Auto manufacturers lean on their dealership service departments to improve customer retention. Damon Egan, service manager at Sherwood Ford in Sherwood Park, Alberta, Canada, has a suggestion: Find a space that everyone isn’t competing in and make it your own.
“Great service managers and forward-looking people will always be looking for a way to stand out,” he says at Ted Ings “Back to the 80’s” Fixed Ops Roundtable.
Egan calls that search for an uncontested space a “Blue Ocean Strategy,” a term popularized by Chan Kim and Renee Mauborgne. The pair were professors of strategy at the INSEAD business school and co-directors of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France.
Adding free pickup and delivery for vehicles needing servicing is one example of a Blue Ocean Strategy, says Egan. He credits Brian Benstock, vice president and general manager of Paragon Honda and Paragon Acura in Queens, NY, as one of the first to introduce that service in 2017.
“I was transfixed by the idea,” says Egan.
RedCap did the pickup and delivery, but it didn’t service Alberta. “We pleaded with RedCap to come to Canada and let us be your test project,” says Egan.
Now, he says, 26% of all his dealership’s daily service appointments are by pickup and delivery. “There are times we don’t even see a customer,” says Egan.
But, he adds, the whole operation must be frictionless.
Mobile service is another area where a Blue Ocean approach already is paying off for some dealerships, such as Bozard Ford-Lincoln in St. Augustine, FL. The dealership’s COO, Ed Roberts, was also a Fixed Ops Roundtable panelist.
Besides offering free pickup and delivery, his dealership has 10 mobile service vans, taking repairs to the customer.
“He is doing something nobody else is doing with mobile service,” says Egan.
Egan sees another opportunity for a Blue Ocean Strategy in servicing electric vehicles. Sherwood Ford, which has 54 service bays and nearly 50 service technicians, is actively recruiting technicians to work on EVs.
“This is the new frontier,” says Egan. “If we can corner the market on EV repair, that puts us in a place of dominance over other repair shops.”
Subscription plans for vehicle servicing are another area ripe for a Blue Ocean Strategy, he says. Dealerships could, for example, have a monthly subscription plan for various types of vehicle service. Using the mobile service van, it could also perform AAA-like services such as helping when a customer has lost or broken a car key.
Dealership service departments "have to be more original” in seeking out additional revenue streams beyond just offering oil changes for life, especially as EVs become more common, says Egan.
His advice for dealerships for the remainder of the year?
“The first thing is to get the words ‘we’ve always done it this way’ out of your head,” says Egan. “We have to start thinking out of the box. The landscape has changed so much in five years. What will happen five years forward?”