You learn a lot about yourself in the service drive. You quickly find out if you’re truly an extrovert or an introvert-in-disguise, you discover if you’re as hardworking as you think or if you’re lazy, and it takes no time at all to discover your motivations. As a service advisor, I believed I was going to make a difference; that I would be the one that worked with integrity (contrary to what I witnessed from others).

But very soon after starting the role of service advisor, I found my true motivator. One thing kept me in the service drive for years, and it was the paycheck.

Since I don’t think I’m a unique case, it’s safe to assume that getting a fat paycheck is a motivator for most service advisors, if not all. According to the Harvard Business Review, it’s competitive compensation that motivates 66 percent of the employees. I guess it isn’t rocket science that being financially rewarded for a job well done is what motivates most, especially for positions like service advisors that need a sales mentality.

But here’s a sobering statistic in stark contrast, and from the same HBR study. One in five high performing employees plans to leave their job in the next six months. For a medium to large service department with five service advisors, that means you should expect you’ll need to hire two service advisors per year.

The Cost of Turnover

We’ve talked about the cost of turnover on DrivingSales frequently. The true cost is hard to pin down but it’s at least $30,000 and up to $70,000 per employee. Yes, it sounds extreme but it’s true. Between unproductive training time and lost sales, it makes sense. So, looking at conservative numbers, the cost to replace two dissatisfied service advisors per year is $60,000 – probably more!

What You Should Do About It

If it sounds ridiculous to waste $60,000 and up on turnover for service advisors annually, that’s because it is. But you can do something about it, and it boils down to paying the position what it’s worth.

Service advisors perform one of the hardest roles in a dealership, dealing with angry and jaded customers, teaching customers about proper vehicle maintenance, training themselves in effective sales strategies, and often in a highly competitive, commission-based environment.

There’s one good way to keep them satisfied in their chosen career so they aren’t looking for greener pastures. Offer a pay plan that keeps their eyes in-house. It’s not as simple as adding a bonus to a paycheck – it has to be a reward for a job well done. Here are a few ideas.

• Change from a monthly commission structure to a rolling three-month commission structure. If it’s possible to eliminate droughts on the paycheck, you’ll have happier advisors, even if the peaks aren’t quite as high.
• Offer long-term CSI bonuses using achievable targets, not the lofty ones the OEMs set. This helps keep high customer service at the forefront.
• Provide opportunities for spontaneous earnings in the form of spiffs. They’re a challenge that can kick the achiever into high gear, especially when it seems to be a slow time in the store.
• Or, opt to simply add to the base pay or tack an extra few points to the commission structure. That works too.

The Worst Thing You Can Do

If your service advisors are consistently hitting their bonus levels and their paychecks seem inordinately high, DO NOT CHANGE THE MINIMUM REQUIREMENTS! More than once in my career, after figuring out how to do my job well, the pay structure was changed. At one point, it was twice in one year because our store was at the top of our game. The minimums were upped. All it does is make it harder to take home a decent paycheck and tick off your advisors. That’s why a service advisor will look to leave their job – they can’t trust their pay structure will stay the same when they’re doing well.

If you’ve never been a service advisor or it’s been a long time since you’ve done it, hang out in the service drive for a while. See what they do, day in and day out. It’s a career deserving of great rewards. Make sure your advisors know they are appreciated where they’ll feel it the most – on their paychecks.  

December is in full swing, hopefully off to a strong start. In the blink of an eye, it’s going to be New Year’s, and a blank slate will be in front of you for 2019. A fresh start can be exactly what you need if 2018 wasn’t very kind to you in the service department. Or, it can be daunting if you’re expected to do more than you did in the past twelve months.

Yet, looking at the news, it appears that the automotive sales could take another blow. GM plant closures, slumping passenger car sales, and disappearing sales incentives could put a damper on car sales in the United States. It appears that, once again, there’s a reason it’s called fixed ops: you’ll be relied upon to carry your dealership through 2019.

What can your service department do differently or better in the new year? When you flip pages on the calendar, so to speak, how can you start 2019 strong to buoy your store and see stronger results than this year? Here are three ideas.

Expand Your Target Market

There’s a radius around your dealership where your customers come from primarily. Depending on your location, that could be five miles, ten miles, or even 20 miles or more. All your marketing is targeted at these people, but what about those who are just outside that radius?

Set up digital marketing campaigns that stretch your target market by just a little. Perhaps it’s an extra mile or two in all directions, maybe it’s a bit more. If your in-store strategy is working well already, all you need to do is add a few more customers to grow your service department’s earnings.

Analyze your Pricing Strategy

Compare your service department’s menu item pricing with other dealerships and independents nearby. You’re looking for two things: menu items that are over-priced and those that are under-priced. For over-priced items, the objective is obviously to lower them enough to be competitive, attracting more customers for that service. For items that you’re charging less than average, it’s time to bump up the pricing. Remember, you don’t have to be the lowest price on the block. You just need to service the customer’s vehicle better than the rest.

Emphasize Exploratory Services

There are certain service items that could and should be used better by many service departments. There are often undiscovered issues on a customer’s vehicle simply because their service visit did not explore that far. For that reason, encourage your team to emphasize services that look deeper into a customer’s vehicle than just basic maintenance. It’s multi-point inspections, wheel alignments, and even the service drive walkaround that do the trick.

I hate to use the word upselling – it sounds derogatory, like you’re selling something that’s not necessary. What you’re doing is helping the customer keep their vehicle in top shape by tackling issues before they become a problem. These are necessary services and repairs that the customer simply needs to be aware of. And once they are, it’s an opportunity to capture the business from them today or in the near future.

The new year is rolling around very soon, and these strategies are nothing new and groundbreaking. They’re just solid, everyday tools you can use to optimize your dealership’s service department performance. And if there are dips in car sales like the analysts predict, it’s going to be more important than ever to employ these tools.

“Do something you LOVE.”

“Find a career that fulfills you.”

Our culture today impresses upon students that they can do whatever they set their mind to. And better yet, you can do what you love for a career. Then you graduate high school and attempt to get into the workforce, and everything changes.

Suddenly, you discover that only the ultra-elite DJs ever make it as a career, and it’s a brutally harsh work environment in nightclubs. Playing video games isn’t something you can rely on for consistent income, even if you’re winning tournaments. And fixing up cars in your garage at home does not equate to a passion for automotive service.

Learning a Life Lesson

My father has been a tradesperson his whole adult life, starting after he ‘graduated’ grade 10. As a machinist, he’s a specialist in his field and one of a very, very few who can perform a certain process on the jobsite. And for nearly 40 years, my dad has more or less done the same high-quality work with his beat-up, cut-up hands, day in and day out.

What he won’t tell you is that he loves being a machinist. Sure, he’s incredibly mechanically-minded and can fix pretty much anything. But for Pops, it’s a career. It’s not a passion.

Growing up, that’s taught me an invaluable life lesson. It’s great to find joy in what you do as a career, but only a miniscule part of the population will find employment in a field that they love. For most people, work is WORK.

Think about all the jobs and trades out there that have to be done, and they aren’t glamorous. Garbage collectors, meat processors, ‘water management’ experts, remedial plumbers – there are plenty of people who do dirty jobs you’d never want to touch.

There are going to be times that you just aren’t ‘feeling it’. You aren’t enjoying your career and dread starting your day. Whether you’re writing work orders at the service desk, diagnosing a Check Engine light in the back shop, or leading a service team, there absolutely will be days that feel like hard work.

What to Do About It

It’s normal to have days, weeks, or even longer that your career doesn’t feel satisfying or enjoyable. You don’t have to apologize for it. From more than 15 years in the automotive service industry, I can say firsthand that it can be downright exhausting at times.

Since most of us have bills to pay and mouths to feed, NOT working isn’t an option. There’s a reason we say “going to work”, and not “going to play”.

Keep Going

Want to know why I work? It’s because I love to hunt, fish, ice fish, enjoy the outdoors, volunteer, and spend time with people that I enjoy. I put my automotive knowledge to use so that I can fund all of the things in life that bring me joy.

Sometimes, a job or career just isn’t a good fit, or there’s opportunity to explore different career options. But for the vast majority, the same job dissatisfaction will rear its ugly head at the new post you accept, sooner or later.

Instead of seeking your fulfilment and joy in your career, there will be times you need to focus on the end result – serving customers, co-workers, and managers to the best of your ability so you’re able to do the things in life that bring you joy.

For when times are going really well at your job, use the opportunity to thrive. And when times aren’t going so great, just keep going, focusing on why you work in the first place.

A look back on the past eleven months is going to put you in one of three categories.

• You’re right on pace to finish 2018 on target, and you’re breathing a sigh of relief.
• You’re behind, a little or a lot, and panic is setting in.
• You’re ahead of your 2018 target with a full month to go. You’re full of confidence.

There’s no coasting to the finish line. But as you’re building targets and goals for the coming year, there’s no easy way to plan milestones and goals. It seems like whatever number you pick is arbitrary, doesn’t it?

The Same Target Won’t Cut It

And here’s the thing: whether you’re finishing ahead of target, behind target, or hit a bullseye this year, you can’t use the same goals as you did this year. Certainly, you can’t trim back on your figures either. There’s a dealer principal and a general manager that will scrutinize your budget and make no mistake. They expect growth.

That goes for everyone, whether it’s a service manager, sales manager, parts department manager, or otherwise. You’re meant to improve upon the previous year. And to be blunt, if you’re a department manager and you aren’t striving to blow last year’s numbers out of the water, are you the right person for the job?

You should always be looking to do more. You’re managing someone else’s money. It reminds me of a parable in the Good Book, the Parable of the Talents. A master entrusts his money to three of his servants while he’s away. While two invest the master’s money and grow it, one simply hides it to keep it safe. When the master returns, he is incredibly displeased with the servant who didn’t increase his earnings.

The same is true for dealership management. As a manager, you’re a caretaker or middleman for someone else’s cash; their source of income. It’s job to grow this revenue stream from year to year. But what’s a reasonable goal?

From the Eyes of an Employee

As a service advisor, I was never very happy to learn about the new year’s targets. That’s especially true for years that were so good, it was an anomaly. I recall one year where the service department alone experienced between 7 and 8 percent NET above target, and on a predicted 3-percent growth. That’s a double-digit increase year over year. And when the new targets were unveiled, there was another 3 percent or so expected the following year.

The flip side are years that were less than stellar. When you don’t meet your expectations and the following year still predicts growth, it can cause frustration – a rift between management and employees for setting unrealistic targets.

In an employee’s eyes, there need to be two things before the new targets are revealed. Managers should first address the year’s successes or shortcomings with the team. A dinner reward or small token of appreciation over the holidays does the trick. And secondly, there should be a plan in place for how to achieve the expected growth. A real, honest strategy on how it’s going to happen.

So, How Much Do You Project for Growth?

I'd suggest a good rule of thumb is three percent. Unless there’s a significant reason that it can’t be done, or if there’s a reason that you’re going to do more than that, plan for a three percent increase. If you’ve met your target in 2018 or came in under, that’s three percent more than your 2018 target. If you exceeded your targets in 2018, that’s three percent more than your actuals.

And that’s when the tough stuff really starts. Now you have to strategize for growth and put your plan into action. You’re the right person for the job, aren’t you? Then you’ll find a way to get it done.

Inevitably, the service department in December is a frustrating enigma. It’s next to impossible to predict the ebbs and flows, the staffing schedule over the holidays, and how the weather is going to play out. It would be easy to just play it by ear, writing off any sort of strategy, but that’s not exactly a recipe for success.

You could dump major resources into marketing the final month of the year. But that could prove challenging to justify for a month that’s typically less than stellar. Also, it’s tough to judge how well marketing performed in a time period so disrupted by holidays. Lets’ face it – December 24th, 25th, and 26th is a Monday-Tuesday-Wednesday, and New Year’s Eve is the following Monday. You’re really just working or the first few weeks of the month.

Instead of just winging it for the month of December, strap your team in for a wild ride to year end. Be intentional and implement a bold strategy on a shoestring budget (relatively speaking) to keep the shop full throughout the month.

Go Mobile

We’re talking a broad picture here. Whether you do your marketing in-house or farm it out, cast a net with a mobile marketing strategy. Snap up keywords related to services and repairs with ‘near me’ or ‘in YOUR CITY’ and pump a bit of money into it.

Think with Google has a Shopping Insights tool to help you figure out what’s important to people in your area. Pick rather specific services and products to advertise to keep the budget small yet effective in the mobile market.

Push Notification Blast

Have an app for your store? Good – use it. This will cost you next to nothing to use for your service marketing strategy. Send out an offer to your current customers for either a minimal holiday-time discount on a service with high profit margin, or a giveaway works too. Whatever you do, DON’T stack a discount on top of a loss leader like an oil change. You’ll have customers take advantage of the deal with no chance to upsell.

One tip about push notifications: don’t overdo it. Keep them infrequent so customers don’t gloss over as soon as they see them. You want to keep them fresh.

Offer Referral Bonuses on Seasonal Services!

For a few bucks per RO, you can KILL IT this December by offering referral bonuses to your staff. Pay the people you work with for bringing in their family, their friends, their acquaintances, their kid’s softball coach’s grandmother – anyone and everyone.

Set the criteria, and I suggest rather liberally, but make it on seasonal services. Choose items like cooling system flushes and winter tire packages. Pay your people either a flat rate per RO for these referred customers, an extra spiff if they’re first-time customers, and an opportunity to level up if it’s more than a threshold you’ve set (like $500).

Honestly, it’s probably the best advertising your money can buy. Sure, it’s going to be a challenge to get the GM or DP to sign off on it (because why wouldn’t your staff already do this?) but it’s going to be extremely rewarding if December is shaping up to be quiet.

A side bonus: you keep your staff happy when the service department is hopping. For advisors, technicians, and even managers, there’s nothing worse than going to work when you know you’re not making money but have to be there anyway. If there’s money to be made, it makes working during the holiday season palatable and maybe even enjoyable.

Everyone is talking about KPIs and measuring the past ten months to plan for the next calendar year. It’s critical stuff. A dealership would struggle to exist without proficient service and parts departments. At the end of the day, month, or year, it usually boils down to the bottom line. How much did the service department or parts department earn for the store?

To that end, the service and parts departments make conscious investments throughout the year. A bonus spiff here, a service drive facelift there, new parts bins or shelving, a new wheel alignment machine in the shop, and maybe even expanding for a few more bays. It’s a calculated investment, all with the intention to grow production and profits, ultimately achieving the committed target on the DOC.

It would be crazy to argue against this type of return on investment. It’s necessary, no doubt. But in the service department, is there a more important measurement to determine if money has been well spent?

It’s the People

Don’t think I’m getting all schmaltzy on you here. But the foundation of the fixed operations departments has been, is, and always will be the people. Staff and customers.

Investing in Staff

If you’re keeping track of the department’s productivity, you should also be keeping track of individual performance. It takes on several forms. For service personnel specifically, it would be stats like hours per RO, effective labor rate, dollars per RO, and so on. Figures can include CSI scores as well.

But here’s where it gets a little crazy, and it takes some mathematics. Determine exactly how much money your store spent in training costs for each team member. That includes off-site training, online courses, even team-building exercises.

Now, compare last year’s performance with this year’s performance to date. Are you seeing an increase in the KPIs you’ve determined are most important? I’d bet a few Benjamins you’ll see proportional growth to the money you’ve invested across each of your team members. That’s the ROI I think should be tracked more frequently.

Fixed operations training has been getting more attention than ever, but it’s still lagging behind the sales department. I’d challenge you to invest more in your staff training for the next calendar year, calculate the ROI, and tell your GMs and DPs about the success you see.

Invest in Customers

It might be just an average parts department or service department. But when customers enter the picture, they get a first impression on every visit. It isn’t just getting their car serviced – it’s an experience.

Invest in the customer experience for the service and parts departments. That can seem nebulous or daunting, but all you have to do is put yourself in the customer’s shoes. What would you want when you visit the dealership?

Make the customer lounge an inviting experience, not just couches and stale coffee. Use TV services like Spectrio that incorporate digital messages about your services and repairs, and the benefits of choosing OEM accessories. Provide free Wi-Fi, work stations, complimentary shuttles and loaners, and even iPads for Netflix or web browsing while they wait.

Some dealerships do this stuff already, and that’s great. It isn’t a stretch to expect that the better the customer’s experience, the more they’re willing to open their wallet. And does it factor into better CSI scores? I’ll bet it does. Again, you can measure your investment in specific customer experience items against financial growth easily enough.

Last year, I was shown around a local dealership by the dealer principal, someone I had worked for elsewhere in my past. He walked me through the parts department with a passing mention of massive monthly tire sales volume, straight to a small office hidden deep in the bowels of the store. We didn’t see the showroom or the service department, and we didn’t cross the street to their collision center either. We bee-lined to his pride and joy, the BDC.

It’s here that he spent nearly all our short time together, boasting about their incredible successes among the five-person team. They’re committed to answering every call, sending video messages to interested buyers in the vehicle they’ve inquired about, maintaining customer relationships, and setting sales appointments that comprise approximately 90 percent of their sales traffic.

It was obviously a source of great pride as he turned this tradition dealer with a limited physical footprint into a huge success story, all on the backs of a tiny BDC.

But as someone with a fixed ops background, there’s a nagging feeling that their service department remains forty years behind the times.

How Can a BDC Benefit the Service Department?

When I was a service advisor, I was expected to make all my own calls – and half the time, I did. Every call was supposed to be answered by the second ring – and when I wasn’t with a customer, that’s what I did. Follow-up was the service advisor’s responsibility for the most part.

What I can tell you first-hand is this: countless, innumerable phone calls went unanswered on a busy day. Not just me, but across the five service advisors on the front line. A little support would’ve gone a long way.

What I can be certain of is that dozens, hundreds, or thousands of those calls that weren’t answered in a timely fashion were from potential new customers, or customers who defected because we couldn’t be reached. There’s no way to break down the cost per missed opportunity here, but there’s no question it would be much, much more than the cost of implementing a BDC.

Answering Calls

Depending who you ask, anywhere from one-third to two-thirds of dealership calls are for the service and parts departments. For busy service staff, it’s a nightmare trying to stay on top of phone calls while serving customers in person. A BDC, most obviously, can be used very well to answer calls and alleviate constant phone ringing.

Setting Appointments

A central source for appointment-setting can give advisors a sigh of relief. Some customer just naturally want to talk to their advisor personally, or have additional questions about their vehicle, and that’s fine. But taking the majority of appointment calls and putting them in the hands of call center professionals isn’t lazy – it’s good business. Proper time can be spent advising on the vehicle requirements for the current mileage and time without the pressure of a customer across the desk.

Dealing with the Minutia

The follow-up calls, diverting calls for “is my car ready yet”, and funneling incorrectly-transferred calls to other departments is minor but necessary. In the BDC, these calls are normal, everyday business, freeing up valuable time for service advisors.

But one thing a service advisor must do on their own is properly advise customers about their vehicle while it’s in the shop. An idea from the BDC I mentioned earlier is ideal, and advisors may have the time to do it if a service BDC is working well. Advisors should be equipped to send quick video messages from a customer’s car about the cause and correction for their concerns. Just a 20-second video clip sent by cell phone to the customer where they can see what’s needed as if they were there in person.

So, it’s now not just about time management and catching calls from customers that would be lost otherwise. It’s about creating space for advisors to do their jobs really well. If that’s not the trifecta to use your BDC for the service department in the same capacity as the sales department, I don’t know what is.

Every conference, webinar, training session, and manager’s meeting you’ll be a part of focuses on the business side of a car dealership. There’s absolutely no doubt that profit and loss statements, the DOC, and all the reporting you do are crucial for a profitable, smooth-running service department. Otherwise, how do you measure your progress throughout the calendar year?

This time ‘round, we aren’t going to worry about setting financial goals. That’s going to be driven home on a consistent basis – so much so that you’ll have nightmares about numbers in the next month or two. Instead, let’s focus on setting some new goals for 2019. Goals you probably don’t measure in a traditional way. Goals that work on one of the most important sides of the industry: relationships.

Set Employee Retention Goals

Alright, so this one you can track with actual data. Year over year, you can determine your service department’s employee churn rate easily enough. It’s no secret that every new hire costs more than $50,000 on average in training and lost sales, but that’s the WHY and not the HOW.

Employee retention is all about relationships. A team member that feels connected and valued isn’t going anywhere unless they’re moving physical addresses at home. My suggestion is to track segments of the service department separately to help understand where there’s a need for improvement.

 Determine your employee churn rate over the past year, then set a goal to improve it by 10 percent. It’s achievable if you’re seeking to improve relationships in the service department.

Set Customer Satisfaction Goals

Whether you’re a service manager, service advisor, fixed ops manager, or dealer principal, you have a responsibility to ensure customer satisfaction. That certainly doesn’t mean the customer is always right, because we all know that’s malarkey. But it does mean interacting with a customer in a way that demonstrates moral character and servanthood.

It can come as a goal to personally greet five customers per day and strike up a short conversation. It may be demonstrated by working in the trenches, assisting valets and writing work orders when the service drive is overflowing. Trust me – customers notice when management is hands-on, and they appreciate it. And when there’s a dispute, the customer wants to be heard and understood more than offered a resolution.

Set Personal Growth Goals

Here’s one I struggle with daily: a personal growth strategy. Yet, I understand and agree there’s a need for it. To show you’re not satisfied with status quo, do one thing every day to make yourself better.

Read a chapter or a few pages of a management book. Spend 30 minutes at the gym before work. Ask a coworker if there’s something you can help with. Mentor a junior team member. Pray daily in your car on the way to work.

If you want to track your progress on a calendar, do it. Don’t beat yourself up for days you miss. Just get back on track today, not tomorrow.

Wondering how personal growth affects relationships? Here’s one thing you’ll quickly learn: focusing on yourself dramatically improves your ability to focus outwardly. When you feel good about yourself, physically, emotionally, and spiritually, you’ll be better equipped in your day to serve others and be attentive to their needs.

Well into the last quarter of 2018, most service managers are looking at the DOC and wondering if they’re going to achieve their target. And if not, how much of a shortfall will it be? All year long, you’ve been staring at the same goals and tweaking your methods to be at or over that magic number. So, what do you do if it doesn’t look like you’re going to hit it? And what do you do if you’re exceeding your goals?

Don’t Focus on the Fourth Quarter

I expect to take some flack for this stance. But think about it this way: if you haven’t been able to reach your monthly targets to this point and you’re looking at missing your annual target, do you think you’ll be able to affect enough change in the next ten weeks or so to catch up?

I don’t mean to sound like a Negative Nancy – just being realistic. And to be clear, I’m not implying that you just ride out the last quarter so you can start with a clean slate in 2019. No, it’s actually the opposite. You’re going to get down to work. Hard work.

On the other side of the coin, what do you do if you’ve surpassed your targets? One thing that’s guaranteed is that the GM and Dealer Principal are

Evaluate Your Targets

Look back at the year to date, month by month, and look for reasons why your numbers are what they are. Determine if it’s one month that’s thrown off your year so far, or if you’re missing targets time after time. If your store is doing well, the same action is required. See if there’s an anomaly that accounts for your success, or if your team’s just killing it overall.

Here’s the point: you need to know WHY your numbers are what they are. Good or bad, you need to understand what’s going on before you can move forward.

Find the Weak Spot

There’s a chink in the armor somewhere. It doesn’t matter how big or small your store is, nor if you’ve been hitting your sales and CSI targets. There is something that can be improved. Perhaps you have a service advisor whose hours per RO are below the rest, or you have a technician or two that don’t produce hours up to your expectations. Find the weak spot.

Plan for Next Year

It’s about training, coaching, and ramping up. January will be here before you know it, and it’s a fallacy if you think you can flip a switch to start strong in the new year. Don’t focus on the new year – focus on starting 2019 off right, right now.

Encourage Training

I’m of the opinion that product training is mandatory but personal improvement is a choice. With personal improvement types of training, provide access to personal improvement courses and training sessions if they desire. And to start the year off right, why not get as much training done before the busy holiday season kicks off?

Coaching

This is the corrective type of training. Where you’ve identified deficiencies, whether individual or corporately with your team, you should be aiming to straighten them out now. Carve out time for one-on-one sessions if you aren’t doing it already so you can mentor staff to correct behavior and performance issues.

Ramp Up

Forget what October, November, and December sales look like. Your goal is to hit the ground running in the new year, and that’s not easy if you only start the push on January 1st. It looks and feels like desperation if you’re working toward short-term goals. Instead, keep your vision on getting your team productive as you start the new year.

It’s been an up and down ride, folks. What’s happened so far in 2018 has stirred up the automotive industry, from the sales floor to the wash bay. And with it, there have been lessons to learn and information to glean.

Steel Tariffs

In March this year, President Trump announced his intention to levy tariffs against steel and aluminum imports. It caused an uproar in automotive where the effects would be felt on new vehicle pricing, parts manufacturing, and overall demand. In the first five months alone, more than $1.4 billion dollars in revenue was created, but at the potential detriment to the automotive industry. I won’t beat this to death – God knows that’s been done enough already.

But what did steel and aluminum tariffs teach the automotive industry? Once again, this adversity proved how resilient retail automotive is, even through uncertainty.

NAFTA Negotiations

Like steel tariffs, potential auto tariffs have been dangled over NAFTA countries’ heads, like an ax waiting to fall. It’s the uncertainty that’s generated in the NAFTA negotiations that make manufacturers and customers wonder alike: will tariffs decrease consumer demand, raise vehicle prices substantially, or both?

We’ve come through NAFTA talks – now USMCA – a little worse for wear, but in better shape than expected by many. With barely any effect on the automotive landscape, the industry keeps on trucking.

Tesla Woes

The spotlight has been on Elon Musk for years now, trying to turn Tesla into a profitable electric car company. That may happen yet someday, but Tesla production lines struggled mightily to achieve their weekly targets until recently.

What we see from the Tesla situation is evidence of customer loyalty. It demonstrates that car buyers are less likely than ever, on average, to buy a car on a whim. They’ll even pay a deposit and wait more than a year if it’s a product they believe in.

Electric Car Announcements

Aside from Tesla, 2018 started out with buzz about electric cars becoming mainstream in the coming years. While manufacturers like Volvo, Volkswagen, Jaguar, Lucid, Chevrolet, and Toyota are committed to developing electric vehicles for the everyday driver, very few have been produced for the masses. Instead, EVs continue to be premium models targeting the elite.

Slow adoption is partially the fault of the carmakers, but it also shows that car buyers are less willing to adopt new technology quickly. The concept and benefits may be intriguing and attractive, but car buyers are more conservative than they say they are.

There’s Still Only One Sure Thing in Retail Automotive

So far, 2018 has seen an uptick in dealers and manufacturers who see the important role fixed ops plays in everyday automotive retail life. Variables that affect car sales and the uncertainty of a volatile US economy drive home why fixed operations need to be a focus.

It’s all but guaranteed that every morning, at dealerships across the nation, customers line up their cars for service appointments. These customers are an opportunity to increase loyalty and drive repeat sales. But ultimately, it’s the profit the fixed operations departments generate that keep the dealership’s lights on, the dealership staff paid, and the sales department fueled with buyers.

While the variable operations are sensitive to economic, natural, and political changes, the fixed operations side is much less so. Spend resources – time and money – on fixed operations to keep your dealership competitive and profitable, no matter what’s going on around you.