Fixed Ops Journal - October 2017 - 43

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incentive money - much of which is based
on volume - starts to vanish as well. Without
a proper focus on fixed operations, dealership
revenue will sink if sales tank, says Rick Wegley, an instructor at NCM Institute, a management training firm in Kansas City, Mo.
"I'm not saying we need to stop selling vehicles ," Wegley says. "But we must understand
that fixed operations are also the lifeblood of
the dealership."
Even as service departments renew their
pursuit of customer-pay jobs, he adds, they
can't allow warranty and recall work to recede.

trained on how to make proper presentations
to the customer on various maintenance
items."
Reed cites an estimate by Hunter Engineering Co. that three of every five vehicles that enter a service drive need a front-end alignment.
"If 60 percent of the vehicles are going to fail
an alignment check, obviously there's a huge
opportunity for service advisers to educate
the customer and sell alignments, quickly increasing their revenue," Reed says.

3. Schedule service appointments
early and often
A simple strategy to keep vehicle owners
coming back to the dealership, Wegley says, is
to schedule the first follow-up service appointment as soon as a car or truck is delivered. Sales and service employees must be
trained to make such appointments automatically, he says.
"Every vehicle serviced in your dealership,
every time, every customer, no exceptions,"
Wegley insists.

4. Emphasize preventive
maintenance

throw in everything for one customer, that's
just going to drive them away. I want to have
that customer come back 10 more times."

8. Love your technicians
Your competitors want your best service
technicians - and they're paying juicy bonuses. How to fight back? Treat your techs like
the treasured assets they are.
"You'd better find a way to love your technicians," Coker says. "Show them recognition,
show them appreciation, talk to them about
their families and make sure you recognize
their value.
"From there, we need to be studying our
techs to make them more proficient and efficient," he adds. "Take the parts to them, find
ways to keep them in their stalls longer. And
put more money in their pockets, which
makes them less poachable."

9. Go the extra mile for your
service employees

6. Tell your service customers
what they need to hear

Jeff Cowan, owner of a service manager and
adviser training firm in Rancho Margarita, Calif., advises: "Service has to sell preventive
maintenance and repairs in order to lead to
more sales.
"The car is going to run better" with preventive maintenance, Cowan says. "You've got a
happier customer, and happier customers fill
out perfect survey scores, they tell people
around them, and they come back and do
more business.
"You can get the trifecta on the service drive
- the sale, the survey and the retention."

John Fairchild, CEO of Fairchild Automotive
Solutions in Atlanta, warns: "The No. 1 thing
dealerships are missing is not thoroughly presenting the customer's legitimate needs, particularly in high-mileage cars.
"I wouldn't be doing you any kind of justice
if you come in my shop and you need brakes
or a belt or something else critical, and I'm not
taking quality time to educate you about it,"
Fairchild says.
If a service customer balks at expensive repairs on an older vehicle, Fairchild notes,
that's the time to bring the sales department
into the discussion. A new or used car might
be a better option.

5. Keep training your service
advisers

7. But focus on lasting customer
relations, not one-time fixes

Formal training for service advisers, whether in-house or outside, should be an ongoing
process. In the meantime, at least make sure
your advisers know how to explain clearly to
service customers what their vehicles need.
"The majority of service advisers we come
into contact with have very little training, if
any," says Don Reed, CEO of DealerPRO
Training in Gahanna, Ohio. "Get the advisers

Service departments need to end their obsession with hours per repair order and sell
continuing relationships with customers instead, says Lee Harkins, CEO of M5 Management Services in Pelham, Ala, a consulting
firm that focuses on fixed operations.
"Let's focus on hitting singles and not home
runs with each customer," Harkins says. "If an
adviser is trained to be a predator and tries to

"Dealerships typically say things like, 'We
have a good working environment, offer high
wages, and have plenty of traffic,' " Harkins
says. "But how are you different?"
Harkins says one of his dealer clients promotes the fact that he will move technicians'
massive toolboxes around for them. Simple,
but effective.
"Don't market what you want - market
what the technician wants," Harkins says.
"You have to be unique."

10. Cut costs, but don't
gut fixed ops
A focus on a dealership's service absorption
rate - the percentage of its total operating expenses that is covered by profits from fixed
operations - puts a lot of pressure on the service department.
That's especially true because the formula
covers many costs that are out of the service
department's control, such as expenses for
the dealership's administrative, sales and F&I
operations, Coker says.
His message to dealers: "The time to start
cutting expenses around the dealership is
now, before you get to the point where you
have to cut in order to stay afloat.
"Don't be cutting expenses that impact customer retention or acquisition," Coker adds,
especially for fixed operations.
"Control your expenses and focus on making
profits in service, parts and collision repair," he
counsels, "with customer pay work and strong
relationship building with customers." 

OCTOBER 2017

PAGE 43

Table of Contents for the Digital Edition of Fixed Ops Journal - October 2017