How to Prioritize the Customer: Fixed Ops Edition
As automotive retail continues to evolve, it is expected that visionary dealers will become hyper-focused on delivering a more convenient customer experience across all aspects of the customer journey. Alternative options like Amazon's mobile mechanics program and independent shops will continue to shape the competitive landscape and dealers with strategic intent will be able to directly benefit from the opportunities presented to the fixed operations department in 2024.
As we concluded this past year, some of our DMM Experts joined Brandon Barnett on the Multi-Point Inspection Podcast, to discuss the trends and cast their predictions for the year ahead.
The Central Theme: Unlimited Opportunities in Fixed Operations
Owen Moon, Sarah Vantine, Laurie Halter, and Tom Kline point out that the fixed operations department is teeming with prospects in 2024.
The influences behind these opportunities stem from ongoing developments in the automotive industry, coupled with global consumer trends and prevailing economic conditions. Overall, the opportunity to drive more revenue into the service bay by increasing offerings to accommodate late ownership services, paired with creating an enhanced customer experience, is key, as we launch into a more competitive market.
The Methodology: People, Processes and Partnerships
Some of the opportunities available to the fixed operations department can be achieved by focusing on three core areas: people, processes, and partnerships.
“Weaving all the threads together and creating cross-departmental collaboration will create a singular customer experience.”
Sarah, VP of Solutions at Quantum5, shares that one of the most important indicators of performance and profitability within the fixed ops department is the ability to provide a cohesive customer experience, to connect the dots, between the different functional areas. The importance of understanding the base skill set across all departments will greatly impact the performance of the team, as they become mindful of the different components within the process that are directly driving the customer journey.
“Dealerships that can embrace different profit centers can really take advantage”
According to Owen Moon, Co-Founder of FIXED OPS DIGITAL (recently acquired by Trade Pending), late ownership services are becoming increasingly necessary with vehicles pushing up to 13 years on the road. “It's a customer pay opportunity. They're higher repairs, so they're higher margins but the challenge is that some dealerships are not yet set up for that.” There is a heavy emphasis placed on the need for processes. If dealerships can implement processes that can include late ownership repairs, there is a great opportunity to increase revenue. Processes and people go hand in hand, “we need to ensure that, as we expand our offering in the service bay, training is prioritized.”
Creating and implementing training and development initiatives that remove friction and breakdown silos will directly improve the service experience. “Each department encountered by the customer ultimately drives retention, keeping that customer invested with your advisors and with your rooftop,” says Sarah. One of the most important ways to achieve this unity within the fixed ops department is to remove internal communication barriers and bottlenecks. The capacity to deliver on your commitment is key.
Some of the opportunities for the fixed ops department require careful assessment from a capacity standpoint, says Owen. “During the pandemic, we had created and deployed a little over 500 pickup and delivery pages that we put on our dealership websites because everyone panicked. Within a month, we were asked to remove around 60% of them.” Many of these issues arise from a lack of infrastructure or logistical issues.
When it comes to the customer experience, convenience is king. Understanding and managing capacity may be the foundation, but as Laurie Halter, Founder of Charisma! Communications highlights, there is power in smart partnerships. AI continues to make an impact on automotive. TraverConnect has created mobile pickup and delivery services to support dealerships in providing competitive, customer-centric solutions. Removing the friction that sometimes arises through the necessity of communicating with the service department directly, “the customer can access updates via an app, similar to Domino's” is also an area which a select few in our industry are trailblazing.
“90% of the enforcement actions start with upset customers or upset employees.”
Tom Kline, Principal at Better Vantage Point, suggests that alongside training, employment practices and the processes about them require additional thought. As the fixed ops department increases its investment in its people and processes to better serve the customer, it is vital to ensure that any additional services or revised procedures are within the constructs of best practices.
“Dealers are superb entrepreneurs,” at their core, problem-solvers. Tom encourages that, “As you are thinking about some of these innovative solutions, especially regarding a technology-based solution: check with your insurance professional to make sure that whatever you're doing is covered.”
Navigating the Competitive Market
“We should start at the foundations, rethink the express lane and how we're driving normal maintenance type scenarios through the drive.”
According to Owen, the effective management of finance and fixed operations is crucial for dealers to secure their position as an essential part of the industry.
“If we can ensure efficiency, there will always be a place for dealers in the distribution model.”
OEMs are unlikely to go into direct competition with dealerships due to cost factors, but dealerships also have an advantage over direct-to-consumer approaches. Effective communication, personalized service appointments, and overall exceptional experiences if executed correctly, remain at the core of the customer experience.
Regulatory enforcement against deceptive practices by car dealers has increased recently, making it important for dealerships to ensure transparency in advertising and communicating with customers. Tom advises to “shop your own website, shop your own offers.” Identifying and holding dealerships accountable for deceptive practices has been a focus area for the Federal Trade Commission (FTC) which has also partnered with the Consumer Financial Protection Bureau (CFPB) when it comes to enforcement.
Key Steps to Prioritizing the Customer:
- Assess the current state of your fixed operations department by addressing both people and processes. This understanding is crucial for planning a highly profitable year.
- Identify areas in your fixed operations that need intervention and investment. Before boosting appointments or optimizing scheduling, identify bottlenecks and streamline existing workflows.
- Kickstart your strategy by eliminating silos within the department, emphasizing communication, and fostering collaboration across various functional areas.
- Explore partnerships or programs that enhance your capacity to provide outstanding customer service.
You can listen to the full podcast here:
The Multi-Point Inspection Podcast is sponsored by InteliChek, the industry leader in automotive service studies.