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How Automotive Service Technology Boosts Dealership Profitability

By Brandon Hartfiel | May 9, 2023

Last updated on Mar 22, 2024

Technology plays a pivotal role in dealerships, helping each department deliver greater efficiency, profitability and revenue. In the service drive, cutting-edge technology is reshaping the vehicle maintenance and repair process, helping dealerships exceed customer expectations.

Technology platforms help your staff by using analytics to improve efficiency and profits, and while the service drive hasn’t historically been known as an area of the dealership equipped with the latest technology, that has changed drastically in the last few years.  

Dealerships can make better use of the data that's flowing through their systems to identify new revenue opportunities, discover where improvements need to be made and create improved customer experiences. Advanced technologies in the service drive incorporate responsive dashboards, easy user accessibility and create connection points between several departments to enable seamless operations.

Free Guide: 6 Ways to Boost Profitability, Performance & Service in Fixed Ops →

People, Process and Technology in Service Drive Operations 

When people, process and technology are unified, a dynamic and efficient service drive ecosystem can be created, driving forward your dealership’s goals while ensuring customer needs are met with precision and care. Each component plays a pivotal role in shaping the future of fixed operations, creating a blend of expertise, efficiency and innovation. 

The foundation of any service drive is its people. Service advisors, the heart of the service lane, require continuous training and empowerment to stay ahead of the latest trends and techniques in automotive repair and maintenance. Their ability to adapt and excel in an ever-changing environment is critical to meeting service and repair targets effectively and thereby making happy customers. 

Processes focuses on the systematic approach to managing workloads, customer interactions, and service delivery. A well-structured process ensures that the dealership operates effectively, minimizing wait times and optimizing the customer experience. 

It's about finding the balance between streamlining operations and maintaining the flexibility to cater to individual customer needs, thereby enhancing both efficiency and satisfaction.

Technology acts as the catalyst that propels both people and processes to new heights. From advanced diagnostic tools to digital service lanes and customer management systems, technology enables service drives to deliver faster, more accurate and more personalized services.

Advanced products or software systems not only improve the effective labor rate and customer pay but also revolutionizes the repair order process, making it smoother and more transparent for both the dealer and the clientele.

How Technology Enhances Service Drive Efficiency 

Up-to-date and accurate analytics based on a dealership’s own data represents a powerful way to put the service department on par with variable ops in terms of process maturity and optimized profitability. This can prove especially important amid today's automotive market conditions, where fixed ops departments serve as a reliable way to defend the bottom line during market uncertainties. 

  • Digital service lanes streamline the check-in process, allowing customers to easily schedule appointments and service managers to prepare in advance for the day's workload. This advancement not only reduces the administrative burden on staff but also minimizes wait times for customers, creating a smoother, more welcoming service experience from the moment they enter the dealership.
  •  The integration of advanced diagnostic tools and equipment empowers technicians to quickly and accurately identify vehicle issues. This capability significantly cuts down on diagnostic times, enabling faster turnaround for repair orders. It also enhances the precision of the repairs, reducing the likelihood of return visits for the same issue, thereby improving customer trust and satisfaction.
  • Inventory management systems represent another technological boon for the service drive. These systems optimize parts inventory, ensuring that essential parts are always in stock while minimizing excess inventory that ties up capital. This balance is critical for maintaining an effective labor rate and ensuring that repairs can be completed without unnecessary delays, thus boosting the dealership's productivity and profitability.  
  • In addition, customer relationship management (CRM) systems play a pivotal role in personalizing the service experience. By keeping detailed records of customer interactions, preferences, and vehicle history, dealerships can tailor their communications and recommendations, fostering stronger, more loyal customer relationships. 

The combination of data sources to produce useful in-the-moment insights has become a common practice across industries but has typically been hard to achieve in the service drive. Automotive dealership service departments have struggled to access the necessary data while keeping up with their everyday tasks — an infusion of purpose-built software can help them join this wave of digital transformation by enhancing efficiency and service quality. 

Free Guide: 6 Ways to Boost Profitability, Performance & Service in Fixed Ops →

How Does Technology Boost the Service Department? 

One of the most common issues afflicting service departments is that they simply don't have access to the right data to truly optimize services, whether it’s the average cost of parts and services in the area, or the proper balance of labor rates and service pricing. Having a way to quickly crunch those numbers would bolster efficiency and make sure you’re offering fair prices while retaining profitability, which is a value-add for service personnel and dealership leaders alike. 

Software tools exist to fill these knowledge gaps. These analytics platforms are designed to provide actionable insights based on relevant figures and help service personnel apply the same rigor to their labor management and pricing strategy that has become the norm across industries. 

A tech-empowered service drive can keep fulfilling the same function it always has in the dealership — acting as a steady source of revenue and a way to retain customers for the long term — while also becoming more profitable and better optimized all around. This is the potential of technology in fixed ops, and it's a way for dealerships to get more out of their service departments, whatever the present level of tech adoption in the rest of the store. 

Whether you have fully digitized and optimized every step of the sales process, are taking your first steps into these solutions or anywhere in between, making use of advanced technology platforms can help you make significant strides in fixed operations. 

Here’s one clear use case for leveraging technology: 51% of dealers believe customers don’t return for service because they think customers have a fear of being overcharged. Bringing your customers back for regular touchpoints via the service drive is a surefire way to create long-term customer loyalty. 

By leveraging technology to enable more transparency in pricing for your service department, you build a bridge to make customers feel in control, valued and respected when they bring their vehicle back to you. 

Financial Benefits of Automotive Service Technology Advancements 

Seeing the promise of better technology in fixed ops may lead to an important follow-up question from dealership leaders: What's the best way to ensure that these new tools deliver on their promise? The answer comes from ensuring you are effectively using the new tools and ensuring it aligns with your processes and customer experience. Here are a few ways to find success: 

  • The precise diagnostics tools reduce errors and unnecessary repairs, thereby lowering the costs associated with warranty work and repeat services. This efficiency gain not only saves on operational costs but also strengthens customer trust and loyalty, which translates into repeat business and positive word-of-mouth, further enhancing revenue streams.
  • Technological advancements in inventory management ensure that parts are available when needed without overstocking, reducing capital tied up in inventory. This efficient management of resources contributes to cost savings and improves cash flow, allowing dealerships to invest in other areas.
  • Customer relationship management (CRM) systems aid in cultivating long-term client satisfaction by providing personalized service offerings and communications. This tailored approach can lead to increased service uptake and customer retention, driving additional revenue through repeat business and referrals. 

By carefully leveraging technology, dealerships can achieve a competitive edge in multiple areas of the business, resulting in a more financially sustainable and thriving service drive operation. 

The Importance of Continuous Learning in Fixed Operations 

Combining tech upgrades with a hands-on approach to innovation and learning in auto dealerships, magic happens. Expert advice from a consultant can help employees optimize performance, turn your fixed operations team into a robust revenue center, and help you leverage your tech for its data power and efficiency enablement.

In short, when the right people and processes align with technology to create custom solutions for your dealership, you can use data to achieve your goals and ensure your dealership is operating at optimum levels.

However, technology is an evolution – there is no final destination. As advancements continue to make their way to the market, it’s important to keep an eye on what options will support your goals and objectives. Having an expert fixed operations consultant on your side can help you assess new tools and make integrating them into your service drive as seamless as possible. 

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