Why Fixed Ops is Your Revenue Growth Opportunity During the Chip Shortage
Estimated reading time: 4 minutes
If your dealership has a service department, this post is for you.
For most dealerships with service bays, fixed ops makes up more than half of your overall profit,? yet only about one-tenth of your marketing investment and probably about one-fifth of your focus for growth. But between the global chip shortage’s effect on new and used car inventory and prices, and people ready to hit the roads again after being cooped up during COVID-19, the time for fixed ops to shine is right now.
This part of your business has a ton of growth opportunity; it’s a stable, long-term revenue stream for your business … but you need to have a strategy.
Consumers are ready to service their vehicles
More than 9 million service shoppers? have visited KBB.com’s Service & Repair experience this year so far, indicating that people are ready to hit the roads again. This boost in service audience shows us that they’re picking up their regular maintenance routines, acting on open recalls and looking for convenient service centers and service specials in their area. For you, this means your potential addressable market is bigger than ever, too. Get people into your service bays now and capitalize on long-term profitability.
Bring your service online
Our industry is still in the throes of a digital revolution, and you can give your service department a competitive advantage by jumping in feet first. Consumers are doing more online than ever — with the expectation that online options are available for all their needs. Much like digital retailing was 5-10 years ago, researching and comparing automotive service providers, seamless online service scheduling, service pick-up delivery, along with fair and transparent repair pricing are “nice to have” differentiators … for now. COVID-19 has only accelerated consumer demand for an efficient digital process for servicing vehicles, so without these tools, you’ll soon be left behind.
There’s no going back now. So, when it comes to your service marketing strategy:
- Make sure your website, Google My Business and social media pages are up to date with any new or extended service hours.
- Be hyper-specific with your advertising and target big ticket items like brakes, tires, battery engine work through paid search and paid social campaigns.
- Promote service pick-up and delivery or mobile service offerings throughout your marketing channels.
- Increase your reach by tapping into the right digital marketplaces offering service listings, like KBB.com’s Service & Repair Guide.
As I wrote in a previous blog post about fixed ops market share, if your sales messaging and strategy is all about speed, convenience, transparency and value, make sure you’re creating the same experience with your service department.
Go the extra mile to get customers in your service bay
It’s not about a single oil change, it’s about the lifetime value potential of every customer, whether they’re walking in your door or you’re going to their doorstep for pick-up and drop-off. While new inventory is tight and used car prices are high, people may delay a purchase and focus instead on maintaining their current vehicle. They might also be ready to trade in their current vehicle, so make sure you’re leveraging your service bays to acquire new inventory with incentives like Instant Cash Offer.
Gain market share now and retain that profitability for the future by opening an extra shift, adding more techs and extending business hours. There’s a pent-up demand for service right now, as summer is here and customers are hitting the road. 33%? of people say they’ll put more miles on their car in 2021 than before the pandemic, and we’re seeing the lowest delay in service figures since early 2020.
Meet your customers where they are
The toothpaste is out of the tube when it comes to customer expectations both online and in-person; they want convenience, transparency and a positive experience. Fixed ops is your growth opportunity, so make sure you’re out there for consumers and you’re building strong relationships. Because when they’re ready to buy again, they’ll be coming to you first.