For years, the showroom might have felt like the main event at a dealership. But increasingly, the real engine profit driver is fixing and maintaining the vehicles already on the road.
Your service and parts departments, or fixed ops, are becoming a massive chunk of your dealership's total profit. In fact, almost half of a dealership's gross profit can come from fixed ops. That's huge.
Offering add-ons and complimentary services in your service department that can keep customers happy and your bottom line healthy.
Of course, it's not always easy. You might be facing technician shortages, competition from independent shops, and the constant pressure to keep the service bay efficient. But with smart strategies you can not only get more cars through the door but also increase the value of each visit.
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So, how do you really crank up the success of your Dealership Service department? It boils down to mastering two key things:
Getting More Cars in the Bays (Volume): Pretty straightforward, right? The more repair orders you write, the more opportunities you have to perform work, diagnose issues, and generate service revenue.
Making Each Visit Count (Value / ARO): Just being busy isn't the whole story. If every customer only gets the bare minimum, you're leaving money on the table. The goal is to increase the average repair order (ARO). The average amount each customer spends per visit. When your team is able to effectively identifies and communicates the vehicle's needs, and the customer trusts your recommendations, the value of each repair order goes up.
You want a busy service department filled with customers who trust you to perform in-depth inspection services and address all their vehicle maintenance needs. Not just the initial reason for their visit.
The maths are simple:
100 cars X $250 averagre repair order = $25,000
75 cars X $400 average repair order = $30,000
By focusing on volume, but most importantly value, you're taking care of your dealership's long-term financial health and building lasting customer retention.
Okay, you've got customers coming in. How do you ethically and effectively increase the value of each service visit?
It's all about clear communication, attention to detail, and building trust.
This is arguably one of the most powerful tools in your arsenal. Instead of just telling a customer they need a new filter, show them a picture or video of their dirty one next to a clean one.
Digital MPIs (Multi-Point Inspections) that include images and videos are incredibly effective at building trust and demonstrating the need for recommended services. It removes doubt. Imagine a mechanic sending a quick video of a leaky hose. You see it, you understand it, you approve it.
In fact, dealerships using video inspections have seen significant RO revenue increases. One of our clients has seen an increase in CP for its RO by $1,993. When customers see the problem, they're far more likely to say "yes" to the repair.
Nobody likes surprises on their bill. It’s important to send clear and easy-to-understand estimates directly to the customer's phone, ideally with those photos or videos attached. This transparency eliminates guesswork and turn skeptic customers into trusting ones.
Research shows dollars per RO improve significantly when customers receive live estimates electronically. It shows that the amount spent per RO increased by 50%, and some of our customers have experienced over 50% approval rates for additional services in less than 10 minutes when using Kimoby and less than 4% DECLINE RATE on additional work.
Don't underestimate the power of manufacturers' recommendations. Reminding customers about their vehicle's recommended service intervals and explain why these services are important for the longevity and performance of their vehicle.
It can be a great way to bring customers back to your service bay and increase customer pay (CP). It positions you as the expert looking out for their vehicle's health, leveraging the authoritativeness of the manufacturer.
Make comprehensive inspection services a standard part of every service visit, even routine oil changes. Your technicians should be proactive and identify all potential issues, both immediate and upcoming.
Catching things early provides value to the customer and opportunity for your fixed operations. It also demonstrates your expertise and care.
Great inspections are useless if the information isn't relayed effectively to your customers. Help technicians to be excellent communicators so they are able to clearly explain the identified issues to service advisors.
This way, it will be easier for advisor to translate that technical information into understandable terms for the customer. It will lead to more approved parts sales and services.
Having a team that can identify and suggest minor, inexpensive add-ons like replacing burnt-out light bulbs, key fob batteries, or wiper blades is essential to increase average repair orders.
While these small charges might seem insignificant individually, they accumulate across hundreds of RO, and will definitely make the difference on your profits.
When presenting recommended work, your service advisors should offer customers different approaches or packages at various price points, maybe in a simple side-by-side comparison. A simplified menu of options can make decisions easier and less overwhelming.
Increasing your average repair order (ARO) is crucial, but equally important is maintaining a steady flow of vehicles through your service department. A Dealership Engagement System (DES)™ addresses both challenges simultaneously.
A DES™ connects all customer touchpoints throughout the service journey by centralizing communication, multimedia engagement tools, and courtesy vehicle management into one unified platform. This integration creates both operational efficiencies and revenue opportunities.
Increase Repair Order Values Through Courtesy Vehicles: Offering a loaner vehicle significantly increases customer convenience, directly correlating to higher average repair orders. Dealerships leveraging a DES™ to manage their loaner programs have observed substantial increases in service revenue. Typically seeing up to a 35% increase in average repair order values compared to dealerships without structured loaner programs.
Boost Revenue Through Enhanced Communication: More interactions mean higher repair orders. Dealerships using DES™ to maintain frequent, multimedia-rich interactions (texts, photos, videos) see significant ARO increases. For example, dealerships achieving full customer collaboration through multimedia engagement average up to a 323% higher repair order compared to minimal engagement.
Benchmark and Improve with DES™ Score: Kimoby introduces the DES™ Score. A unique metric that benchmarks your dealership's engagement level and provides actionable insights to further improving customer interaction and revenue. The DES™ Score clearly demonstrates how increasing engagement directly translates to higher revenue and CSI.
Keep Customers Coming Back: Happy customers return. It's that simple. DES™ makes you offer a smooth and transparent experience by consistently updating customers with real-time communication, multimedia explanations, and proactive updates. This transparency builds trust, resulting in stronger customer relationships and significantly higher repeat business. Customers who experience excellent service are much more likely (74% vs. 35%) to buy their next vehicle from your dealership.
Turn Recalls into Revenue Opportunities: Recalls represent a strategic opportunity to engage customers. A DES™ makes recall management easy by proactively notifying customers and efficiently scheduling appointments. Once customers arrive for recall work, your dealership can perform comprehensive inspections, identifying additional legitimate service opportunities.
Automate Service Reminders: Automated service reminders through DES™ create continuous awareness about critical maintenance needs. Your dealership remains top-of-mind and customers consistently adhere to recommended service intervals.
Bridge the Sales-to-Service Gap: DES™ facilitates seamless introductions between new car buyers and their service advisors right from the start. Establishing this early connection enhances customer comfort, driving increased loyalty and future service visits.
Kimoby is currently the only Dealership Engagement System (DES)™ available, uniquely positioned to help dealerships maximize their revenue opportunities, optimize customer engagement, and improve the overall service experience.
Increasing your dealership's repair order revenue isn't about high-pressure tactics. It’s with a fundamental shift towards providing comprehensive service, communicating effectively, building unwavering trust, and running an efficient operation.
Attracting a healthy volume of customers through convenience and proactive outreach, and maximizing the value of each visit through thorough inspection services, clear communication (especially visual aids!), and addressing all the customer's vehicle needs, big and small.
By implementing these strategies, and by taking advantage of a Dealership Engagement System™, you can significantly enhance your average repair order and maintain stronger customer loyalty that will drive greater profitability for your entire dealership.