It’s so easy for a team to lose points if there isn’t someone keeping an eye on the ball. And it’s easy for a dealership to lose leads and sales if there isn’t a manager position dedicated to growing absorption rates and expanding fixed ops. Okay, that moved from baseball analogy to technical jargon pretty quickly, so let’s take this a step at a time.
Unit sales can vary widely month-to-month, which is why dealers call this part of the business “variable ops”. The uncertainty of unit sales contrasts with customers’ more consistent need for parts and services, which we call “fixed ops”. The reliability of fixed ops makes parts and services the lifeline of most dealerships, and demonstrates why dealers should have a strong focus on absorption rates.
Absorption rates reference the rate that consumers who buy units return to buy parts or to service maintenance and repairs. Absorbing unit-buyers into the rest of your business is important for thriving and maximizing profits. The key to increasing your absorption rates and growing fixed ops is maintaining constant communication with your customer base.
A good manager will focus a great deal of time on training sales and service teams to be customer service-oriented. A major component of this process should be to mine the data within your customer relationship management (CRM) system. For example, effective managers can use this information to schedule alerts to remind their teams to contact customers at fixed intervals in order to bring them back into the dealership for scheduled maintenance and service.
Building and maintaining customer relationships through communication is essential to growing the fixed ops side of a dealership. Frequently, the difference between marginal and high absorption rates, and between smaller and larger overall profit margins, is the quality of relationships the dealer and their team has with their consumers. When hiring your managers, look to those who keep their eye on the ball and remain focused on customer retention through relationship building.
About Ken Taylor: