Fixed-Ops Profitable

Stop Waiting, Help is not coming!

By Jeff Cowan

Is your fixed-ops profitable?  They should be. Think about it.  If people are not buying new cars then they are keeping the ones that they have, putting more miles on them, needing more services, needing bigger repairs and looking for someone to help them with both.

There is no doubt that the past year has been very tough on the auto industry.  I understand that when auto sales are down the manufacturers have to do everything they can to turn it around, and so far, I would give the effort shown a C+ to B-.

What I do not understand, is if everyone knows and agrees that Fixed Operations is the true backbone of the car dealer and one of the few places left where a substantial profit can be made and where true customer retention is gained, then why is no one doing anything with Fixed Operations on a large scale to grow that side of the business?

Now Would Be the Time

Now would be the time to mount an effort to take on the aftermarket sector and win back the millions of customers who do business with them.  Now would be the time to reevaluate how Service Departments are run and eliminate old practices that have never worked and replace them with those that do. Now would be the time to create a training and certification program for all who work in key roles in Fixed Operations to insure a consistent level of competence throughout dealerships nationwide.Fixed-Ops Profitable

Now would be the time to create ad campaigns that advertise the benefits of doing service business with your local Dealer. Now would be the time to teach your staffs how to flat-out sell.  Why wouldn’t manufacturers do these types of things when most of the top 10 to 15% of the most profitable dealerships do part or all of these items?

The sad news is that no one is doing any of this and to the best of my knowledge, I know of no one planning to do any of it on a large scale.  As a matter of fact, I have been in contact with several manufacturers recently and not one of them has plans that would do any of what I have described above. Instead, they seem to be intent on doing the same thing they have done for years – work to get vehicle sales to return, sell a lot of vehicles to a lot of people and hope they come back for a lot of service.  

You can go along with this plan (or non-plan) if you choose and history tells us  things will eventually turn around and you will have another 8 to 10 year run before a sad economy zaps you again.  Or, you can do like the top 10 to 15% of the Dealerships and take the mission on yourself.

Drive Your Own Future

It is clear, you have a few options to combat what is going on and to stop and change forever your future path.  Your options are:

1.    Self-analyze your current situation and make the appropriate changes to make you a top Dealer.

2.    Visit several of the highly successful Dealerships and see exactly how they have accomplished these feats.  I have found that the most successful Dealerships are usually very willing to allow others to see what and how they do things. 

3.    Hire someone full-time who can do this for you.  There has never been another time when so much talent was available that specializes in these areas.

4.    Get outside help from a person or firm that has experience in this area and can quickly and efficiently help you make and execute a plan that makes you a top 10 to 15% Dealership (My firm can do that).

5.    Sit back, wait, do nothing and wait for the manufacturers to come up with a plan. 

I would be willing to bet that the many of the Dealers who were recently forced to close would love to have these options.  I would also bet that if they had it to do over they would select one of the first four.

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