The Fixed Ops Blind Spot

Service departments see their fair share of routine maintenance and recall work, but many dealerships are missing out on a key profitability driver: customer-pay repair orders.

Through its own research, Prosidium Warranty & Capital said it found that CPROs make up only about 5% of a service department’s repair orders, which it said is an all-time low for dealerships. It claims the repair orders have the potential to bring in between three and 10 times the dollar amount of an average service ticket.

“Customer-pay mechanical is the most profitable repair a dealership has, but a lot of dealerships don’t know their CPRO,” said Prosidium Chief of Operations Aric Savage.

Why aren’t dealerships paying attention to this important metric? Savage said they often claim they are too busy. But he said most of that work is routine maintenance and recalls, making service departments appear busy; meanwhile, their repair order number continues to decrease.

After 20-plus years as a fixed operations director, Savage said he noticed a pattern and asked two important questions: Why are customers leaving, and where are they going?

He said it boils down to trust. Customers need to know they can trust the dealership and the service adviser they are communicating with. He said technology advancements have helped because advisers are able to show the customer proof of needed repairs. But trust is often lost through poor communication with the service adviser or department. Customers need to be shown the value of the repair and the value that the dealership itself brings.

He cited a Cox Automotive report that said 74% of customers that service with a dealership purchase their next vehicles from it, showing that trust built in the service department can lead to customer retention for the dealership.