Fixed Ops Roundtable

Dave Boyle is the President and Chief Executive Officer of TraXtion. David brings more than 25 years of experience in the automotive industry to his position as CEO of TraXtion. David is directly responsible for all elements of TraXtion's North American company in his role as president and chief executive officer. David has put in thousands of hours in dealerships across the United States and Canada over the course of his career and is a recognized authority on dealership fixed operations.

In this episode, Dave returns to the Fixed Ops Roundtable to elaborate on how dealers can recognize, tackle, address, and take on the tire business to increase profitability and loyalty and examine tire sales as a means to increase customer loyalty. Consequently, if you want to develop your business by increasing your active customer base, average transaction value, and frequency of purchases, tune in today!

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What we discuss in this episode:

RO counts all across the board are going to drop very soon, coming from the fact that we've had these unprecedented two events in the last 24 months between COVID and the supply chain issues. We've lost a lot of cars from the parking lot because we're not selling as many.

Our industry has grown by selling cars and then servicing the vehicles that we sell.We're not very good at going out and doing what the aftermarket does and going after cars that are not necessarily cars that we sold. Most of our service departments rely heavily, if not exclusively, on the cars that we sell,and if we're not selling them, this is an alarming thing that, quite frankly, I don't think we've ever seen before. And while this is challenging, the impact on service is going to be something we've never seen before.

Those cars that we haven't been selling are going to come back to bite us in the service department, and I think that service managers need to be prepared for this and learn to fix thisIn the face of all this doom and gloom.

Boyle claims that electric vehicles will cause a dramatic shift in how service departments are utilized by dealerships. No oil changes will be necessary for EVs, eliminating one of the most popular reasons for customers to return to the dealership. According to Boyle, the issue is not the potential loss of income from services like oil changes but rather the motivation for the consumer to visit the dealership in the first place. the fact that it's been going away for decades as we went from 3000 miles to 5,000 miles to 10,000 miles now to whenever the light comes on, and it's not revenue that we lose. There's something much bigger at play, and that's the fact that we've used the oil change forever as the trigger for the service visit every maintenance.

Every maintenance bundle is centered around an oil change. And we've used the oil change for as long as the trigger tells us to come in and get the rest of the maintenance work done. When

that goes away with VST in particular, what's going to be the trigger? What are we going to have the customer come back in for? It will not be for an oil change.So we need to think about how we can get around this and still be successful while having our customers return on a regular basis,and if we start to have fewer service visits over time, it's going to be devastating for the industry. So we need to give some thought to what is going to be the trigger. What are we planning on inviting people to?The industry has built an entire procedure around oil changes at preset intervals, which allows for a multipoint check and the discovery of additional work. When the service of oil changing no longer exists, what then? When there's no motivation for customers to make regular dealership visits, what will happen?

Thirdly, it’s the potential labor shortage that we've got with particular technicians. And it's not just technicians; obviously, it's service advisors and everybody else that we need to keep our service operations running. But the shortage of particular technicians is going to be tough. It is a tough one, and it's going to continue to be a tough one going forward.

One of the things that we should focus on specifically is what kind of labor you need. What kind of people do we need? What kind of technicians do we need? And is that going to change over time? Obviously, we still require technicians who can perform diagnostic work, but if you believe any of the other claims, such as tire work, brake work, or maintenance type work, that will still be required, whether it's an ice engine or an electric vehicle. Those are the types of technicians that can be a growth area in our business. The diagnostic technicians and the guys that can fix problems are still going to be needed, but things like over-the-air diagnostics are going to be a key piece of a dealer service department's future without a doubt.

Boyle claims that maximization of profits is secondary to maintaining an existing clientele. As only about one-third of clients return after making a purchase, the oil change is a means of keeping them coming back. Boyle says, "Tires are the new oil changes."

Boyle claims that tires are custom-made for each car. If dealers want to bring customers back, he thinks they need to present themselves as tire specialists. He claims that dealers are losing out on business if they don't offer tires.

Tire shops can make more money by offering upkeep and repairs as add-on services. If they don't sell tires, tire change shops can't compete with big chains that offer more services besides tires.

Listen to the episode featuring David Boyle for even more insights!

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