New car sales across the country have been declining with many dealerships starting to feel the heat from sales departments seeing reduced performance. Fixed operations have become critical and dealerships look for ways to improve returns from their service, parts, and body shops. The fact is, I believe fixed operations are critical in good times and bad times as customers that are well cared for return to purchase their next vehicle from the dealership. Fixed absorption percentage might just be a number on the financial statement that’s never looked at, however, the higher this number is the more bulletproof your dealership is from reliance on sales to make a profit. I consider above 70% fixed absorption a reasonable job, however, the bulletproof dealership is one that consistently doesn’t need the sales department and generates 100%. In no way can the dealership go from marginal or poor performance in fixed operations into the bulletproof condition I describe instantly. However, it is critical that your dealership constantly works on improving fixed absorption. Over the years of coaching one of my greatest feel good events is watching fixed absorption for my clients improve dramatically. There is a special place when the dealer’s son or daughter is transitioning into principle and wants to know more about fixed operations. Dealers or General Managers traditionally come from a sales background and don’t understand much about their fixed operations. All of these desire more knowledge yet don’t make the investment in time or money to accomplish the goal. Some have asked to spend a day or two with me and believe that would give them the information they need that took me over 30 years to learn. Obviously, that’s not reasonable and the best result is to instruct these individuals what reports to monitor and how to improve processes with their team. Team members must be coached on best practice processes with follow up to maximize customer care. Our company doesn’t require contracts and radically jack up prices in parts and service to increase the 35% improvement some consulting firms take from you. We have a long term approach with a reasonable monthly fee that includes at least one day a month in your dealership working with the fixed operations team to improve processes that generate results. There is an incredible joy I have received working with hundreds of dealerships over the last 15 years of coaching. The memories will never leave me and illustrate how good you feel about yourself when you make a real difference in the lives of others. We still don’t have an advertising budget or sales departments, however, never run out of clients. It’s time we chat and discuss ways to make you bulletproof!
Rob Gehring, President
Fixed Performance Inc.
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