Now is the golden era for fixed operations. Automotive dealerships often overlook the fixed ops department in favor of variable operations such as new and used vehicle sales. However, the service, parts, and body shop departments are frequently the leading profit-generators of a dealership. 

In fact, Mercer Capital reported that fixed operations accounted for 50.5% of total dealership gross profit in 2019. Even in years when this share dips due to higher vehicle sales, fixed ops consistently cushion declines in total sales profits. “When variable goes down, fixed sticks around,” says George Karolis, president of The Presidio Group, in his November 2024 interview with WardsAuto. 

To ensure sustainable profitability, many dealerships are taking the long view. According to WardsAuto, as of May 2024, six publicly traded franchised dealer groups have begun investing in service-related business areas. While these investments may have higher upfront costs, they are designed to drive long-term growth in both sales and service revenue. “The service business continues to be a key part of any dealership operation,” says Vanessa Ton, senior manager of market and customer research at Cox Automotive. 

Is your service drive set up to operate at its peak potential? Here are three essential strategies every dealership should implement for fixed operations success:

1. Optimize Your Workflow for Maximum Efficiency

Efficiency is the foundation of a successful service department. Time truly means money here as inefficient workflows slow down repairs, frustrate technicians, and drive away repeat customers. The 2023 Cox Automotive Service Study found that “48% of vehicle owners were frustrated with at least one aspect of their recent service experience at a dealership,” citing two major reasons why, including the service taking longer than expected and struggles with scheduling an appointment. 

Addressing these common pain points is vital to boosting workflow optimization and driving automotive service efficiency. Here’s how:

Evaluate Current Processes and Identify Bottlenecks:

Regularly audit your service processes. Ask questions such as: “Is scheduling causing delays? What aspects of it are problematic? Are the same parts consistently unavailable? Why?” 

To eliminate bottlenecks that slow down daily operations, start by thoroughly understanding what yours are.

Leverage Technology to Streamline Operations:

Use digital tools like scheduling software and real-time service tracking to enhance team coordination. Self-check-in kiosks, for example, are quickly becoming standard in dealerships across the country. According to CBT News, the adoption of self-service kiosks has accelerated since Reynolds and Reynolds, one of the largest providers of dealership management systems, acquired leading kiosk supplier GoMoto in 2020. Major brands such as Ford, Volkswagen, Honda, and Kia piloted these technologies, which increased customer convenience, employee efficiency, and payroll savings, all of which contribute to greater profit margins. 

Standardize Training for Consistent Execution:

Standardized procedures are crucial to ensuring smooth operations across the board that will save you time and money. Certifications for service advisors and technicians such as the ones offered by The National Institute for Automotive Service Excellence (ASE) help ensure consistency in execution from well-trained employees. Tony Molla, former VP of Communications at ASE, presented to Tire Business in 2014 that the ROI of an ASE certification is a 40% increase in employee productivity. Investing in your people is great for empowering better performance.

2. Focus on Customer Satisfaction as a Cornerstone

Customer retention is at the core of service-oriented fixed operations. Satisfied customers are not only more likely to return, they are also your most effective marketers. In fact, Forbes reported that a Bain & Company study reveals a mere 5% boost in customer retention can lead to a profit increase ranging from 25% to 95%. 

Improve Customer Experience:

Customer loyalty is built on trust and satisfaction. Clear communication about repair timelines, costs, and necessary services builds these traits. Model dealerships like Lexus, which has often ranked first in customer experience, have long been operating with a “customer-first” philosophy based on the Japanese concept of omotenashi, focusing on personalized service and proactive updates, anticipating the needs of the customer. 

Leveling up your communications does not have to be complicated and can be as simple as sending text notifications for every service stage. According to J.D. Power’s 2023 U.S. Customer Service Index (CSI) Study, dealerships are already adopting an increased use of text communications over phone calls.

Track Customer Satisfaction:

Feedback is a goldmine for making data-informed decisions. Use tools like Net Promoter Scores (NPS) and customer feedback surveys to clearly identify key areas for improvement. Did customers experience long wait times? Was pricing unclear? A proactive approach to addressing satisfaction gaps shows that you value building long-term relationships, which leads to customer loyalty and repeat business.

3. Monitor Key Performance Metrics to Stay on Track

Clear data empowers your team to focus on areas with the highest impact on your bottom line. Labor efficiency, average repair order value, and technician productivity are key indicators of success.

Track Essential Metrics for Fixed Operations Success:

• Labor Efficiency: Measures the amount your technicians earned for the overall business per hour of labor, rather than the amount billed to customers.  
• Average Repair Order (RO) Value: Tracks how much revenue is generated per service ticket.
• Technician Productivity: Evaluates the percentage of available time technicians spend working on vehicles.

Follow well-researched guidelines shared by trusted organizations like the National Automobile Dealers Association (NADA), such as their “Managing Your Service Department for Profit” White Paper.

Use Data to Drive Improvements:

Benchmark your service center’s performance against industry standards to pinpoint growth opportunities. Best-in-class asset management systems like DSD’s Asset Genius can also track all aspects of your equipments’ performance.

Consider Ford’s use of FORDLiive in its UK markets to offer real-time predictive analytics for its service operations. Through this technology, Ford’s dealerships can identify the required service work prior to the vehicle coming in. Methods like this improve fix rates and wait times, directly increasing customer satisfaction and profitability.

Your Journey to Fixed Ops Excellence Starts Here 

Success in fixed operations is no accident. It requires a proactive, intentional approach to improving efficiency, customer satisfaction, and data-driven management. Dealerships that invest in continuous improvement and leverage technology will outpace competitors and create sustainable profit centers.

DSD brings more than 20 years of industry-defining experience in fixed operations. If you are ready to transform your service department following the above tips and want a trusted partner alongside you on the journey, our team of experts is ready to work together with you to help your dealership thrive.