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Richard Holland

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Fall Conferences Focus on Fixed Ops First Strategy

The fall conferences have ended in our hometown of Las Vegas, NV. As always, there were great speakers and good educational opportunities. It’s always rewarding to see dealers striving to be more knowledgeable; learning how to use technology to increase their ROI. Every year, there are a couple of hot topics that seem to stand out from the rest. This year was no exception.

At the DrivingSales Executive Summit, founder Jared Hamilton’s opening keynote was titled “Fixed Ops First.” It was great to see strategies we’ve been teaching for years embraced by a digital marketing conference. He shared how used car departments have been less profitable since the Internet came around, while fixed operations revenue has doubled. A very interesting statistic he shared was that as manufacturers increase service intervals, dealerships are losing money. In fact, due to these increased intervals, dealerships see $31,977 per day in lost revenue. In 2012, dealerships lost $159,887 because of lengthened service intervals by manufacturers. Jared also shared that by the 6th or 7th service, (roughly 24 months) customer loyalty in fixed ops is about zero. The key takeaway is that dealers should take a fixed ops first strategy.

Fixed operations has always been a dealer’s “Steady Eddie” as far as revenue is concerned, no matter what sales fluctuations occur. By shifting focus away from sales and towards fixed operations, a dealership can strengthen its steady revenue stream. Sales will always be there, but a dealership that relies purely on sales over service will be in a poorer position when recessions and dips in sales occur. 

The second trend that seemed to build the most buzz was data ownership. Dealers have become increasingly frustrated by DMS companies that charge vendors access fees passed along via higher service costs. In addition, data portability when switching DMS or CRM companies has been an issue.

The third trend was all about the customer experience. Reputation management and loyalty sessions were focused on dealerships providing excellent customer experiences, rather than putting out fires.

We were thrilled at the overwhelming response to EDGE WorldClass from dealers that stopped by our booth at the 15th Digital Dealer Conference & Exposition. Dealers increasingly recognize the intrinsic value and benefits technology can create in fixed operations. Through using technology to deliver a more consistent and thorough vehicle inspection process, dealers are enjoying a better customer experience, increased efficiency and ROI.

Thanks to all of the dealers who stopped by as well as the conferences themselves for once again providing venues for dealers to learn. We look forward to participating in future events and sharing how MPi can assist dealers to increase service revenue and loyalty despite sales trends and manufacturer lengthened service intervals. 

Brian Pasch
I hope the momentum that Jared started at DSES continues into new actions by dealers.

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