial efficacy
Following best practices promotes optimal claims proficiency and helps keep costs reasonable at your dealership. Your team should be well-informed on the details and coverage levels of the F&I contracts that you sell and the warranties that you offer at your dealership. Provide a clear and thorough explanation of this to your customers so they understand what is covered and what they will be responsible for.
A successful claims handling strategy will also require clear communication channels between your team, a robust digital framework for processing and a proactive approach to managing concerns or issues with customers. Your technology stack could involve outsourcing claims processing tasks as needed to maximize available resources.
Reducing errors and delays in claims administration
Avoid delays and keep troublesome claims miscalculations to a minimum by expanding the overall efficiency of your claims department. Promote and facilitate clear ongoing communication between staff and customers to reduce the likelihood of inaccuracies and misunderstandings. Leverage analytics and data to help claims staff resolve cases quickly and efficiently.
Incorporate tech solutions like mobile apps and web portals to make it easy for clients to report claims or check up on the status of a claim in progress. Make thorough training a top priority for your staff, so all team members are fully prepared to step in and handle snags as needed.
Enhancing Customer Experience and Trust: Fixed Ops Process Improvement
Modern dealership customers are busy and don’t like having to spend time figuring out complicated repair appointments or parts purchases. Embracing options that make using your services convenient for the customer not only helps improve their overall experience but also builds trust in your brand.
Offering valet and remote pick-up service to add convenience
Valet services can enhance customer experiences by adding convenience, streamlining the paperwork stage and taking the guesswork out of scheduling.
Remote vehicle pickup and delivery is a popular amenity that helps support a high CSI. When using this service, ensure your team meets expectations by clearly stating projected turnaround times to help minimize the need for unnecessary person-to-person interaction or confusion.
You can also leverage digital signature technology to allow the customer to authorize repairs ahead of time. Another tried and true tip that will pleasantly surprise your guest? Clean their vehicle before returning it to them.
Tips for appointment setting that enhances service lane productivity
Streamlining your system of setting, changing, and keeping service appointments is key when it comes to maximizing convenience for the customer and meeting modern service standards. Confirm that all personnel are fully trained to clearly and professionally address customer concerns and answer questions.
Review your website’s ease of accessibility and add software that enables online appointment management so that your business is current with today’s service standards and consumer expectations. Including the ability to manage pick-up and delivery service scheduling, as well as routine maintenance appointments or repairs, can be beneficial.
Keep in mind that an efficient service drive isn’t just fast and convenient. It should also inspire loyalty from your existing and potential customers. A well-implemented strategy for winning and retaining customer trust also helps reduce dealership liability and provide valuable opportunities to make a personal connection with the customer which can turn into a trade-in or new vehicle purchase down the road.
Building a High-Performing Team: Fixed Operations Training Programs
Your fixed ops department is ultimately only going to be as good as the people who run it. Putting together and maintaining an efficient team requires continuous effort, and training is part of that strategy.
Setting goals for team growth in the service drive
Consider what you’d like to see improved about your current fixed ops setup and make decisions accordingly. Maximize profits by choosing, tracking, and analyzing key performance indicators (KPIs) that align with your goals such as net profit margin, gross profit, and operating cash flow.
You can keep team members happy and engaged on the job by providing them with the tools they need to do their job well, as well as offer regular feedback, a positive work environment, and opportunities for future advancement. A supportive atmosphere at your dealership that promotes career advancement helps you retain the right people and maximize efficiency.
Continuous training as a profitability driver
Training a solid fixed ops team isn’t something you do just once. Frequent training and development options ensure your entire staff stays sharp and up to date on the latest industry developments. Regularly scheduled meetings with your team can also help identify potential opportunities for improvement and elevate progress.
Consider looking into consulting services from a trusted provider like JM&A Group to help streamline training and operations at your dealership.
Implementing Comprehensive Fixed Operations Optimization Strategies for Profitability
Ultimately, maximizing fixed operations as part of your long-term dealership success strategy is a key part of staying profitable, connecting with customers, and elevating your reputation.
Support effective change management in service departments by prioritizing thorough training and orientation for new systems. Leverage options like virtual consulting services to streamline procedures and provide more services that modern consumers want. Improve efficiency, customer experience and trust by incorporating technology into your fixed operations.
Ready to take the next steps toward fixed ops process improvement, raising CSI scores and experiencing reliable profitability for your dealership? Start your journey today!
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