How to Increase Fixed Ops Revenue and Profitability

Here's something dealership pros know  but rarely discuss openly:

Fixed ops might represent just 12.4% of your total sales, but it generates a whopping 50.5% of your dealership's gross profit.

While new car sales grab attention, the real, consistent profitability comes from your service bay—service, parts, and collision departments.

Table of Contents

• Why Fixed Ops Revenues Are Important

• Why Customer Experience Matters for Fixed Ops Success

• 8 Key Strategies for Improving Fixed Ops Profitability

  • Elevate the Service Customer Experience

  • Optimize Pricing and Value

  • Drive Operational Efficiency

  • Strategic Parts Management

  • Invest in Technician Training and Specialization

  • Embrace Technology and Digital Transformation

  • Develop High-Performing Service Advisors

  • Focus on Performance Management and Continuous Improvement

• How Kimoby is Transforming Customer Engagement for Fixed Ops Success

Why Fixed Ops Revenues Are Important

If you've been in automotive for a while, you know the market can swing wildly—sales figures jump, dive, and bounce unpredictably. But even in tough times, customers will still need oil changes (well for the future of ICE at least), brakes, tires, and routine service. Your fixed operations department act as your dealership's financial safety net, maintaining profitability even when new car sales slow down.

And it's not just steady revenue, it’s good, solid profit. Customers trust your dealership expertise and are willing to pay a bit more for genuine OEM parts and quality service. This trust helps you maintain healthy margins and build stronger relationships, ensuring customers come back not just for their service needs but eventually for their next vehicle. In fact, customers who return to the dealership for service are 74% more likely to buy their next car from the same dealership, compared to only 35% likelihood for those who do not use the dealership for service in the past year.

A crucial aspect here is your "absorption rate," the percentage of your fixed costs covered by fixed ops. A higher absorption rate makes a dealership more resilient during economic downturns by providing a financial cushion through consistent revenue from fixed operations.

Another hard truth is that customers are not going to the dealerships has often has they used to for servicing their car. Indeed, a study by Cox Automotive found that in the U.S. service visits to dealerships represented 30%, down from 35% in 2021. Another reason to up your game and make them want to visit you.

Why Customer Experience Matters for Fixed Ops Success

Here's the hard truth:

Providing an "okay" experience isn’t enough anymore. Customers have sky-high expectations, and if you don’t meet them, they'll quickly find another dealership that does. But exceed those expectations, and you'll not only secure their repeat business, you'll win their loyalty.

Think about your own best service experiences. Maybe someone greeted you by name, kept you updated regularly, or went the extra mile to fix your problem quickly. Those small, genuine touches leave a lasting impression and turn transactional interactions into trusted relationships. This level of service directly affects your reputation, online and in real life, influencing future customers’ choices.

8 Key Strategies for Improving Fixed Ops Profitability

1. Elevate the Service Customer Experience

Summary:

• Personalize interactions

• Simplify scheduling

• Maintain transparent communication

• Offer comfortable waiting areas

• Conduct genuine follow-ups

Remember your last standout customer service experience? Chances are, someone treated you as more than just another number. Apply this mindset to your dealership: use customer data to personalize each interaction.

Greet customers by name, remember their vehicle's history, and anticipate their needs. Offer easy online scheduling, transparent updates via tools like Kimoby, and provide comfortable waiting areas. Finally, follow up genuinely, showing customers that you value their feedback and their business.

2. Optimize Pricing and Value

Summary:

• Communicate dealership value clearly

• Provide transparent, upfront pricing

• Offer strategic service packages

• Implement selective price matching

It’s tempting to compete strictly on price, but the real win is emphasizing your value. Clearly communicate why your dealership service, OEM parts, certified technicians, and warranty-backed repairs is worth a slight premium.

Provide transparent pricing upfront, avoiding surprises that hurt trust. Strategic service packages or selective price matching on common items can help attract and retain customers who might otherwise shop purely on price.

3. Drive Operational Efficiency

Summary:

• Adopt Digital Vehicle Inspections (DVI)

• Streamline scheduling and workflow

• Invest in technician training

• Eliminate process bottlenecks

Your dealership’s success depends on getting cars in and out efficiently without compromising quality. Digital vehicle inspections are a powerful tool, especially when combined with Kimoby, letting customers actually see what repairs their cars need. Some of our clients are even automating a large piece of it using the UVeye and Kimoby integration.

Optimize your scheduling processes and workflow, minimizing downtime and improving technician productivity through focused training. Remember, a more efficient team is happier, more productive, and more profitable.

4. Strategic Parts Management

Summary:

• Expand market channels (retail, wholesale, online)

• Develop an effective online presence

• Optimize inventory with analytics

• Run targeted promotional campaigns

Don’t underestimate your parts department. It's not just a supplier to service, it’s a significant profit center. Expand your market reach through retail, wholesale, and online sales channels.

Build an online parts presence and drive awareness through targeted promotions and digital marketing. Optimize inventory management using data analytics to keep your shelves stocked smartly, ensuring availability without overspending.

5. Invest in Technician Training and Specialization

Summary:

• Encourage continuous training

• Promote specialization and certifications

• Prioritize emerging technology, like EVs

With vehicles becoming increasingly complex, technician training isn't optional, it's essential. Encourage continuous learning, specialization, and OEM certifications, especially for emerging technologies like electric vehicles. Having technicians specialized in EVs it a good strategy to future proof you service bay.

6. Embrace Technology and Digital Transformation

Summary:

• Integrate CRM and DMS

• Provide mobile solutions for staff

• Offer user-friendly online customer tools

• Use targeted digital marketing strategies

Using technology isn't about fancy gadgets, it's about making your fixed ops department run smoother, faster, and more profitably, while offering a great customer experience.

First, integrate. Your platforms should be able to talk to each other. You shouldn't have data silos, or need to do double entry.

Empower you team with tool that let them have Instant access to customer history, real-time service updates, digital vehicle inspections – everything they need, right at their fingertips.

Give customers comprehensive touchpoints on their devices. Let them book appointments 24/7, receive SMS updates, approve repairs with video evidence, and complete payments online—including financing options for costlier repairs.

Text messaging has become essential for modern customer communication. It cuts through the noise for appointment reminders, service updates, targeted promotions, and quick Q&As, delivering the immediate interaction today's customers expect.

Beyond telling customers about issues, show them directly with short inspection videos highlighting problems with their vehicles. This visual confirmation builds credibility and significantly increases repair authorization rates—because seeing truly is believing.

If you service fleets, a dedicated fleet management app is a must-have. Give fleet managers the tools they need to track maintenance, schedule service, and manage their vehicles efficiently.

Finally, data is king. Track your key performance indicators (KPIs) religiously. Analyze the data, identify trends, and use those insights to optimize every aspect of your Fixed Ops operations.

While various tools can help, a platform like Kimoby can combine many of these communication and workflow aspects into one simple and beautiful software.

7. Develop High-Performing Service Advisors

Summary:

• Comprehensive training programs

• Empower decision-making

• Reward outstanding service

Your service advisors are your dealership image, they set the tone for every customer interaction. Train them thoroughly, equipping them with in-depth product knowledge, communication skills, and confidence.

They should be able to solve issues quickly and effectively. Recognize and reward advisors who deliver outstanding service.

8. Focus on Performance Management and Continuous Improvement

Summary:

• Set clear KPIs

• Regularly review and analyze metrics

• Foster continuous improvement culture

• Benchmark best practices

Great dealerships never stop looking for ways to get better. Track key performance indicators regularly like customer satisfaction, labor rates, and technician efficiency. Use data to identify strengths and gaps.

Create and encourage an environment of feedback and continuous improvement. Benchmark against industry leaders to keep pace and adopt best practices. This approach is a good way to make sure your dealership remains resilient and competitive.

How Kimoby is Transforming Customer Engagement for Fixed Ops Success

Kimoby changes the game for dealership engagement, making interactions quick, transparent, and easy.

From personalized text messaging and digital payment options to automated appointment reminders, Kimoby keeps your team coordinated and your customers informed.

It’s all about eliminating friction and keeping everyone on the same page, helping you build stronger customer relationships and higher profits.

Conclusion

Fixed ops should be one of your dealership priority. For a better customer , invest in your people, and adopt smart technology solutions like Kimoby.

This approach secures your dealership’s profitability and customer loyalty, no matter what the market throws at you.