Fixed Ops Magazine - 2021 Vol18 01 - 60

A D MINISTR ATI O N

PLAYING
PROFIT
DEFENSE
The Importance of
Optimizing Service Department Expenses
As an industry, Fixed Operations puts a tremendous

Dealers already know this. According to December

amount of energy into growing the top line - dollars

2020 market research from WarrCloud, 78% of dealer-

per RO, the MPI, Service Marketing and the list goes

ships strongly agree that going forward, it is important

on. Of course, this is all very worthwhile activity. But

to continuously optimize Service Department expenses.

let us be clear that the goal is not simply growth - it is
profitable growth. There is no other objective. Everything you do every day - write RO's, work on vehicles,
talk to customers, sell parts - is in service of the goal.
The goal - profitable growth. You could grow revenue
incredibly fast if you did not have to make money. You
could have customers lined up down the block. At
least, you could have customers lined up around the
block until you closed the doors.
Profitable growth is a little trickier and requires a
greater degree of operating discipline. As a matter of
fact, it is more important than ever. Fixed Operations

It seems clear that, in order to defend profit, you will

accounted for more than 50% of total dealership gross

have to double down on optimizing expenses and look

in 2019 according to NADA. It is also believed that

for new ways to control expenses/enhance profitabil-

dealership reliance on Fixed Operations to drive prof-

ity. But how?

itable growth will only increase in the coming years. 

60



Fixed Ops Magazine - 2021 Vol18 01

Table of Contents for the Digital Edition of Fixed Ops Magazine - 2021 Vol18 01

Fixed Ops Magazine - 2021 Vol18 01 - 1
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