The Collision Industry Conference (CIC) grappled with key issues facing collision repairers, including insurer steering and the ever-increasing number of third party claims administrators, when participants gathered in San Diego for CIC's annual January planning meeting.
Hank Tarter jokes that if you're going to have a heart attack, the place to be is Keizer, Oregon, a community of 35,000 residents just north of Oregon's capitol city of Salem.
"That's because one of the civic group's recent fund-raisers that we helped with here put defibrillators in every Keizer police car," says Tarter, owner of Tarter's Keizer Collision Center, who took an active role in making the fund-raising effort successful.
Tarter believes in giving back to the community in which he lives and does business, and is regularly involved with Rotary and Chamber of Commerce auctions, raffles and other efforts to raise money for community projects. His shop, which employs 15 people, also sponsors Little League and high school sports.
"You do it, first and foremost, because you like doing your civic duty, doing something for the community where you've lived for 27 years, and I do enjoy that," Tarter says. "Otherwise, it's too easy to get caught up in your own world and your day-to-day stuff."
And while Tarter's efforts may be unique among collision repair shop owners in his town, it's not hard to find shop owners around the country doing similar things for their communities.
"It doesn't take too long in talking with just a few shop owners, managers and technicians to realize this is a very giving industry," says Chuck Sulkala, executive director of the National Auto Body Council.
Shops paint trucks for kids
Gigi Walker is another shop owner who has found a way to make a difference in the lives of children and families in her community.
Walker, owner of Walker's Auto Body in Concord, California, participates each fall in a friendly competition - among shops in the East Bay Chapter of the California Autobody Association, including Mike's Autobody also of Concord - to customize models of tractor-trailers.
"Usually about a dozen East Bay area shops participate, and each has about two and a half months to customize their truck," Walker said. "Some of the shops put hundreds of hours into these trucks. Then in November we get together for a big dinner and auction. The trucks get auctioned off for anywhere from $200 to $1,000 each."
While the silent auction is taking place, the fancy paint jobs and other customizing work done on the trucks are judged by a 3-person panel that generally includes a local artist and a local or state government official. At the end of the evening, all of the funds raised through the auction are presented to uniformed Marines who attend on behalf of the Toys for Tots charity.
"We had about 250 people at the dinner last year, and we ask each of them to bring a new toy to donate as well," Walker said. "A lot of people bring more than one, so this last year in addition to the $4,000 we raised, Toys for Tots received 300 to 400 toys as well.
"It's really a one-of-a-kind event," Walker said. "It really brings our industry together and lets our techs showcase their stuff - in a small way, but for a great cause."
Donating a repaired car
Brad Shelton said that several years ago Akzo Nobel brought him an idea for another way he could give back to his community - and he's been giving a car away to a needy family every year since.
"I like to give back to people and try to help people out. That's just kind of my nature," said Shelton, owner of Shelton Collision Repair in Derby, Kansas. "I felt like this was a fantastic opportunity."
A growing list of Acoat selected shops in the U.S. and Canada participate in the Akzo Benevolence Program by repairing a vehicle to give to a family in need each December. The shops generally work with a charitable organization in their community to select a family in need of reliable transportation.
"I ask the two charities I work with to narrow it down to two or three families, because the first year I was given the stories of 10 or 12 families, and reading what these people had been through made me want to give 10 cars away," Shelton said.
He said his vehicle donations generally go to women with children trying to get their lives back in order after leaving abusive relationships. In addition to the vehicle, he invites other businesses and individuals to donate other items on the family's "wish list."
"Last year, we had about $2,000 in other items with the car, including a washer and dryer that we delivered and installed," Shelton said. "I use the cash donations to maybe give a money order payable to their landlord, or gift cards for gas, and maybe a small amount of cash to the mom so she can buy a Christmas gift or two for her kids that's 'from her.'"
Akzo's Chris Donnelly said he has worked to increase the number of shops participating in the program which he based on an effort started in 1994 by Dave Adams of Dave Adams Classic Auto Repair in Orem, Utah. Donnelly said shops are often able to find vendors to donate necessary parts, a mechanical shop to provide oil changes for the vehicle for a year, and an insurance agent who will donate liability coverage for several months or a year. He said many technicians decide to do the work without pay to help the cause.
Like Shelton, many of the shop owners involved in the program put their own unique spin on it. Some have gotten insurers or salvage yards to donate the vehicle. In Florida, a group of shops works together to repair and give away vehicles.
Joe Lewright of Ellis & Salzar, a shop in Austin, Texas, worked with a local Head Start program to establish a "responsible parent of the year" program, in which the winner receives the vehicle. He works to make sure the donation to the family includes bicycles for the kids "so the parents aren't the only ones that get wheels that day."
Procare Automotive & Collision in San Antonio, Texas, was actually invited to present its car to a family on the local "Good Morning, San Antonio" television show. After the broadcast, the producer of the show said the station's phones lit up with calls from viewers saying how much they appreciated and were touched by the show of generosity.
That kind of positive publicity is great for the shop and the industry, Shelton said, but it isn't why he participates in the program.
"You can't believe the feeling that overcomes you when you're doing this, when you know you're impacting somebody's life so much," he said. "I've even thought the last couple years about not publicizing it, because I don't like to draw attention to myself. But I've decided it doesn't do it justice to keep it secret, because it's really a nice story, a Christmas story. I make it public to let people know there are people out there who like to help. And it makes your employees look and feel good, seeing that you do the right thing, that you all give back to the community, that you try to help people."
Shop focuses on "safe kids"
At the Pace Auto Group in Huntington, Indiana, for example, looking out for the safety of children has become part of the daily life of the dealership's collision repair center.
"We began by doing bicycle rodeos through the shop just to give something back to the community," said Jeff Rice, manager of the shop. Each child was fitted with a new bicycle helmet after watching a 15-minute video on bike safety. They could then practice their new skills on a fenced-in bicycle "obstacle course" with instructors coaching them on such things as obeying stop signs and watching for cars.
"I think at our first event we gave out about 100 helmets," Rice said. "But we had 300 calls that first year for kids to sign up. So the next year we offered it to 200, and we did that for about four years, giving away 200 bicycle helmets every year."
The shop is now among the most active participants in the "Safe Kids" program, checking for proper installation of child safety seats in cars and replacing seats that are found to have problems.
"We see somewhere between 30 and 40 people a month to do car seat inspections and installations," Rice said. "If the safety seat is bad, we give the parents a brand new seat at no charge."
Some of the funding for the 400 to 500 car seats Pace gives away each year comes from foundation grants and local donations. Becoming certified to participate in the program and train vehicle-owners on proper car seat installation required Rice to attend training over a 5-day period.
The company now has a written policy to inspect all car seats in vehicles that come through the shop.
"Once we've helped a customer get their car seat installed properly or given them a new car seat, they're our customer for life," Rice said. "But the main thing is we're helping to save the lives of kids in our community. It's hard not to feel really good about that."
Helping the image
Sulkala, who leads the National Auto Body Council's efforts to improve the image of the collision industry, says that folks like Tarter, Shelton, Walker, Rice and others involved in such efforts to give back to their community make his job easier.
"They're demonstrating what those of us in the industry know but that we need to make sure the general public sees and understands," Sulkala said. "And that's that this industry is made up of great and kind and generous individuals who through their efforts in their own shops and communities make us a very giving industry."
John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988.
While I can load up with reasons why Governor Arnold Schwarzenegger won’t okay collision repair legislation opposed by the insurance industry, I’d prefer to focus on what it would take for him to overturn the wishes of insurers who do business in California. The short answer is “consumers.” And while I’m at it, let me add that “consumers” are the answer to stopping unfair insurer practices in collision repair settlements.
Insurers, including their lobbyists, excel at steering. Insurance agents send claimants to DRPs while insurer lobbyists direct “neutral parties” (legislators and staff) to points of law that have nothing to do with the harm caused by steering. For example, I recently spoke to a consultant for a state legislator who asked me why the CRA would sponsor a bill (SB 1167) that was unconstitutional. When I asked her how she arrived at her legal opinion, she cited a United States Fifth Circuit Court of Appeals decision that struck down a Texas law that she was told was similar to SB 1167. Her source of information was an insurance lobbyist. She’d been steered by one of the best.
The Collision Repair Association of California’s sponsorship of a proposed new state law on aftermarket parts (see cover story this issue) is the latest in a series of actions aimed at helping repairers throughout the state in 2008. The bill, SB 1059, by State Senator Carole Migden (D-San Francisco), simply makes it an unfair business practice for an insurer to require installation of aftermarket parts on a vehicle under factory warranty.
But, as with any CRA effort, there is much more than words on paper. In brief, SB 1059 is part of the association’s strategy to restore contract power to the repairer.
I like the perspectives of CRA board member John Tyczki, J&M Auto Body, San Diego, who says “If a majority of policyholders knew they had the right to select their own repair shop and if they understood that some shops practice quality repairs while others are forced to meet lower standards, the high quality shops would do well.”
I talk to legislators and their staff three to four days per week. Their insights, or lack of them, are eye-openers when it comes to the collision repair process. Some of them believe the repair contract is between the policyholder and the insurer — the repairer simply does the work as dictated by the insurer.
The California Autobody Association held its first quarter board of directors meeting on Saturday, February 21 in Buena Park, CA.
The California Autobody Association (CAA) is coming off a very good year and is ready for the challenges of 2008. Already we have seen that this year will be just as active as last year. 2007 was a year that the CAA met our membership goals of over 100 new members and we are projecting that 2008 will be an even better year for membership and accomplishments. One of the most important parts of our association is the hard work our volunteers dedicate to the success of our state chapters. The CAA currently has nineteen active chapters throughout California which includes three new active chapters, Bakersfield, Ventura, and San Fernando Valley. Our chapters hold regular meetings that include updated information and presentations on our industry that is vital to the success of these businesses.
We never had DRP relationships and have heard horror stories about them. But some days it seems we need to become a DRP shop just in self-defense. How do you make the decision?
Here is a true story from my book, HEY LOOK! I FOUND THE LOOSE NUT, that might spark your interest.
A customer called [my auto electric shop] and said he just purchased a car from the police auction, but it had some sort of strange noise coming from the driver’s side electric seat. It seems every time he moved it there was a strange electrical sound. He thought there was something wrong with the seat motor.
He was coming to me, an auto electric technician, to get it fixed.
“Sure,” I said. “What kind of car is it?”
“It’s a Peugeot,” he answered.
I’m not much on Peugeots, but I told him I could take a quick look at it and see if I could do anything for him.
In the current economy you have two basic choices. You can agree with the naysayers and believe that there will be a couple years of recession to ride out, it is going to get worse, and there is nothing you can do—or you can decide to ignore the recession and take positive steps to maintain and grow your business. That’s right, I said ignore the recession… let me explain why.
When you started your business how many people told you it wouldn’t work, you shouldn’t do it? Did you listen to them? NO! You rolled up your sleeves and built a business of which you are very proud. It’s time for you to revisit the basics.
a. Know Your Metrics
A metric is an indicator of how your business is progressing. Some great indicators are number of calls, invoice count (car or unit count), sales, gross profit, hours per repair order, parts to labor ratio and customer satisfaction.
b. Monitoring Your Metrics
Monitor your metrics more frequently and review your progress more often than usual. Think of it as zooming in on the detail. Look at things by the week instead of the month or by the month instead of the quarter. Don’t wait for the results to play out, look early and often to allow for proactive course corrections to keep your business on target.
Now more than ever, provide excellent customer service. Who determines the level of your service? Your customer does! Ask them how you are doing and what can you do even better to help them during this difficult time. And then respond accordingly within reason to meet their concerns. By all means let all customers that gave you feedback know what changes you are making to help them out.
We are seeing more and more questions about employee engagement during this economic downturn. People are nervous, scared and unsure right now, including your employees. It is your job to keep your employees positive, helpful, focused on the customer and results oriented. No matter how hard you plan, layoffs may be necessary but don’t make the mistake of laying people off too soon. Remember that this recession will end and people are hard to find, especially trained people who know your business. Instead entertain the idea of temporarily cutting back on wages and/or reducing hours per week with the entire staff (including you).
Make sure your business model is a profitable one now! Too many times we start coaching a client to find that their business is geared up for a level of business they haven’t yet achieved causing them to make at best minimal profit and more likely lose money. Don’t grow to profit…be profitable now! Review your business model and staffing to ensure profitability at your current level of business. Then develop a plan to increase your volume and add staffing as volume requires.
Cash is king! Make sure you’re not spending more than is coming in. Take your fixed costs (expenses plus technician wages if paid hourly or salary) and divide the amount by the number of days open in the month. This is your daily breakeven amount. You need to generate at least that amount in gross profit every day to stay positive. It won’t take long when you dip below your breakeven amount to start losing capital and, if unchanged, possibly going under.
“Good times, bad times, there will always be advertising. In good times people want to advertise; in bad times they have to.”
—Bruce Barton (1886–1967)
The first expense cut is typically the marketing or advertising budget. This is the worst place to cut back. In the short term there is no adverse effect, in the long term it is disastrous. We recommend reviewing where the marketing budget is being spent and measuring the results. Every piece of marketing should include a call to action; small businesses shouldn’t be trying to build a brand. Marketing that isn’t bringing in an acceptable return should be reworked or scrapped in favor of other avenues. Your marketing budget should be 8% of sales minus rent to maintain your current volume of business and 10% of sales minus rent to grow your business.
Don’t follow the herd mentality and wait for outside circumstances to change your business. After speaking with customers, use their feedback to improve your operation (within reason of course). Separate yourself from your competition, making it a no-brainer knowing where to bring a vehicle for repairs. Is a dealer closing in your area? Prepare an ad that positions you as the repair solution for that particular carline. Is an independent closing? Call the owner and offer to purchase his customer list and develop a letter together you can send to his customers. Create non-competing strategic alliances. Is there a business that you frequent that has customers that would value what you have to offer? Would your customers value what he has to offer? Develop a letter that he sends to his customers recommending you with some type of offer extended. Return the favor by sending a letter recommending him to your customers.
Look at other industries for ideas that can add value and help build your business. The best advice that I can pass along to you is that you should develop a plan with a crystal clear desired result and then ACT on it! Don’t get stuck on working the original plan until it produces the results. The plan may need to be modified along the way to get the desired result. But the result stays the same. Waiting until you have the “perfect” plan is not possible and ill-advised. You will never think of everything. As Dwight D. Eisenhower said, “The plan is useless, but planning is essential.”
Attitude is so important, especially now. It is vital to your business that you stay positive. Be realistic but don’t let fear take hold. With steadfast determination you will get through this current season of challenge and come out on the other side stronger. You need to feed your attitude daily by reading books on positive attitude.
There are times when a business owner can’t see the forest through the trees. A business coach can be a great investment providing an objective viewpoint, help ground the owner focusing him on what is important and developing next action steps. This process allows you to determine your goals and needs and then build an action plan for getting to your desired results.
Rick White is a managing member of One Eighty Business Solutions (180BIZ), a Virginia based coaching and business solutions provider to the automotive and truck repair industries. For more information, email email@example.com or call (540) 833-2014.
Web sites can be a very powerful tool to help customers say YES to your businesses. More and more people make buying decisions as a result of research done on the Internet.
You don’t have to look beyond the attention given to automotive spending by companies like Google to see how important web presence is to automotive-related consumer spending. Automotive was, by far, Google’s best performing category in the third quarter of 2009, largely on the back of the government’s “Cash for Clunkers” program.
Nikesh Arora, Google’s president of global sales operations and business development, said he still believes U.S. auto spending is poised for growth, largely because of the age of U.S. fleet and the shift of dollars to the web.
But many collision shops still don’t have a Web site at all, which is a huge mistake, says former shop owner David Moore, founder and president of CollisionBuilder.com, a Web site design firm. According to Moore, more than 80 percent of consumers between the ages of 33 and 54 research online before they buy a product or service, so if you have no online presence you could be missing opportunities.
“They don’t realize how vital a Web site is,” Moore says. “I consider the Web site to be the foundation of any good marketing program.”
If you own a colision repair shop and plan to be in business 5 years from now, you need to invest time creating or reviewing your business website. You should also check out business websites outside of the collision repair industry because you’ll get fresh ideas.
Also, just because the web is a relatively new tool, doesn’t mean you don’t need to remember time-tested basic principles of marketing. Dale Carnegie’s How to Win Friends and Influence People is one of the bestselling self-help books ever and is just as useful today as it was when it was first published in 1936. It has sold 15 million copies globally. Cargengie’s book and courses teach basic common sense techniques to help people win friends and influence others. The same techniques apply to the web today. Your website can use the same simple and common sense approach to make it easy for potential customers to say YES to your collision repair shop.
Few people take the time to research a collision repair shop in advance. Your web site must gain the trust of visitors, quickly and easily. How might you get some great ideas and exposure at the same time?
Look around. High school students are very web savvy these days. Invite some students and their teachers to help you. Give them a tour of your shop explaining the entire process of repairing a car. Show them your equipment and how it works. Explain how the procedures your shop takes to be environmentally friendly. Explain the challenges with aftermarket parts vs OEM parts. Explain the challenges you encounter with insurance companies. Invite the students to bring their high tech cameras and video recording technology so they can then share the information with others so as to allow input from lots of people. Most high schools have a student newspaper and of course they would be invited to cover the event.
You might invite the students to find a worthy cause to help in this project. Possibly there is someone in the community such as a wife and family of a veteran in Afghanistan and they have a car in need of repair. Possibly there is someone in the local community that is experiencing a financial hardship and their car needs some dents fixed and a paint job. If you invite some enthusiastic young people to get involved in a project that will help someone in their local community, there will be payback.
Figure out a way for everyone to win. As the project progresses post the progress on your site. Include lots of photos of those helping you. With a little imagination and enthusiasm you can see how someone can take an idea like this and position themselves very favorably in the community. Doing so will result in terrific exposure for your business. Your employees will be excited and proud to be part of the experience.
Some good sites I’ve come across that might serve as examples are the following: Joe’s Collision, Body Work & Detailing in Dallas, TX has a great looking site. One look at it gives an immediate impression of high quality professional work. It’s easy to read. It’s got a great colors and powerful testimonials with very professional photos. Check it out at www.joescollisionanddetailing.com.
Len’s Auto Body in Oceanside, CA, has an impressive site with logos from equipment manufactures as well as I-CAR and ASE giving visitors a feeling that it’s a shop that can be trusted to do high quality work. When a visitor clicks on “Shop Tour” a slide presentation begins and shows a variety of photos of his shop and equipment. He also includes a photo of his custom PT Cruiser advertising his shop which is another very creative method of gaining additional consistent exposure. He’s taking advantage of the popularity of that vehicle plus the custom paint job to draw attention to his business. His web site is a nice clean easy to use site that creates a favorable impression to visitors. Visit his site at www.lensautobody.com.
Daland Body Shop of South San Francisco is another excellent example. This website also has a video that begins playing as soon as the site is clicked on. I tend to favor site that use the video technology. Video is the next best thing to an owner telling a potential customer the selling points. The thing is though a video never has a bad day, it’s never tired and it’s available to give that same enthusiastic and professional message 24 hours a day. Visit this site at: http://daland-autobody.com
Don’t overlook the importance of appealing directly to female customers. There’s good evidence that women are in the majority of collision repair customers. Certainly they control the largest share of a family’s budget. There are companies that cater directly to shops by helping to make them more female friendly, such as AskPatty.com, which brands sites as female friendly. See http://femalefriendlydealer.askpatty.com/?d=Js_Auto_Body, for example.
“Up until now, like many automotive businesses, we thought the obvious goal was to ensure that women were treated the same as men. Through the AskPatty program, we’ve learned that treating women the same as men does not necessarily yield the [best] experience for women. This may not sound profound, but with an increased awareness of what elements women seek in a positive automotive servicing experience, our service centers are better prepared to meet and exceed the expectations of our female customers” stated Mark Kim, Operations Manager, J’s Auto Body, in Lanham, MD.
With just a little imagination it’s easy to see how a project like this could be a lot of fun for everyone involved. Above all, don’t be afraid to experiment.
I don’t trust anyone anymore.
Everything seems to be either poisonous or falling apart. And I’m not talking only about products made in China. On behalf of my four train-owning grandchildren, I have returned 19 Thomas the Train engines because of lead in the paint. Nothing ruins a play date more than a toxic toy.
In bowling, when two pins on either side of the alley are left standing after the first roll, it is called a split. Do you know how difficult it is to knock down both pins when you have the most difficult split? Less likely than making a hole-in-one in golf.