Digital Dealer - February 2020 - 32
S A L E S & VA R I A B L E O P S
Fixed Operations
By
Charlie Polston
Automotive Customer Retention
& Profitability Consultant,
BG Products, Inc.
Follow the Money Trail...
Straight to the Service Dept.
>
Fixed operations earns 747%
higher gross margins than new vehicles, according to Ryan Kerrigan,
managing director of Kerrigan Associates. When you combine fixed
ops gross margins with used car gross
margins (which are only 109% higher than
new vehicle gross margins), together they
account for a whopping 75.9% of dealership gross profit.
Kerrigan, citing data from NADA in an
article published last fall in Dealer Magazine, said fixed ops gross was projected to
increase 5.5% in 2019 - and it has grown
every year for the past five years.
With an MBA from Stanford University, a master's degree from Georgetown
University, and a bachelor's degree from
Notre Dame - and previously serving as
the general manager of his family's automotive dealership - it is an understatement to say that Kerrigan is a respected
voice in our industry. He knows what he's
talking about.
So when he says, "the fixed operations
business is well-positioned to continue its
current growth rate," everyone needs to
take note. It is so wonderful that the most
profitable departments in your dealership,
service and parts, are the fastest growing
- with no end in sight!
So, what is your business plan to grow
fixed ops; since that's where most of the
money you take to the bank comes from?
Sadly, the business plan for many
service personnel, including management,
goes something like this: "Well, we were
hoping for the best. As long as cars break
down at a higher rate than they did last
year, the department will grow."
How absurd! Fixed ops is first and
foremost a sales organization. A sales
organization does not "hope" its way to
prosperity, it "sells" its way to prosperity.
A question for dealers and general
managers:
Where do you spend your time? How
many hours do you spend each week in
32
[ d i g i t a l d e a l e r. c o m ]
your service department? You lead a new
and used car sales meeting every day;
how often do you lead a service sales
meeting?
When the dealer and general manager play an active role in fixed ops, gross
profit goes way up. It's that simple.
Most dealers and general managers
have laid out a clear expectation for their
new and used car sales personnel. These
folks know how many vehicles they must
sell per month to stay employed. They
know they are expected to have a certain
closing ratio or they can't remain on the
sales team.
Have you given that same kind of clari-
February 2020
http://www.digitaldealer.com
Digital Dealer - February 2020
Table of Contents for the Digital Edition of Digital Dealer - February 2020
Digital Dealer - February 2020
Online Extras
Up to Speed|Tech, Dealer News, & People on the Move
Social Media Insight| Direct From Facebook
Culture Three Key First Quarter Resolutions for 2020
Succession Planning Debunking the Succession “misconceptions”
Digital Retail Embracing Online Selling Offers Advantages Far Beyond the Obvious
Process & Performance Optimizing Your Process for Success: Elevating the Customer Experience Starts Within
Fixed Operations Repair Process 2020: A Very Hot Sema Topic Indeed!
Exclusive Interview With Rhett Ricart of Ricart Automotive Group
Digital Dealer: Featured Sessions
Data & Analytics Website Tools Must Support Google Analytics Tracking
Social Media 10 Dealership Social Media Best Practices for Beginners
Branding 2020: A Brand You Year (And Decade)!
Fixed Operations Follow the Money Trail… Straight to the Service Dept.
Cpo the Great Cpo Disconnect
Sales Training Sales Persistence – When & Why It Matters
Social Seen| Snapshots of the Auto Retail Scene
Digital Dealer - February 2020 - Digital Dealer - February 2020
Digital Dealer - February 2020 - Cover2
Digital Dealer - February 2020 - 1
Digital Dealer - February 2020 - 2
Digital Dealer - February 2020 - 3
Digital Dealer - February 2020 - Online Extras
Digital Dealer - February 2020 - Up to Speed|Tech, Dealer News, & People on the Move
Digital Dealer - February 2020 - Social Media Insight| Direct From Facebook
Digital Dealer - February 2020 - 7
Digital Dealer - February 2020 - Culture Three Key First Quarter Resolutions for 2020
Digital Dealer - February 2020 - 9
Digital Dealer - February 2020 - Succession Planning Debunking the Succession “misconceptions”
Digital Dealer - February 2020 - 11
Digital Dealer - February 2020 - Digital Retail Embracing Online Selling Offers Advantages Far Beyond the Obvious
Digital Dealer - February 2020 - 13
Digital Dealer - February 2020 - 14
Digital Dealer - February 2020 - Process & Performance Optimizing Your Process for Success: Elevating the Customer Experience Starts Within
Digital Dealer - February 2020 - Fixed Operations Repair Process 2020: A Very Hot Sema Topic Indeed!
Digital Dealer - February 2020 - 17
Digital Dealer - February 2020 - Exclusive Interview With Rhett Ricart of Ricart Automotive Group
Digital Dealer - February 2020 - 19
Digital Dealer - February 2020 - 20
Digital Dealer - February 2020 - 21
Digital Dealer - February 2020 - 22
Digital Dealer - February 2020 - 23
Digital Dealer - February 2020 - Digital Dealer: Featured Sessions
Digital Dealer - February 2020 - 25
Digital Dealer - February 2020 - Data & Analytics Website Tools Must Support Google Analytics Tracking
Digital Dealer - February 2020 - 27
Digital Dealer - February 2020 - Social Media 10 Dealership Social Media Best Practices for Beginners
Digital Dealer - February 2020 - 29
Digital Dealer - February 2020 - Branding 2020: A Brand You Year (And Decade)!
Digital Dealer - February 2020 - 31
Digital Dealer - February 2020 - Fixed Operations Follow the Money Trail… Straight to the Service Dept.
Digital Dealer - February 2020 - 33
Digital Dealer - February 2020 - Cpo the Great Cpo Disconnect
Digital Dealer - February 2020 - 35
Digital Dealer - February 2020 - Sales Training Sales Persistence – When & Why It Matters
Digital Dealer - February 2020 - 37
Digital Dealer - February 2020 - Social Seen| Snapshots of the Auto Retail Scene
Digital Dealer - February 2020 - 39
Digital Dealer - February 2020 - 40
Digital Dealer - February 2020 - Cover3
Digital Dealer - February 2020 - Cover4
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