By Sy Stewart, Trainer, BG Products, Inc.
A word from Charlie Polston: “My friends, as you know I retired December 31, 2024 after 42 years in the automotive industry. I’m delighted to introduce you to Sy Stewart. Sy joined my team 13 years ago; and he’s a great trainer, a great fixed ops consultant, and a great customer retention professional. You’ll enjoy his writing style; and following his advice will make you money! I’m delighted to pass the baton to my friend, Sy Stewart.”
In my years working with automotive dealerships, I've noticed a troubling pattern that many in the industry are hesitant to admit: a lopsided focus on car sales while the fixed operations department gets left in the shadows.
During a recent advisor training session at a dealership, I witnessed this imbalance firsthand. This particular dealership, now under its third owner in just five years, scheduled my training session for their service advisors. These are the same advisors that allowed the ship to go down with the last two owners. To say that they needed training would be an understatement. Yet, midway through, I was abruptly asked to move to clear the room for a group of potential car salesman. I felt like Rodney Dangerfield—no respect. This incident highlights the issue—the industry’s skewed emphasis on car sales at the expense of service sales, despite the latter offering significantly higher profit margins.
Typically, dealerships dedicate substantial time and resources to training car salespeople. The initial orientation lasts 1-2 weeks, followed by 2-4 weeks of classroom training, and 4-6 weeks of on-the-job training. Daily sales training sessions are also common. In contrast, service advisors usually receive minimal training, most of which focuses primarily on operating the dealership management system (DMS). Most sales training for service advisors comes from external sources, not in-house.
This imbalance is like planting a garden and watering only the flowers while ignoring the vegetables that actually sustain you. Sure, the flowers look nice and attract attention, but it's the vegetables that feed you and keep you going in the long run.
What do you do with an underperforming car salesperson? How long do you allow this person to remain in the position? Many managers I know say that if someone is still underperforming six months into the job, they either let them go or move them to the service department. Many times these underperformers are put in the service department because they are “nice guys” that managers couldn’t bear to let go. This mindset kills our service departments. Why would we put someone who couldn’t sell a car (especially in today’s market) in a different sales role and expect something to change? This practice is counterproductive, given that car sales typically yield a gross profit of around 3.9 percent for new cars and 15 percent for used cars, compared to the 75 percent we typically see with service sales. This flawed business model neglects the substantial revenue potential of a well-managed service department.
The dealership I mentioned earlier is a prime example of why we need to focus more on fixed ops. Despite changing ownership, the consistent underperformance highlights a need for change. Selling cars alone can only sustain a dealership for so long. The COVID-19 pandemic, which disrupted vehicle supply chains, underscored the importance of a robust service department.
Successful dealerships recognize the intrinsic value of their fixed operations department and seamlessly integrate it into their overall culture. In many of the thriving dealerships I collaborate with, the owner’s involvement in fixed ops meetings is a standard practice. This direct engagement sends a powerful message about the department’s critical role in the dealership’s success.
Customers typically hunt for the lowest price when purchasing a vehicle and may not return for another purchase for several years. However, without a strategic focus on fixed ops, dealerships miss a vital opportunity to build lasting relationships through ongoing service. By emphasizing service sales, dealerships can secure steady revenue and foster customer loyalty.
The successful integration of fixed ops not only enhances profit margins but also improves customer retention. Regular maintenance and service appointments keep customers coming back, creating multiple touchpoints that reinforce the dealership's commitment to their satisfaction and vehicle performance. This long-term approach turns one-time buyers into lifetime customers, ensuring a consistent and profitable service sales channel that supports the dealership’s overall growth.
Currently, training for service advisors is minimal and often outdated, not keeping pace with modern automotive service demands. I recently met with a dealership that had invested thousands of dollars in a consultant, only to receive an outdated service menu in return. This menu included inspections at all mileages but lacked any actual services, highlighting a glaring gap in effective training and practical application.
To improve, dealerships must take a more proactive and comprehensive approach. This starts with educating customers about their high-tech vehicles, which are equipped with advanced features and systems that require specialized knowledge and care. By offering necessary services tailored to these vehicles and consistently asking for the sale, dealerships can enhance customer satisfaction and boost service revenue. These steps may seem simple, but they are often overlooked in the rush to focus on immediate sales targets.
Training for service advisors should be continuous and comprehensive, equipping them with the knowledge and skills needed to excel. Instead, service advisor training primarily focuses on use of the DMS and how to cash the customer out. It barely scratches the surface of what they need to know, leaving them ill-prepared to handle customer inquiries, recommend appropriate services, and build lasting customer relationships.
Effective training should encompass a wide range of topics, from technical knowledge about vehicle systems to customer service best practices and sales techniques. Advisors need to be well-versed in diagnosing issues, explaining necessary repairs, and highlighting the benefits of regular maintenance. Continuous education ensures that advisors stay updated with the latest advancements in automotive technology and service standards, enabling them to provide top-notch service and drive the dealership's success.
By investing in robust training programs, dealerships can transform their service advisors into trusted experts who can guide customers through every step of their vehicle's maintenance journey. This not only improves service department performance but also fosters customer loyalty, turning one-time visitors into lifelong patrons.
Service advisors generally fall into three categories:
1. The Irredeemable: Around 20 percent are the no good, dirty, rotten, scoundrels who give dealerships a bad name. They sell services that customers do not need in order to make a buck. They are the ones selling blinker fluid. These advisors are quickly identified and usually do not last long.
2. The Professionals: About five percent are service sales professionals who educate customers, offer relevant services, and then ask for the sale. They are knowledgeable and the customers trust that they are being well taken care of. These are the advisors every dealership aims to retain.
3. The Friends: Making up about 75 percent, these advisors are every customers best friend. They mean well but often fail to sell necessary services, acting more as glorified cashiers. With proper coaching and accountability, these advisors can be transformed into service sales professionals.
As more people hold onto their vehicles longer, the need for a strong fixed ops department becomes increasingly apparent. The emphasis must come from the top down, with owners and upper management recognizing and prioritizing the service department's value.
Fixed ops rarely changes overnight and requires constant mentoring and coaching. Imagine the outcome of consistent, frequent and ongoing sales training in our service departments (like that received in the front of the dealership). This redirected focus fosters improved customer satisfaction, grows customer retention, and at the end of the day, increased gross profits for the dealership as a whole.
Call Out:
Selling cars alone can only sustain a dealership for so long. Successful dealerships recognize the intrinsic value of fixed operations and the unlimited revenue stream it will produce!
Sy Stewart began his automotive career with BG Products, Inc. 13 years ago training technicians and advisors about the importance of preventive maintenance. As a fixed ops consultant, Sy works with dealers and managers to increase gross through increased CSI, increased retention, and increased maintenance service sales.
