Increasing Fixed-Ops ROI at Auto Dealerships

Posted by Insignia Group on Sep 13, 2022 12:27:52 PM

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Parts managers and Service managers face the biggest challenges in increasing profit for services and monitoring the ROI of third-party resources. 

Today, fixed operations are faced with an even more urgent need to increase revenue, while inventory shortages result in unmet needs and plenty of backorders. 

How can a dealership create a successful parts department and a thriving service lane under the current conditions? The answer is simple yet complex. Increasing Profits in the Parts Department

Selling Obsolete Parts Online

Obsolete parts are frustrating. Whether obsolescence happens because of errors, low sales, or abandoned special orders, it’s a thorn in every parts department’s side. There are a few ways to take those lemons and make lemonade, and every parts manager is capable of doing them. 

  • Post your parts for sale online or in a bundle to appeal to customers. 
  • Use Facebook to find groups to offer specialized parts (and connect with other dealership employees out there!).

Create an Online Sales Channel

Do you have parts and accessories that fly off the shelves? Imagine how many more you’d sell if your prospective buyers were nationwide. Opening an online parts and accessories store can skyrocket the inventory you’re moving! Featuring or bundling popular accessories is a great way to boost sales and generate new sales on items that don’t do as well at the point of purchase. You can even offer some fun brand or dealership gear, run promotions, as well as offer coupons and incentives to get local customers to come in. Customers are constantly buying parts and accessories—the only question is, are they buying from you or not?

Increasing Profits in the Service Department

Sales Training in the Service Lane

Chances are that most of your service advisors and technicians don’t consider themselves salespeople. Based on the volume of customer interactions, they should! Service advisors greet more customers and influence their brand loyalty and retention at a higher rate than the sales team. The service lane would hugely benefit as a department, and on the dealership level, from sales training. Phone etiquette is critical. Answering the phone is non-negotiable. If you have to hire someone to take calls, do that! The dealership wouldn’t dream of foregoing a receptionist and letting the phone go to voicemail all day, and, the front of house is seeing fewer people. Ensure that the service department is as skilled in customer service as they are in mechanics. Most dealerships aren’t doing that, so yours is sure to stand out and make an impression! 

Position Yourself as the OEM Expert

It’s a common conception that getting your car serviced at the dealership is expensive. Sometimes that’s true. While other times, dealership service is comparable to the guy down the street. Regardless, perception is reality for your customer, so you have to take a different angle. Market yourself until you’re blue in the face as the OEM expert. Convince your customer that having their vehicle serviced by the OEM authority is the only way to go. Your technicians aren’t general mechanics. They’re brand-specific specialists for the customer’s car. And what does having a brand-specific expert working on your vehicle translate to? Better performance, longevity, confidence, and trust! 

Smart Software Choices 

Take a mental inventory of how many different kinds of software are used in fixed 

operations. It’s time to go through each one to evaluate ROI. To calculate your ROI, use the same formula for every platform. 

Return (or gain) - Cost of Investment (monthly or upfront fee) ÷ Cost of Investment = ROI

You can also calculate based on the time the ROI software saves you. There are simply too many options available to dealerships for you to waste money on software that doesn’t deliver. 

Every dealership should invest in a digital retailing software for a successful fixed operations department that sells accessories. Digital retailing is the future of the automotive industry and a massive piece of the pie currently. Retailers like CarNow, Clicklane, Gubagoo, Roadster, and Upstart integrate with other software to make your workflow easier and your profits higher

About Insignia Group

Insignia Group has been helping dealerships increase their revenue and improve their back-end ROI since 2001. When choosing software to improve the operations of parts, sales, and service, your store won’t find any better! We work with your digital retailers, DMS, and other software vendors to keep your accessory sales data the same throughout each platform. We have some of the best interactive car configurator visuals. Customers who use our software typically see a 150% ROI with revenue in the first year of using the software—and an increase to 200%+ every year after that.

Is your dealership in need of a revenue boost that makes it easier to sell online and in-store? Get started today!

Topics: Accessories System, profit, parts department