Unlocking Fixed Ops Profitability

Leigh Silver, CEO of Dynatron Software, joins Driving Solutions to discuss how dealerships can unlock greater profitability in their service and parts departments through better data utilization. With decades of fixed operations experience, Silver explains why many dealers struggle to interpret the vast amount of data generated by DMS systems—and how translating that data into actionable insights can drive meaningful operational improvements.

The conversation explores how Dynatron combines software and consulting to help dealerships identify inefficiencies, improve retention of aging vehicles, and optimize pricing strategies. Silver also highlights the importance of alignment between leadership teams to ensure data-driven strategies are successfully implemented. As vehicles stay on the road longer and service complexity increases—especially with EVs—dealers that effectively leverage data and emerging technologies like AI will be better positioned to maintain profitability and compete with aftermarket service providers.

Key discussion points:

•  Why dealerships struggle to interpret service and parts data 
•  Turning DMS insights into actionable strategies for fixed ops 
•  Improving retention of aging vehicles and service profitability 
•  The importance of leadership alignment in execution 
•  Adapting to EV complexity and emerging technologies like AI 
•  Competing with aftermarket service providers through value and pricing

Driving Solutions is the go-to podcast for dealership professionals who want to stay sharp, informed, and ahead of the curve. Hosted by Jim Fitzpatrick and powered by CBT News, each episode brings you real strategies, smart tools, and expert insights to help you run a more profitable operation.

Subscribe on your favorite podcast platform and visit CBTNews.com for more.

Transcript

Welcome To Driving Solutions

Announcer 0:04

This is Driving Solutions exclusively on cbtnews.com.

Jim Fitzpatrick 0:10

Hey everyone, Jim Fitzpatrick. Thanks so much for joining us on another edition of Driving Solutions right here at cbtnews.com. Making the most of the service department often comes down to having the right insights and tools to understand what's really happening. Joining us today is Lee Silver, who is the CEO of Dynatron Software, a company helping dealerships use data to better manage and grow their fixed ops performance. Tell us more about this Dinatron that we've heard so much about. How did you get started? And by the way, welcome into the show, Lee.

Dynatron’s Origins In Service Analytics

SPEAKER_00 0:42

Thank you, Jim. I appreciate it. Thanks for having me today. Sure. Dinatron, interestingly enough, has been around for quite a while, almost 30 years. Oh, wow. Myself, uh, my father, my brother actually got involved about 11 years ago. Uh we bought the business from a very sharp gentleman named Doug Bradley. Uh our family, the Silver family, has been involved in dealership operations, fixed operations with my father going back actually about 45 years. Oh wow. Many years in the industry. Uh we got involved with Dinatron and actually another business called Keeps, uh, which was started originally by a gentleman named Ray Branch. Both of those businesses were deep into the service analytics space. And they were the only two that were that were looking at how data could be utilized to improve performance, albeit at very different angles. Um our old partner, Ray Branch, before he retired, uh, was an expert fixed ops consultant after being in retail for about 30 years. And uh Doug Bradley was a CFO actually and uh built the original analytics software for his wife, who worked in a dealership. And so these two gentlemen were pioneers of their space. And uh us being involved in fixed operations for so many years, um, we were very interested in seeing how we could improve the business um at a granular level that possibly uh others couldn't see with insights that really only very few had. And we came across Ray, we came across Doug, and we were able to partner with them and purchase the business uh because we saw that they had a tremendous capability, but it was really underutilized. The data wasn't quite understood, so they provided some software solutions or they provided consulting solutions, um, but they didn't package it all together in a way that every dealer could take advantage of. Sure. And so we worked uh with them on coming up with solutions and augmenting some of the data and the software so that you know, really every dealership could take advantage, and we put in place some turnkey solutions where folks could understand what's the data, what does it mean, how is it useful for them in their particular instance, and what kind of results can they generate by improving their process using that information.

Jim Fitzpatrick 2:51

Wow, that's awesome. That's awesome. So Dynatron continues to be one of the most exciting growth stories in the industry. Can you update us on who you're serving and where you're serving dealers today?

SPEAKER_00 3:02

Sure, sure. You know, since we got involved about 10 years ago, uh I think we had around 300 dealership clients at the time. Now we're we're up to over 4,000. Oh wow. And most of our customers are in the US, although we also have a a nice group up in Canada. I'm originally Canadian, actually. Okay. And so we we uh do not uh we do not disappoint our Canadian friends up there. We we head up there and are able to service them as well.

Turning DMS Data Into Action

Jim Fitzpatrick 3:27

That's fantastic. Wow. 4,000. Oh my gosh. So what makes uh uh Dinatron's approach to fixed ops intelligent different than what we see out there?

SPEAKER_00 3:38

So I I think it's it's really important to understand there's a lot of data out there that dealerships are able to utilize, but very often that data is not packaged and presented in a way that a service operator or a general manager or dealer can really understand what is this telling me and what should I do? And really that's where our expertise comes in, where we're able to understand at a dealership level, at a DMS level, at a line item level, exactly what that information means. We're then able to translate into what should be done, and we're able to tell how big an opportunity really is to know if it's worthwhile for one of our clients to take advantage of. And so that that approach uh has really helped us where at the end of the day we try to understand what's most beneficial for our client, and then we try to build the data and the processes that really help them take advantage of it on a on both a scaled level, but also specific to the individual dealership's opportunity.

What Keeps Dealers Up At Night

Jim Fitzpatrick 4:33

Sure, sure. Now, you as you know, we're in a very these are very unique times in the marketplace today, and every dealer is really focused on keeping costs down, selling what they can and and taking good care of the customers, but at the same time uh installing efficiencies into dealerships that can really save time, save money, and add more money to the bottom line. What are you hearing uh from your customers today in terms of the challenges that are out there and what's keeping them up at night? Sure.

SPEAKER_00 5:02

Yeah, it's it's a very interesting time. So many different dynamics are at play. We've got things from the COVID effects, supply chain effects, like those things have tapered off, but the effects of what was happening to their businesses where you know margins on the new car side were so great for a while, although folks realized they weren't going to stay, right? You know, they started to come down. And so there's a profit crunch that's been taking place on the new car side over the last few years. You know, in some cases, some of the different manufacturers are in more of a challenging situation than others. You know, if you're a Toyota store, a Lexa store, a Porsche store, you're you're you're doing great. Sales might not be quite as good as they were, or in some cases, their sales volumes are higher, but their margins aren't quite as great. Um, and fixed operations is is humming along. And in some other cases, you know, Nissan, Stellantis, they've had some challenges on on new car inventory and and how fresh it is. And so that's also we're seeing translate into the fixed operations where some of their volumes are down historically where versus where they've been. And so some of these dynamics, along with with tariffs, along with you know the EV push and then kind of the pullback, you know, has made it a very dynamic scenario where you know there's just a lot at play. At the end of the day, there's a lot of unknown going on on the front end, and folks are really starting to focus more and more on the back end, so to speak, or or the controllables. And even in the controllables area, we're hearing you know, a lot of customers, interestingly enough, talk about how they've had record months over these last six months in fixed operations. Oh, yeah. Some of them give us some credit to that. Obviously, they're great operators, um, but they're very much focused on how can I optimize and improve my fixed operation. And whether they're a Stellantis, a Nissan, or a Toyota store, they're able to do better because of it.

Jim Fitzpatrick 6:54

Yeah, no question. It seems as though through any kind of trying times in retail automotive, and I remember this from my days running dealerships, we'd always look to the back end and go, okay, what can fixed ops kick in here? They always seem to be like the the the the uh the friend out there that you know when you needed them, they were there, and when car sales were up through the roof, you didn't seem to need them so much. But uh but fixed ops in in recent years have now been the go-to for many dealers to say, here's where we're gonna make our profits, right? If we get this right, then the dealership's gonna make money and we can survive the ups and downs on retail sales on the front end of the business, right? Absolutely, absolutely.

SPEAKER_00 7:34

I I I remember my time back in the you know 07, 08, 09 scenario where you know things dropped off the map. Oh, yeah. It's not quite as challenging, but that same level of focus is starting to come back where folks realize you know that that uncertainty moving forward um is gonna be there for a little while longer. And as that's happening, you know, the folks that are tremendous at fixed operations feel less of the bumpy road.

Jim Fitzpatrick 7:59

Right, right. Yeah, there's just so much change happening right now, and then you kick in AI and all of these other factors. Uh it's it's just an exciting time to be in the industry for sure. From your perspective, what are the biggest forces that are reshaping the dealership profitability today?

SPEAKER_00 8:15

So I actually, you mentioned AI. I think AI is one of them. Um, there's a positive impact and there's a bit of an unknown. There's there's a lot of great new solutions being proposed utilizing AI. It's the challenge is to understand which ones are real and which ones aren't. Right. Um so that's one of the elements that's definitely going to shape things moving forward. Um as mentioned, some of the macro pieces, the tariff elements, kind of the the come down from COVID, and what does the new front-end margin scenario look like? You know, unfortunately it's not going to be what it was, right? But there are still ways to be successful. Sure. And oftentimes folks are really looking at how can I grow even when it's challenging. And so those controllables, one of the main things we're we're seeing from a trend perspective is folks are starting to expand their horizons of how good can my fixed operation be. And at the same time, they're looking at how will my my variable operation adjust over the next you know one to two to three years. And you know, it's it's very interesting. Buy sells are another thing we're seeing a lot of, a lot of consolidation is continuing to happen. And so we think that that makes things interesting. Um one of the other macro trends is that uh the level of sophistication that will most likely be needed from operators, be it dealers, general managers, and fixed ops uh leaders, um, will need to be better than it was before. Um we don't think that the EV trend is going away. We think that will continue to improve. We think though there's been a bit of a setback only because of the uh credits that have been pulled back uh federal credits. Um but you know, EVs are here to say and it creates a level of again complication on the fixed ops where you almost have multiple service departments. You have an EV service department and you have a an ICE service department, so to speak. Yeah, very good point. That level of complexity isn't great, but the benefit of that is a lot of those types of vehicles can only be serviced by the dealer. Right. And we see that the trend of retention going to the aftermarket in some cases is starting to actually shift back the other way, in particular on EVs. And so there are a lot of challenges, there are a lot of potential wins for the dealers to be had if they're able to up their game and deal with some of these more sophisticated challenges that are coming their way.

The Sweet Spot And Retention Battle

Jim Fitzpatrick 10:41

Yeah, yeah, for for sure. And now, you know, you've got two factors out there in play as well, which is the fact that you've got uh the age, uh the average age of uh cars on the road today, I think, exceed 12 years, butting on 13 years, um, which really helps, as you know, the fixed stops department in a very big way. And then you've got the affordability factor on the price of new cars now exceeding fifty thousand dollars for the average price of a new car. So people are like, eh, not so fast. Maybe I'll, you know, maybe I'll put a little bit of money into the car that I'm driving. As you know, all the cars are might made great today. The technologies are phenomenal for a car that's even four years old compared to the new ones that are rolling off the showroom now. And uh and I th you know I just know that there's more and more of that happening where people are saying, look, let me just keep my car, especially during uncertain times like this, which means that that service department has really got to be you know running at 120%, right? With efficiencies and the software and the and the support that they need back there, right?

SPEAKER_00 11:42

Yeah, absolutely, absolutely. Yeah, you you hit on a great point, which is as the vehicles have aged, it's something that uh we call the sweet spot. Yeah, which is you know, brand new vehicles don't have much service, but it's important to keep them, to retain them, to show your clients, the customers of the dealership, you know, what benefits there are to come back and and do the service work. But those aren't where profits are made. Profits are made in the service in the service department and the parts department as those cars age. And so retention in the three, four, five, six, seven-year range, you know, the OEMs are very dialed into that being very important. But in fact, even as the cars continue to age, let's call it that seven to twelve year range, as you're mentioning, oftentimes it's not the same owner. And so, how do we bring in those second owners of the vehicle? Or if they are holding on to that vehicle past when they would typically trade in for a new one, that opportunity to have them keep coming back, show them that you are competitive, that the dealership is competitive versus the aftermarket. It's actually one of the biggest things that we help our clients overcome, which is the perception that, hey, if my car is older and I need to get work done, I should go to the aftermarket because it's substantially cheaper. Yeah. That's really not true. And over our years of working with dealers, we used to have a business division that was working with both dealers and aftermarket service providers to help them with vehicle uh service repairs and information. Um what we learned from that exercise, you know, 10, 15 years ago was that the quoting tools that the dealership use and the aftermarket use are actually the same. And that the perception that the dealer is much more expensive is something that isn't actually true. There may be a small price difference, but the aftermarket in general has been very good at leveraging that perception to their advantage where they make apples to oranges comparisons when they do their advertisements so that customers truly believe, you know, if I want to have a service done, rotors, brake pads, um, or tires, that they will provide quotes that are apples to oranges. You know, a brake pad and rotor replacement will often get compared to just a pad slap. And so, in that view, the perception is yes, the dealer's two or three times more expensive, but in reality, it's not the case. It may be 15% or 10%, or in some cases it's actually no difference whatsoever. Right. Yet the OEM provides such a better service experience, they provide OE parts, they provide better warranties. Oh, yeah. A lot of that's not necessarily known to the customers, and that is a perception that uh again, we're helping our customers work with their customers to change because folks don't realize just how competitive they are in their market, and oftentimes they simply don't have the comparison data. Obviously, we help them get that data, help them make decisions, and help them promote that within their market. Yeah, and so it's it's it's very fascinating uh to help them with that problem.

Rethinking Fixed Ops In Practice

Jim Fitzpatrick 14:38

Yeah, and it's a it's an important um to make that distinction because as as you know, everybody thinks right away, well, Costco must be cheaper, it's Costco, or Walmart must be cheaper, or even if Pet Boys is out there, it's it's gotta be cheaper than if I'm going to my my dealership, you know, to uh have my vehicle serviced. And for all of those reasons, I'd also add one. You've got a factory-trained technician working on your$60,000 vehicle versus you know, uh Bubba down there that they hired to do oil changes and now they're gonna work on your car. Uh, I'm not so sure I want that to be done, right? So it's it's uh it's it's really interesting to see uh how dealerships have really come forward in this space. They need to come even further because if you ask a lot of you know customers out there, I should say the average consumer, where is it less expensive to have your vehicle worked on? They're gonna say, oh, Costco or Walmart or some of the cheaper brands. But to your point, not so fast. That's just not necessarily the case. So uh you said that that uh the winners in the this environment will be the dealers who rethink the role of fixed operations. What does that shift look like in practice and how does uh Dinatron help?

SPEAKER_00 15:47

Yeah, great question. I number one, there needs to be agreement from an owner level that fixed operations truly is important. Yeah. Because again, as mentioned, sometimes, depending on the times, it comes in and out of focus. And so the sustained focus that moving forward it's going to be an important profit driver, that's step number one. Step number two is then to provide some of the time and resource allocation to it that may not have been done in the past. Solutions that provide great return on investment are always a good idea, uh, but sometimes dealers aren't aware of them simply because they're not focused enough in the area. And so the sustained focus is number one. The need for the dealer and the service management team to also work together on a better understanding what's actually happening will help open up uh opportunities for both of them to help to actually drive that performance. Uh one one of the interesting phenomena that that you know folks are aware of, you know, most dealers and general managers as they came up through the business, came up through the sales side. And so they are they are sales experts, they're not fixed ops experts. That's right. And so getting the dealer, general manager, and fixed ops leader on the same page, yeah. What does this data mean? What can we actually do about it? Getting expectations in alignment and then both working on and agreeing to what's going to be the plan to execute and improve are hugely important. Hugely important because sometimes the uh fixed ops leaders, they're just so busy fighting the fire of the business, because it's a it is a hectic business. Oh, yeah, um, that they don't get an opportunity to think what could be. Dealers and general managers often get to do that, but sometimes they come with uh inappropriate expectations of of what results could be. And so getting them on the same page, yeah, and then being able to properly monitor when they make uh process changes, when they make uh changes to their pricing to see what those effects are and to make sure that they have lasting positive effects, yeah. I think overarchingly that's probably the biggest shift that if folks can make that shift, they're gonna have tremendous benefits moving forward. And then they need to ask themselves are they able to, at a granular level, see what's really going on, do they understand it, and do they have a plan to tackle that? And if they do, they're gonna be in a great space. Yeah.

Final Takeaways And Next Steps

Jim Fitzpatrick 18:11

Well, you nailed it because I was one of those GMs that came out of the variable side of the business, and I leaned on my fixed ops director to say, okay, you know, I'm leaning on you, you know a lot more about fixed ops than I do, so I'm gonna be leaning on you in a big way, and I think you're right. There are a lot of people that are running dealerships today that have come out of variable ops versus fixed ops. Although I would tell you, some of the best GMs I know and dealer principles today came out of fixed ops because they they got the whole, they understand the entire dealership and and where the profit centers really lie. So you're right, getting those two individuals in the dealership operation on the same page and and working through that to realize how valuable some of this data is to it to the bottom line of a dealership. Who doesn't want a nice hundred, hundred and twenty-five percent absorption rate, you know, in their service department? And it's attainable. You you can do it, right? For dealers that are listening to us have this discussion today uh with Lee, um, this might you know be something that, especially in 2026, uh we're looking for, you know, we're looking at dealerships that are that are suffering on the front end right now with regard to gross profit. We're kind of back to a race to the bottom with regard to gross profits. We already know that. Um it's gonna be a fixed ops year for sure. Um you know, maybe this is a phone call you want to make to Lee just to say, hey, let me run by what our operation, what our dealer group is doing, can you help us in that area? Seems like a nice guy. I'm sure he's gonna be more than happy to help you advise you and say, hey, here's what Dynatron can do, and uh let's let's get together. So uh Lee Silver, thank you so much for coming in. These are the kind of solutions that we want to be bringing dealers, and we heard so much about Dynatron software uh that that um I'm so glad that you took the meeting with us because this as I said, this is what dealers need uh on on their side to really win the fixed off profit uh center uh business out there. So thank you so much again.

SPEAKER_00 20:01

Appreciate it, Jim. Thanks again, Bavan.

Announcer 20:06

Thanks for watching Driving Solutions.