Can service departments improve fixed ops coverage?

The average car dealership relies on fixed ops to bring in enough income to cover the operating expenses. With the latest chip shortages and people hanging onto their cars longer, fixed ops have never been so important. According to the NADA, new vehicle sales only make up about 5% of the gross profit for a dealership. Used car sales make up about 13%. Yet, the parts department is responsible for 39% and service takes on the brunt of the profits. Fixed Ops Coverage is one of the vital KPIs your dealership should be evaluating, but can you improve this factor? Let’s get a closer look.

Improve Fixed Ops Coverage

It’s imperative that the fixed ops of a dealership can carry the whole operation. To figure this out, you need to look at the income of the parts department, body shop and service center combined. This figure needs to be more than the dealership’s operating expenses.

If fixed ops can’t carry the overhead for the dealership, it’s critical that you look at ways to be more profitable. Otherwise, when trouble hits, the dealership won’t be able to pay its bills.

1. Pay Attention to Training

With regular training, you can ensure the highest profits possible. Train the entire team to ensure there are fewer comebacks. The trained technician is going to excel at completing the job the first time. Plus, the advisor plays a role in this by ensuring the parts are properly ordered and the customers’ concerns are addressed.

A properly-trained advisor also has better sales skills. They will know what services the customer needs and suggest them with ease. Because of their expertise, they should also be able to explain the services and why it’s required.

Good training also helps you retain employees. When the workers are given confidence, they do a better job and they want to stay. By retaining your workers, you spend less money because hiring and retraining become expensive.

Most importantly, the well-trained staff doesn’t require a ton of supervision. With your service manager available to do their job better, profit is easily increased.

2. Improve Customer Retention

It’s difficult to keep the service department’s profits up if you aren’t connecting with your customers. Reach out to them regularly and stay in touch. You should be maximizing the customer email list to stay connected. Plus, your social media channels offer the perfect opportunity to stay at the forefront of your clients’ minds.

You can also send out texts when you put out new promotions. In some cases, it just takes a coupon or new deal to get someone in for an overdue appointment.

3. Offer More Convenience

When it comes to getting a car serviced, convenience is a driving factor. Customers are too busy to drive to the dealership, drop off a car and have someone pick them up. If they have a local lube, they will take their vehicle there during a lunch break rather than visit the dealership. You must prove that your service department is more convenient and simple to use.

You can change perceptions by providing free pickup and delivery of vehicles. This is more convenient than even offering a loaner car. You can pick up their vehicle from their work and have it back to them before they leave for the day. They won’t even feel the effect of their car being gone and you gained a loyal service customer.

Bottom Line

If you can prove to your customers that your service department is superior because of well-trained employees, better offers, and enhanced convenience, you will gain a client for life. With these few steps, you are on your way to boosting fixed ops coverage.

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