In his latest “Think Tank Tuesday” video, Potratz Advertising’s Paul Potratz chats with a top Honda dealer on how his store achieved 137 percent fixed coverage.

Don Boyle, general manager of Hendrick Honda of Charleston, explained that his store has ramped up its service department so much it could be negative 65 cars at the end of the month and still be profitable.

Boyle said that when the store implemented its new program, the dealership wanted to focus on service, and pushed their average of 60 percent to 65 percent fixed coverage up to 137 percent.

“For service, the No. 1 thing is to make sure you are very competitive in your market, because the perception is prices are higher as a franchised dealer than the independents, so you have to know your market,” said Boyle.

He also explained that making sure you are communicating to your customers about all services and dealers, from tire rotations to free oil changes.

One of the first things Boyle did when ramping up his store’s service department is to send out customer surveys in an effort to create the optimal service department for his market.

In regards to high gross from the service department, Boyle had this to say: “You are no longer concerned about profitability in car sales; you are more interested in gauging market share and getting people to come back to the service drive.

“It is a big advantage because you don’t have the pressure of making money on the front end,” he concluded.

To view the latest “Think Tank Tuesday” video from Potratz Advertising, see here.