With new car sales expected to decline and profit margins diminishing, you might be wondering how your dealership can stay profitable in today’s competitive retail automotive market. One way to accomplish this goal is to do everything you can to ensure your fixed ops department is driving profit for your dealership.
Franchised dealerships only receive about 30 percent of vehicle service business performed each year in the U.S. — meaning the other 70 percent of service work is a significant missed opportunity. And any fixed ops business that isn’t serviced by your dealership likely goes to independent and chain auto body shops or other competitors. By focusing on hiring the best fixed ops staff, you can attract new service business, improve the customer experience and increase customer retention. Here are some tips to improve your people strategy and attract quality fixed ops staff:
Build a Strong Employment Brand
Less than 1 percent of today’s job seekers would consider working at a dealership, meaning your dealership needs to put extra effort in place to attract applicants from both inside and outside the retail automotive industry. To more easily attract and hire quality employees in your fixed ops department, develop a strong employment brand to ensure you’re reaching those who are interested in long-term careers at your dealership.
Your employment brand should include a well-defined career path, as many job seekers have the misconception that auto technicians have limited career growth beyond entry-level service roles. By highlighting your dealership’s career path and sharing employee success stories on your career site, you can attract more engaged technician applicants who are interested in careers with your dealership. You can also clearly outline the benefits of working in your dealership’s fixed ops department to get prospective applicants excited about the opportunity. Beyond salary, highlight benefits including time off, 401(k), discounts (on vehicles, service or parts), reimbursements you provide (such as ASE certifications and college courses) professional development (paid training or other certifications employees for employees) and what type of commitment you make to work-life balance.
Partner with Technical Schools
Dealerships across the country face challenges with filling fixed ops roles. Between fewer young job seekers opting for dealership careers and Baby Boomers retiring rapidly, there is a shortage of quality talent on the market. But any time your dealership is short a technician, it leaves a service bay open with nobody there to service customers — causing you to lose more revenue the longer a position is open.
Beyond traditional job boards and posting jobs on your career site, another way to fill high-demand roles such as service technicians is to partner with technical schools. Consider contacting the career services department to see which resources are available to highlight your open roles — including and upcoming career fairs, an internal job database and other resources. If technical schools don’t have any of their own job fairs on the calendar, host one at your dealership and make sure all local technical schools are notified about the event.
Some dealerships have even taken their relationships with technical schools a step further. The Greater New York Automobile Dealers Association has taken this approach by partnering with Lincoln Technical Institute, a network of private, for-profit career training schools. Through the partnership, about 500 students are enrolled in the 13-month auto technology program at the New York institute. And students who receive high grades are offered internships — and eventually, full-time roles — at dealerships, meaning the partnership with Lincoln Technical Institute serves as a built-in recruiter. Other dealerships that adopt a similar approach can secure top talent before they even graduate from technical school.
Encourage Customer Loyalty
Once you build a team of strong employees who will best serve your customers, the next step is to think about how to maximize profitability in your fixed ops department — and one key way to do so is by encouraging customer loyalty. Most dealerships typically retain only about half the customers who buy a new or used vehicle from them or visit their service department with no prior experience with the dealership — meaning customers do not often remain loyal to any given dealership.
To encourage customer loyalty, it’s important to focus on customer satisfaction and convenience. With countless options available for service work, if you don’t give your customers a good reason to return, they’ll likely seek service elsewhere. Think of different ways your dealership can get customers excited about remaining loyal. For example, consider implementing a customer loyalty program so every third or fourth oil change is free. Or send customers personalized marketing emails or snail mail reminders when it’s time for a service appointment — so customers know you care about the health of their individual vehicle and safety of their family.
Other than a loyalty program and personalized marketing, your dealership should ensure doing business with your fixed ops department as convenient as possible. If your dealership traditionally keeps a 9 to 5 schedule, you might want to rethink your hours to schedule appointments outside many customers’ normal work hours. You should also make it simple for customers to schedule, change and check the status of service work. Some ways to do this include supporting online and mobile scheduling and confirming appointments via email or text.
Your fixed ops department has the potential to be a major profit center for your dealership — and employees are your dealership’s main source of competitive advantage. By putting a great team in place, you can ensure your dealership secures more fixed ops business and remains successful in the event of a vehicle sales decline.
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