Still, she said, Facebook and Twitter are reasonable inexpensive ways to help build a brand and name awareness by helping promote, for example, Service King’s charitable efforts. Social media are how a growing percentage of the population may find your shop and understand your reputation, she said.
“People want to do business not just with good-performing companies, but with companies they like,” Bonner said. “They want an emotional attachment to that company. Social media can help you develop that.”
The panel was asked what, other than improved pricing, they expect from their vendors as they have grown as buyers. Rollie Benjamin, CEO of the 110-shop ABRA Auto Body & Glass chain, said his company focuses more on service than price when working with vendors. In terms of parts, for example, ABRA looks for vendors that can do more to help with cycle time by getting the right part to the shop at the right time.
“We survey our people to score the vendors on what level of customer satisfaction they giving our managers running these shops,” Benjamin said. “We give a report card to the vendors.”
Steve Grimshaw, CEO of the Caliber Collision Center chain, which operates 92 shops in four states, he considers what aspects of business that vendors excel in – and then looks for ways to put that expertise to work for Caliber.
“Rental car companies are experts at customer service,” Grimshaw said. “I expect them to leverage that expertise to help me train my people how to be customer service experts. You have paint vendors who are experts on lean processes; I expect them to dedicate resources to help improve our operations. There’s generally a lot of willingness on their behalf to dedicate resources to help us achieve our objectives. So it becomes more of a strategic relationship than a vendor relationship.”
What are the MSOs looking for in terms of expanding into new markets or acquiring other collision repair businesses? Benjamin said his company operates company-owned shops in currently six major metropolitan areas, but 35 of its shops are franchise operations in mid-sized cities.
Bonner said her company’s model is to operate large shops in high-visibility locations. The average Service King location, for example, has 13 direct repair programs – nearly twice that of most other MSOs – and does $5.4 million in annual sales. A good candidate for Service King acquisition, she said, may be family-owned like Service King, will have a similar culture, and will have room to perhaps double its sales from $250,000 to $500,000 a month.
She said that although all of the 17 shops Service King has added this year have been in Texas, the company is interested in expanding into other states.
“My father used to tell me you can plan your work, but don’t plan on it working out,” Bonner added as a caveat. “It is important to plan, but in terms of growth and decisions about acquisitions, you have to have adaptability as well.”
Grimshaw said reputation within a market is critical when considering businesses to acquire.
“If you think you’re going to buy a (shop) that wasn’t performing well and that when you put your name on the sign, all will be forgiven, that’s being a bit naïve,” Grimshaw said. “It takes a long time and you have to mend a lot of fences to reestablish a reputation.”
The panel was asked to comment on a proposition, espoused by an insurer in the United Kingdom, that business often “trip over themselves” trying to exceed customer expectations when they would be better off just ensuring they consistently meet those expectations every time.
Brock Bulbuck, CEO of The Boyd Group, a Canadian-based firm that also operates 128 shops in the United States (many under the True2Form and Gerber tradenames) said the problem with that concept is that customer expectations keep rising.
“If you don’t strive to wow and exceed and set the bar as high as you can, I think you run the risk of establishing a culture in your organization where just doing your job is good enough,” Bulbuck said. “I don’t think that’s conducive to create promoters (among customers) and growing your business.”
Grimshaw, too, said exceeding expectations is the key to differentiating your business from the competition.
But Bonner said there is some logic in what the U.K. insurer was espousing.
“I think in collision repair, the primary customer is insurance, and if you don’t exceed their expectations, you will not be rewarded with growth,” she said. “The secondary customer is the traditional retail customer. I think it’s true that you don’t have to exceed their expectations; you just have to satisfy them. That’s what we’re rewarded on by the primary customer, the insurance companies, whether we have satisfied those customers and given them great service.”
As the panel discussion ended, Bulbuck said he’s interested in seeing other MSOs succeed because it demonstrates the success of the business model overall.
“I truly believe the success of everyone in this room is dependent upon the collective success of the MSO sector,” Bulbuck said. “So my advice is a bit self-serving: Never put your business at risk, never bet the farm, either operationally or financially.”
The MSO symposium was a new event at what was the first NACE held outside of Las Vegas in seven years. NACE organizers said the return to what will likely be a 3-city rotation (Orlando, New Orleans and Las Vegas) appears to have paid off; reported attendance at this year’s event (more than 18,000 people) was up 15 percent over 2010. About 40 percent of those who pre-registered indicated they were first-time attendees.
Next year’s event will be held October 10-13 in New Orleans, and organizers say the success of this year’s MSO symposium will result in a similar session being held next year. While it will continue to be open only to MSOs, organizers point out that NACE includes nearly 90 other training sessions that have no such restriction on attendance.