Why You Should Be Focusing on Fixed Ops...

[kevinfrye]

With today's current economy, most dealerships and OEMs are putting renewed focus on Fixed Ops. Why? Simple, people might hesitate to buy a new or used vehicle during a weak economy, but if their car needs to be repaired, or they need a part or accessory, they are going to get that service completed regardless of the economy. Look at any large dealership that has been around for a long time, and they will tell you that their fixed ops carried them through tough times.

Here is the dilemma - many eCommerce and Internet Manager types do not want to work in Fixed Ops because their salary is based on profitability from Internet Sales. Since they don't have a "piece of the action" in Fixed Ops, they don't want to work there. This stems back to a long-standing problem within our industry - dealerships are unsure how to pay for folks that handle the eCommerce side of their business. Today's economy points more and more to a salary based payplan as the eCommerce/Internet director of a dealership has responsibilities that are expanding above and beyond the sales arena only.

If you are not focusing on Fixed Ops at your dealership - you should be. If your dealership is not compensating you for these efforts - they should be. Whether your dealership likes it or not, many of the OEMs are now requiring dealerships to meet specific requirements for the Internet market - and someone needs to be addressing these. Are you?

 

[JohnScott]

Look at any large dealership that has been around for a long time, and they will tell you that their fixed ops carried them through tough times.

Kevin, Ive looked around on the internet for information about Dealership income and have not found much information that I could access. I was looking for information about how it breaks down comparing Fixed ops to New and Used car sales, financing, warranties, etc etc.

Do you have any quick info off the top of your head, or does anyone here have info?

Ive read a few places that Service is the most profitable department for many dealers?

I know one thing the Service side doesn't get much attention here which strikes me as odd if it is indeed one of the most profitable departments.. Its the side of the business Im currently interested in, that is why I ask.

 

[CFrentzen]

Being a salaried Internet Manager I would love more information on this as I want to do everything I can to increase business. Best practices, places to start, etc. Any sort of information - I'm not really sure what question to ask.

 

[umer.autojini]

John you can checkout the Nada Data updates which give a simple overview... also the annual reports of publicly traded companies are good for some numbers... other source I know of is First Research or IBISWorld but you have to pay for the reports. Fixed ops mag also had some numbers in their may 09 issue.

 

[kevinfrye]

From the eCommerce perspective, I feel that our position and responsibility is to bring more traffic to our service and parts departments by email leads, phone calls, and walk-ins via our internet presence by:

1) Creating dedicated pages on our websites that provide solid information to our customer base that is seeking info on servicing their car, or buying parts and accessories.
2) Creating enticing specials, incentives, and messages that convert these viewers on our sites into phone calls, emails, and walk-ins.
3) Utilizing SEO efforts to put our dealership in the search engine results for folks that are searching for service or parts/accessories for their car.

In most markets, this area is WIDE OPEN for dealerships. By creating dedicated pages for profitable service areas like brakes and transmission repair, and then performing some SEO, our dealerships now show up for search engine results for folks searching for these common repairs. We are the only dealership that shows up on the first page for these searches in our market, with the other results being the specialty shops like Midas, AAMCO, etc. Remember - most folks don't use the yellow pages anymore, and they are searching for service and parts/accessories online just like they search for new and used cars. Are you where they are looking?

 

[JohnScott]

John you can checkout the Nada Data updates which give a simple overview... also the annual reports of publicly traded companies are good for some numbers... other source I know of is First Research or IBISWorld but you have to pay for the reports. Fixed ops mag also had some numbers in their may 09 issue.

Thanks Umer, the Sonic link was really interesting. I was fortunate enough to meet the former owner of a pretty large dealership here in VA Beach yesterday. He schooled me!