Forward-Thinking Dealerships That Employ Digital Solutions in Their Fixed Operations Experience Higher Service Profitability and Efficiencies

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Jun 22, 2023, 10:00 ET

The recently released Cox Automotive Forward-Thinking Dealership Study reveals most dealers are not as advanced in their digital capabilities for their fixed operations as compared to their variable operations.
Forward-thinking dealers who embrace digital technology and automation within their overall operations have a 64% higher net profit vs. static dealers.
Dealers with the highest profit margins have three characteristics in common in their approach to fixed operations: transparency, optimization, and integration.

ATLANTA, June 22, 2023 /PRNewswire/ -- Forward-thinking dealers, a resilient group of automotive dealers, have implemented the advanced tactics needed to deliver a personalized ownership experience and run a top-notch customer-focused service department. These dealers have seen an average of 28% higher service profit change in the past 12 months and were 42% more efficient according to a recent study by Cox Automotive, The Forward-Thinking Dealership Study.

Cox Automotive surveyed more than 500 dealerships at various stages of implementing future-forward strategies designed to help them overcome future challenges. 158 dealerships responded specifically to how digitization has impacted their service operation. The study uncovered that most dealers aren't as advanced in their digital capabilities for their fixed operations as they are in other aspects of their business. Those achieving success with high-performing service departments share the following traits: transparency, optimization, and integration.

"As the automotive retail experience has evolved, so has the service department experience. Today, and for the foreseeable future, it's all about personalization," said Skyler Chadwick, director of product consulting at Cox Automotive. "Only half of service departments have implemented the advanced tactics needed to deliver a personalized ownership experience, but dealerships that do this – and are willing to innovate and invest – stand to win big and stay ahead of their competitors."

Four Fixed Operations Takeaways from the Forward-Thinking Dealership Study:

1. Forward-thinking dealers are more profitable and more efficient

a. Forward-thinking service departments saw an average of 28% higher service profit change in the last 12 months and 42% were more efficient (as measured by the number of Repair Orders per technician).
b. 53% of the study respondents were classified as static dealers; 47% were considered forward-thinking.

2. Success is found in transparency

a. Integrating pricing estimates into the online service scheduling experience set better expectations with customers.
b. Incorporating technology, such as FaceTime or video chat, into the service experience adds a level of trust and convenience that car owners seek.

3. Flexibility and control are the name of the customer service game

a. Forward-thinking dealerships are implementing communication options that give customers flexibility. Scheduling appointments via text and online chat, online or mobile payment options, and interactive recall notifications give customers the opportunity to schedule their repair directly from an email or text.
b. Dealerships anticipate future investments and innovation to make appointment scheduling, check-in and rideshare booking even more flexible.

4. The technician experience has evolved

a. Automation and integration are critical to keeping the service department operating efficiently and streamline capacity management.
b. Forward-thinking dealerships are leveraging electronic dispatch programs to automatically assign work to technicians and are issuing marketing alerts that notify customers when service slots open.

To learn more, download The Forward-Thinking Dealership eBook at https://www.coxautoinc.com/forward/ and the 3 Profit Opportunities for Today's Fixed Ops eBook at https://xtime.com/profitguide/.

Study Background and Methodology

The Forward-Thinking Dealership Study measures where dealers are investing in technology and processes, key KPIs they are tracking and the impact these investments are having on dealerships today and the next three to five years. The study is based on a survey of more than 500 franchise dealers and was conducted from July 21, 2022 to August 18, 2022.

About Cox Automotive

Cox Automotive is the world's largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, automakers, dealers, retailers, lenders and fleet owners. The company has 25,000+ employees on five continents and a family of trusted brands that includes Autotrader®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital™ and vAuto®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with $22 billion in annual revenue. Visit coxautoinc.com or connect via @CoxAutomotive on Twitter, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn.

SOURCE Cox Automotive