FenderBender - April 2017 by EndeavorBusinessMedia-VehicleRepairGroup

FENDERBENDER.COM / APRIL 2017

ONE CASH-STRAPPED STARTUP’S QUICK RISE PAGE 4 8

MAKE INSURANCE RELATIONSHIPS WORK

PAGE 6 3

Strategies & Inspiration for Collision Repair Success

MOMENTS

Inside two business transformations that each started with one, simple ‘pivot’ PAGE 3 0

GET A TANGIBLE RETURN ON FACEBOOK ADS PAGE 4 6

GIVE EMPLOYEES ‘CAREERS,’ NOT JOBS PAGE 52

Finding a Return Daniel and Loraya Inez took a risk in revamping their business model— and it paid off.

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TA B L E O F CO N T E N T S

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PROFILE

36 RENAISSANCE MEN

Dan Reichenbach and Charlie Fought have pushed Portland's Pacific Service Center to new heights by diversifying its offerings and services far beyond collision repair.

PHOTOGRAPHY BY KEITH BERSON

BY KELLY BEATON

The New College Try While earning their MBAs, Dan Reichenbach, left, and Charlie Fought purchased a body shop. Ten years later, they have a $4.43 million business.

April 2017 | fenderbender.com 3

TA B L E O F CO N T E N T S

APRIL

'Lady with the Camera' CARSTAR Mundelein's Marian Rodriguez is a fixture at community events, camera in tow.

F E AT U R E

C A S E S TU DY

S H O P TA L K

TURNING POINTS

Two shop operators share their transition stories—seemingly simple tweaks to their business models that led to rapid growth. BY TRAVIS BEAN

FALSE START, FAST RISE

Cash-strapped but determined to set up a family business to last generations, John Terrizzi Jr.'s dream of a multi-facility collision repair network nearly fizzled before ever getting off the ground.

MARKET CARE

A look inside the day-to-day of Marian Rodriguez's unique, community-based approach to her role as business manager at CARSTAR Mundelein. BY TRAVIS BEAN

Printed in the U.S.A. COPYRIGHT ©2017 BY 10 Missions Media LLC. All rights reserved. FenderBender (ISSN 1937-7150) is published monthly by 10 Missions Media, LLC, 571 Snelling Avenue North, St. Paul, MN 55104. FenderBender content may not be photocopied, reproduced or redistributed without the consent of the publisher. Periodicals postage paid at Twin Cities, MN, and additional mailing offices. POSTMASTERS Send address changes to: FenderBender, 571 Snelling Avenue North, St. Paul, MN 55104. 4 fenderbender.com | April 2017

PHOTOGRAPHY BY KIMBERLY FROST

BY KELLY BEATON

Expansion Effects Wizard Werks more than doubled in size when moving to its current location.

QUICKFIX

The technology affecting shop life

U.S. effects from Euro NCAP testing

Examining DRPs and customer perception

A year-round recruiting plan to prevent hiring mishaps

Reduce turnover rates by creating clear career paths for employees

Fix Auto Express Gresham's quickrepair model

PAST THE PAGE

ANALYSIS

Super sessions revealed

Mitchell's AI push

CONFERENCE NEWS

PHOTOGRAPHY BY MIKE WHEALAN, THINKSTOCK

S T R AT E G Y

AWARDS INSIGHT

Building a top-level paint team

DRIVER'S SEAT

Embrace change

VIEWPOINT

LIGHT HITS

State Farm's profits plunge $7 billion

SNAP SHOP

Wizard Werks European Auto Repair & Body Shop

NUMBERS

HOW IT WORKS

Stat-Gun from ProStat LLC

THE BIG IDEA

The steps to true leadership BY KEVIN RAINS

IDEA SHOP

SALES +MARKETING

The keys to ensuring a substantial return on your Facebook advertising

LEADERSHIP

ON THE BUSINESS The dangers and risks of dataâ&#x20AC;&#x201D; and your simple solution BY MIKE ANDERSON

UPDATE

IN THE TRENCHES

Finding a way to make insurance relationships work BY DARRELL AMBERSON

INNOVATIONS

Tom & Ed's Autobody 's unique bumper racks

April 2017 | fenderbender.com 5

TA B L E O F CO N T E N T S

ONLINE EXTRAS

CLICK ON THE LOGO BELOW FOR PRODUCT INFORMATION

Axalta Coating Systems

Hyundai Motor America

Polyvance

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Innovative Tools & Technologies

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Kia Motors America

SATA

ChemSpec USA

Mitchell International

Sherwin-Williams

Estify

O'Reilly Auto Parts

U-POL

6 fenderbender.com | April 2017

EDITORIAL

Bryce Evans Editorial Director Anna Zeck Managing Editor Travis Bean Associate Editor Kelly Beaton Staff Writer Tess Collins Custom Content Producer Kathleen Sandoval Web Content Producer Melissa Steinken Editorial Intern Darrell Amberson Contributing Writer Mike Anderson Contributing Writer Kevin Rains Contributing Writer

EDITORIAL ADVISORY BOARD

Elissa Larremore CBS 1 Collision Robert McSherry North Haven Auto Body Steven Morris Pride Collision Centers Mark Probst Probst Auto Body Randy Sattler Rydell Collision Center

ART AND PRODUCTION

Zach Pate Art Director Nick Spaeth Senior Graphic Designer Fue Vang Graphic Designer Becca Sugden Graphic Designer Leah Quinto Production Artist

SALES

Chris Messer Publisher 651.846.9462 / cmesser@10missions.com Andrew Johnson National Advertising Sales 651.846.9459 / ajohnson@10missions.com Matt Mortinson Regional Advertising Sales 651.846.949452 / mmortinson@10missions.com Melody Todd Regional Advertising Sales 651.846.9468 / mtodd@10missions.com Carolyn Young Regional Advertising Sales 651.846.9468 / cyoung@10missions.com Jen George Client Service Specialist 651.846.9465 / jgeorge@10missions.com

10 MISSIONS MEDIA

Jay DeWitt President Anders Seefeldt Marketing Communications Specialist Mariah Straub Sales Service Supervisor Meghann Moore Sales Service Representative Katie Cornet Event and Special Projects Coordinator Josh Resch-Lien Digital Marketing & Multimedia Assistant HOW TO REACH US 571 Snelling Avenue North, St. Paul, MN 55104 tel 651.224.6207 fax 651.224.6212 10missions.com SUBSCRIPTION SERVICE tel 800.869.6882 fax 866.658.6156 subscriptionservices@fenderbender.com The annual subscription rate is $72 (U.S.A. only) for companies not qualified to receive complimentary copies of FenderBender. BACK ISSUES Past issue single copies are $8. Go to fenderbender.com/backissues LETTERS TO THE EDITOR letters@fenderbender.com ARTICLE REPRINTS For high-quality reprints or e-prints of articles in this issue call 651.846.9452 or email reprints@fenderbender.com.

April 2017 | fenderbender.com 7

STOP MANUALLY REKEYING ESTIMATES.

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FAC E B O O K

Shop Innovations

We like the dual version (“Battery-Powered Workstations,” February 2017). Also, if you do a battery-powered printer, you can eliminate the battery in the bottom. Shannon Blevins Regional director, Classical Collision Atlanta-metro area, Ga.

Apps that Improve Your Business

FenderBender associate editor Travis Bean asked the FenderBender LinkedIn group: From customer service to finances to operations in general, is there any app that makes shop owners’ and employees' lives easier? Join the conversation at fenderbender.com/technap

Vehicle Technology Effects

The smarter an automobile gets, the more people will take its safety for granted (“2016 Motor Vehicle Deaths Highest in 9 Years”, February 2017). We need to bring back the days when an alert driver is forced to be a safe and defensive driver. Too many so-called safety features are making the everyday driver lazy.

PODCAST

COURTESY SHANNON BELVINS, THINKSTOCK

Anthony Cartesio Owner, Precision Collision and Detail Center Pocono Lake, Pa.

Future of Consolidation

You note the goal of the MSO's is for a 20 percent market share (“Consolidation's New Trend,” February 2017). What happens then? Can they just reset and go for 30 percent market share? The reason I ask is, where I come from—Australia—two companies combined that are well past 20 percent of market share already. Is there a glass ceiling? Russ Hill Sales Consultant, Crashzone Brisbane, Australia

COLLISION C A S T

In the April edition of CollisionCast, FenderBender editor Bryce Evans sits down with Shawn Crozat of Dan's Auto Body to discuss how solving one of the industry's largest issues reignited his business's growth. Listen now at fenderbender.com/CollisionCast

fenderbender.com fenderbender.com/facebook twitter.com/fenderbendermag fenderbender.com/linkedin instagram.com/fenderbendermag April 2017 | fenderbender.com 9

THE MITCHELL 2017 ROAD SHOW HEADS TO

CALIFORNIA

Two California shop owners explain how Mitchell Parts is boosting their business.

On Feb. 21, The Mitchell Road Show made its way through California and made a stop at Greg Solesbee’s Solesbee Auto Crafts in Yorba Linda. The business has been family-owned and operated since 1969. Solesbee says that his parents’ dedication early on and devotion to customer care allowed the business to grow. Solesbee’s parents, both 80, are still involved in running the shop, and the family has seen the shop grow from a spray booth made out of a chicken coop in the backyard to a 22,000-square-foot shop that employs 40 people and sees 55–60 vehicles per week. The Solesbee family’s dedication spills over into all areas of the business. That’s why the Solesbees asked to be involved in reviewing and giving feedback to Mitchell on its products. “We have quite a bit of insight when it comes to sizing up issues and wanting to make things better,” Solesbee says. “I talked to my Mitchell rep, Luke Burger, about it. I wanted to have influence in how things are designed and developed.” Mitchell is dedicated to making its products user friendly and values its customers’ insights, and shortly after the conversation, Solebee Auto Crafts became a beta test facility for Mitchell Parts powered by uParts, Mitchell’s parts procurement solution. “Creating a system that allows us to order all of

our parts from one spot is great,” Solesbee says. “The direction that Mitchell is headed shows us that they care about body shops.” One of the latest offerings from Mitchell, Mitchell Parts allows users to transfer parts information to and from UltraMate without the need for rekeying. Solesbee says it has streamlined the parts procurement process and his staff agrees. “Mitchell Parts is the best organized and most efficient way to order and track parts,” says Chad Faulkner, repair planner at Solesbee Auto Crafts. “You only have to go to one program for all of your parts needs. It makes communication with vendors simple. It makes you aware of any problems or delays by sending out emails right away so they can be handled quickly. Never again will you find out at the end of a repair that you have parts problems.” Another reason Solesbee enjoys working with Mitchell is the support he receives. Solesbee says that Burger, his Mitchell rep, is always there for him to make sure he has a positive customer experience. “Mitchell has done a good job making sure that their users know that they care about the experience that they have,” Solesbee says. “They want their user to be included in the growth of their company and they want to solve real world problems. I think they do that better than anybody.”

A few days later, the Mitchell Road Show headed to El Segundo to visit another early adopter of Mitchell Parts, Jim and Jack’s Collision Center. The shop, which is celebrating its 50th anniversary this year, takes up five city blocks, works on 450–500 cars per month, and employs 100 people. When Richie Kizinin took over the shop in 1998, he knew he wanted to take the shop to the next level, but it’s easier said than done with a shop as massive as his. “You have to keep up with all of the new technology,” Kizinin says. “I’m always juggling to be one step ahead of the industry. I want to be an innovator.” Kizinin says his goal as a business operator is to create a shop environment in which people are passionate about their work—and that other businesses would aspire to replicate. Part of that is to be constantly evolving and finding ways to improve business operations. In an effort

to be on the cutting edge, Kizinin’s shop was one of the first to use Mitchell Parts. The aspect that he likes most about the system is the transparency. “It allows you to see exactly what’s going on with your parts,” Kizinin says. “You can see exactly when a vendor opens your package.” Kizinin says Mitchell Parts has increased his shop’s profitability because it’s allowed him to see margins that he’s hitting with specific vendors. “It makes the parts ordering and business aspect more transparent,” Kizinin says of Mitchell Parts. “The tools available are endless. You can see how much money you’re making, how long it’s taking with specific vendors. If you dissect the product, you’ll be blown away by what information is out there and what’s readily available for you. You can see which lines are helping or hurting your business.”

The 2017 Mitchell Road Show made its way through California in February, stopping first at Solesbee Auto Crafts in Yorba Linda before making its way to Jim and Jack’s Collision Center in El Segundo.

Make sure to stay tuned for Mitchell’s next Road Show stop, in New Jersey. mitchell.com/usroadshow

2017

T H E

L A T E S T

N E W S

O N

T H E

F E N D E R B E N D E R

M A N A G E M E N T

C O N F E R E N C E

Forward Thinking The goal of the conference's two Super Sessions is to provide attendees with a deep dive into a topic with strategies and concepts they can implement right away.

FENDERBENDER STAFF

Registration for the 2017 FenderBender Management Conference, held Sept. 27–29 at the Westin Lombard near Chicago, is now open at fenderbenderconference.com. Early bird prices are available for a limited time.

Super Sessions Announced

For the third straight year, the FenderBender Management Conference will host leading shop operators and industry experts from across the country to tackle the industry’s most pressing issues. One way the conference will do so is through in-depth Super Sessions, which allow attendees to dig deeper into proven strategies to create real change in their shops. This year’s Super Session topics include “Profitability Bootcamp,” a no-nonsense guide to maximizing margins and setting your business up for sustained success, and a look at the modern workflow solutions one leading independent shop operator has embraced to compete in a changing industry landscape. Both speakers will be revealed soon. Be sure to check out fenderbenderconference.com for more information and future updates.

April 2017 | fenderbender.com 11

NOW THERE ARE TWO WAYS TO GET WITH THE PROGRAM. OEC collisionlink is now part of the Hyundai Go Genuine™ Collision Conquest program. ®

Get in touch with your Hyundai dealer today and learn more about this exciting program. You can also contact OEC at 888-776-5792 or oeconnection.com. OPS (Overall Parts Solutions) can be reached by calling 877-873-8729 or by logging on to opstrax.com. For Hyundai Genuine Parts, at competitive pricing, get with the program. What it will do for your bottom line is the best part of all.

FINES HE

AWARDS CO

LLI

MARK PERSAVICH

Nominate Today

FenderBender Awards Insights feature past FenderBender Award nominees. To nominate an inspiring collision repair professional, or for more information, go to fe nde rbe nde raw ards .com .

AWARDS INSIGHT

P SION RE

AWARDS NOMINEE

MARK PERSAVICH REFINISHING TECHNICIAN CITRUS KIA CRYSTAL RIVER, FLORIDA

Mark Persavich has been in the collision repair industry since the 1970s. And, over the years, the respected refinish technician has developed an exacting personality that demands excellence of himself. The reason for Persavich’s approach is simple: It’s the only way to thrive in his profession. If you get lackadaisical as a painter, the comebacks can add up, and stress can mount. Persavich, who was nominated for a 2016 FenderBender Award, sounds rather at ease these days. And it’s understandable, considering he has seldom had a comeback in his roughly three years working for his current employer, Citrus Kia in Crystal River, Fla. “You’ve got to be pretty picky with your work,” Persavich explains. “If you’re not, you’re not going to last long at all. You’ve got to give it that extra step, have a little pride.” “In all my years doing this, he’s probably the top painter I’ve ever seen, for color matching,” says Denny Johnson, body shop manager at Citrus Kia, who also commends Persavich’s training aptitude. Persavich provides his tips for getting painters to provide maximum value to their shops. A S T O L D T O K E L LY B E AT O N

FUE VANG

Foster a Teaching Environment

Even the occasional comeback can disrupt a shop, Persavich says. Thus, it’s in everyone’s interest to get young painters up to speed swiftly. “Let’s just say you’re painting one panel,” he says. “If something’s wrong with it, you’ve got to re-do it, and, the more times you’ve got to re-do something, the worse it gets.” That’s why Persavich suggests having young painters take notes and glean as much advice as possible during the first 3–5 years of their careers. Learning to color match by viewing vehicles in natural lighting, or using an acetone to avoid issues with metallics? Those are lessons

typically learned through studying the habits of experienced co-workers, he notes. “It’s all about preparation,” Persavich says. Hire for the Hungriest

The main lesson Persavich stresses when he tutors young painters: Outwork everyone. He feels the best way to get budding painters up to speed quickly is by stressing the importance of logging as many on-thejob hours as reasonably possible early on. “You can never really learn too much,” Persavich says. “Because, if a painter starts getting comebacks, and they don’t even know how to take care of them … that hurts [co-workers]. You’ve got to know how to get yourself out of trouble.”

Utilizing Advisory Boards

Persavich has served as an advisory board member for nearly two decades at Withlacoochee Technical College in Inverness, Fla., occasionally aiding in collision repair education at a school where his brother, Allan, is an instructor. The painter donates his time, working with students on mixing and tinting colors. Persavich says serving on the advisory board has been valuable in the respect that it helps keep him updated on industry trends. Another perk: Advising at the local technical college allows him to scout for possible apprentices for Citrus Kia. April 2017 | fenderbender.com 13

D R I V E R ' S S E AT

‘COMPLACENCY IS EVIL’

‘Complacency is Evil’

B R YC E E VA N S EDITORIAL DIREC TOR b e v a n s @10 m i s s i o n s . c o m

Never stop looking for ways to improve but the parent company that produces FenderBender and all its ancillary platforms and products is 10 Missions Media. And, yes, we really do have 10 missions that act as the foundation for the way we operate. (It’s not just a clever name.). I only point this out because our fourth mission fits very well with our cover story this month (“The Art of the Pivot,” page 30). That mission? Complacency is evil. Hopefully, as our reader, you’ve seen firsthand how we live up to this with steady and regular improvements to all we do. The moment we stop improving is the same moment we fail in serving you, our readers. Our cover story, written by Associate Editor Travis Bean, profiles two shop operators who took this mindset to heart, took calculated risks in “pivoting” their business models, and took their operations to all new levels of success. I don’t want to give away too much (and I highly recommend you read it in its entirety), but I wanted to share one quote from Andrew Winston, author of The Big Pivot, who summed the story up very nicely with a simplistic approach all of us can take each day: “I think it’s important to ask yourself, ‘Why have we always done it that way? Why don’t we do it this way?’” What’s your answer?

NICK SPAETH

Some of you likely know this already,

April 2017 | fenderbender.com 15

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NEWS

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TRENDS

quick fix ANALYSIS VIEWPOINT LIGHT HITS SNAP SHOP NUMBERS HOW IT WORKS

MIKE WHE AL AN

High-End Clientele Wizard Werks' branding primarily focuses on the makes the shop specializes in, including BMW, Audi and Ferrari. â&#x20AC;&#x201D; PAGE 24

April 2017 | fenderbender.com 17

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A N A L Y S I S

THE U.K. EFFECT

Changes caused by Euro NCAP safety tests often carry over to the U.S.—here’s what you can expect BY TR AVIS BE AN

PHOTO COURTESY OF CCC

A 1997 Rover 100,

traveling at 40 mph, smashes head-on into a wall. This demonstration is followed by a 2017 Honda Jazz, a vehicle roughly the same size, traveling at the same speed, hitting the same wall. Yet, the results couldn’t be more different. Despite a fairly roughed-up front end, the crash test dummies in the Jazz appear to be safe and sound. The same cannot be said for the passengers of the Rover 100, which is left unrecognizable after the crash. The 20-year difference between the models highlights the impact of Euro NCAP (New Car Assessment Programme)—a vehicle safety rating system Thatcham Research joined in 2004—in the United Kingdom. This demonstration, housed on Thatcham’s YouTube page, highlights the impact safety tests have made in the U.K. This, according to Matthew Avery, head of research for Thatcham, is notable for the U.S. collision repair market, as the changes required by Euro NCAP often cause delayed ripples in the U.S.

“Our standards tend to be two years ahead of the U.S. market,” he says. The latest standard? Combining crash test ratings with crash avoidance ratings— which may be in the U.S.’s future. David Zuby, executive vice president and chief research officer of the Insurance Institute for Highway Safety (IIHS)—one of two major U.S. safety-rating systems— closely collaborates with Euro NCAP, and says monitoring U.K. safety ratings can prepare shops for collision repair trends coming down the pipeline. AEB Requirements Thatcham reported that the rigorous Euro NCAP testing has prevented more than 182,000 deaths and injuries on U.K. roads, and a 63 percent reduction in car occupants killed and seriously injured, from 23,000 in 1997 to 8,500 in 2015. Avery credits that success to “raising the hurdle,” meaning Euro NCAP requires vehicles to meet ever-increasing safety standards each year to earn five-star ratings.

NCAP’s latest requirement? All vehicles manufactured post-2014 are required to feature automatic emergency braking (AEB). However, AEB is not standard in the U.S.—yet, Zuby says. At the moment, the U.S. NCAP (the National Highway Traffic Safety Administration’s system, which the U.K. model is based on) only “recommends” vehicles be equipped with AEB, exempting the feature from its rating system. IIHS recently required it for vehicles to be named “Top Safety Picks.” “Last year, NHTSA put out a request for comments for rolling together crash test ratings with crash avoidance ratings,” Zuby says. “Those changes they’re proposing for U.S. NCAP would be instituted in 2019.” Accessible Repair Information A market dealing with fewer crashes, Avery says, will be offset by more complicated, expensive repairs that require deep knowledge of auto manufacturers’ repair specifications. The only problem? That information isn’t always easily accessible, Zuby says. While some states requires information be available to independent shops, it’s not a widespread requirement like it is in the U.K. Zuby there’s a lack of pressure on OEMs and insurance companies from the collision repair industry to make the availability of that information standard. Miller says the U.K. should serve as a model for the U.S., as the Euro NCAP successfully fought to require accessible repair information—such as recalibrating sensors for AEB systems—for all U.K. shops. He believes the push will need to come from an unified voice that represents the industry. “You’ll really need to pressure manufacturers and insurers to demand this information is provided excessively and easily in a clear manner,” Miller says. April 2017 | fenderbender.com 19

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V I E W P O I N T

So you’re assisting, not replacing.

MITCHELL’S NEXT FRONTIER The software provider looks to embrace technology in 2017 BY F E N D E R B E N D E R S TA F F

In late October 2016, Mitchell International launched Mitchell Parts, a fully integrated parts procurement solution offered to all collision repair shops and their existing suppliers, in partnership with cloud-based parts procurement company uParts. The move is part of a broader focus for the company on embracing technology and delivering superior tech platforms for all segments of the collision repair industry. Jack Rozint, Mitchell’s vice president of sales and service for its auto physical damage segment, sat down with FenderBender to discuss the numerous ways Mitchell plans to leverage new technology in 2017.

THINKSTOCK

Why did Mitchell decide to go with a cloud-based platform when developing Mitchell Parts?

This is part of a much broader effort on moving all of our technology into the cloud over the next year. So, our estimating system is going to be moved to a complete cloudbased platform, and we’ve got a number of new products, some of which haven’t been announced yet, that are part of a very exciting portfolio that we’re building. Mitchell Parts is a key part of this, because, as you know, parts, depending on who you talk to, are at least 45 percent of collision repair costs. And it’s a huge part of throughput. Late last year, Mitchell announced a partnership with UK-based artificial

intelligence developer Tractable to do a review project that offers vehicle crash analysis based on photos. Have you heard feedback from shops on this idea?

We’ve received pushback, of course. Any time you are talking about photos and estimates, the immediate pushback is you cannot write an estimate from photos. And we understand that the correct way to write a complete assessment of damages after the vehicle is torn down is by an experienced damage appraiser and there’s no substitute for that. But what this technology is doing is it’s actually supplementing human decision points all along the process just to make better decisions. For example, say all an insurer has to operate on is a cell phone picture of a car— the first notice of loss on a claim—from a tow truck driver. So wouldn’t it be nice if that car could run through a process that comes out and says, “You know what? Given all of this input about a tire that’s blown, an airbag deployed, and the analytics of the photo, there’s a high likelihood that this is going to triage as a total loss. And don’t take that car to my repair facility, where it’s going to end up sitting in the yard and I’m going to be asked to do conditioning on it, I’m not going to get any revenue on it and it’s going to take up a parking space for two weeks.” So it’s that kind of ability to assist human decision making along the process.

Yes. And when people say that, I say show me a fender, bring in 10 insurance appraisers, 10 independent appraisers and 10 shops and have them all tell me whether it’s a four-hour panel or an eight-hour panel. The range is going to be very broad. So what if there was a way to use 50,000 or 500,000 pictures of that same exact car’s panel that had been estimated and repaired in the last 10 years to tell you that the likelihood, based on the analytics of that damage, that one is probably going to end up being replaced. Why was the time right for Mitchell to begin investing in this type of technology?

The thing that’s very clear right now, and I know a lot of repairers have concern about this, but the millennial generation, they like the idea of taking their cell phone out, snapping pictures, sending them to the insurance company and having that be the way their claim gets started. And that’s not going to change. If you look, there are J.D. Power studies about it and other studies about claims satisfaction. And there’s a good percentage of the population that wants to initiate their claim and self-manage their claim through their cell phone. It’s OK not to like the idea, but it’s reality. So the question is, how can we bring that bestof-breed technology into that process to ensure that the correct decisions is made based on those cell phone apps are the best ones? At Mitchell we’re all about one thing at the end of the day, which is getting the car repaired properly based on the right information, with the right people at the right time, supporting good decisions. But to the people who say they don’t want anything to do with the vehicle owner taking pictures on their cell phone as part of the process, the toothpaste is already out of the tube on that one. April 2017 | fenderbender.com 21

QUICKFIX

LIGHT HITS

STATE FARM PROFITS PLUNGE AFTER $7B AUTO UNDERWRITING LOSS State Farm's annual profit fell 94 percent on car insurance claims costs, Bloomberg reported. Net income dropped to $400 million from $6.2 billion in 2015, when results included

one-time gains in the stock portfolio tied to pharmaceutical deals, the company said in a statement. The underwriting loss from auto insurance widened to $7 billion from $4.4 billion. State Farm’s net worth, a measure of assets minus liabilities, climbed to $87.6 billion on Dec. 31, 2016 from $82.7 billion a year earlier. The boost includes a $4.2 billion increase in the

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22 fenderbender.com | April 2017

property/casualty units’ stock portfolio. State Farm’s “highly unprofitable auto insurance results should provide further room for the industry to raise auto insurance rates. We would view this as a favorable tailwind for the other major auto insurers, such as Geico, Allstate, and Progressive Corp.,” Jay Gelb, an analyst at Barclays Plc, said in a note to investors. “Improved pricing should eventually lead to better auto insurance underwriting margins, which have been negatively affected by increased claims cost inflation.”

CCC COMPLETES SALE TO ADVENT INTERNATIONAL Advent International has agreed to acquire CCC Information Services from Leonard Green & Partners and Texas Pacific Group (TPC). The transaction is expected to close early in the second quarter of 2017. No financial terms were disclosed. JPMorgan Chase served as financial advisor to CCC. Jefferies and Nomura served as financial advisors to Advent. CCC Information Services Inc. had reportedly been mulling a sale that valued the company at $3 billion, more than five times what it was bought for three years ago. Leonard Green agreed to buy CCC from Bahrain-based Investcorp SA in November 2012 in a deal which fetched Investcorp and its backers more than $550 million in proceeds, according to a statement at the time. The firm then almost immediately sold a 50 percent stake in the company to TPG, with plans to expand in Asia. “We want to thank our partners LGP and TPG for their tremendous support these past five years, and also welcome our new partner Advent as we begin this next phase of innovation,” said Githesh Ramamurthy, chairman and CEO of CCC. “Throughout our history, whether public or private, we have had one focus—delivering performance for our customers through industry-leading products and technology innovation, backed by the dedication and commitment of CCC’s associates. But the bar is being raised higher. With the pace of technology accelerating, we will see more change in the next five years than we have seen in the last fifteen. We look forward to working with Advent to bring new levels of value to CCC’s customers.” “We are delighted to have been associated with the CCC team over many years of uninterrupted progress and success and we are tremendously appreciative of CEO

News

For your daily collision repair news visit

fenderbender.com/lighthits

Githesh Ramamurthy and the rest of the CCC team for the outstanding job they've done,” said John G. Danhakl, managing partner of LGP. “We wish for and expect continued success for the entire CCC family supported by Advent, one of the best in our business.”

Repairability Concerns Nissan recently released a position statement regarding potential issues with bumper cover repairs.

NISSAN: BUMPER COVER REPAIRS MAY AFFECT BLIND SPOT WARNINGS Nissan released a position statement regarding blind spot warning (BSW) technology on its vehicles, stating it will not support any repair, body filler application or paint work on the rear bumper cover in the general area of the side radars. BSW was introduced to some Nissan vehicles in 2011. On vehicles equipped with this technology, the side radars responsible for triggering the warnings sit behind the rear bumper cover at both corners. In the statement, Nissan refers to its service manual, which states: "Do not attach a sticker (including transparent material), install an accessory or paint work near the side radar." “The damaged bumper cover should be instead replaced with a new bumper cover,” the statement reads. “In addition, since non-OEM bumper covers may vary in materials, build specifications, and fitment, and have not been tested by Nissan as far as compatibility with the BSW system, Nissan recommends replacing the bumper cover with a new Genuine Nissan bumper cover. Failure to adhere to these guidelines may cause the BSW system to not function properly, potentially causing serious safety concerns for our owners.”

COURTESY OF NISSAN

SERVICE KING REPORTEDLY CONSIDERING $2B SALE The private equity owners of Service King are considering a sale of the company, according to Bloomberg sources. Service King’s owners—Blackstone Group LP (which acquired a majority stake in July 2014) and Carlyle Group LP (which acquired the company in August 2012)—have reportedly had discussions with bankers about a possible sale process. The company could fetch more than $2 billion, the sources said. No final decision has been made and the firms may elect to keep the business. Blackstone agreed to buy a majority stake in Dallas-based Service King in 2014 for an undisclosed sum, as part of a recapitalization that saw Carlyle reinvest to take a minority stake.

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HOW DOES DRP USE IMPACT HOW CUSTOMERS VIEW A SHOP?

Customers don’t seem to have major qualms with direct repair programs, judging by FenderBender’s 2016 KPI Survey Does being associated with direct repair programs have a negative effect on customers? FenderBender’s 2016 KPI Survey largely suggests no, judging by the number of independent, single-location DRP shops (which made up the majority of the survey’s respondents) that claim high CSI and net promoter scores.

SHOPS WITH 1-3 DRPs

16.7%

CSI index of 90% or more

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SHOPS WITH 10+ DRPs

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CSI index of 90% or more

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QUICKFIX

HOW IT WORKS S H O P R E V I E W S O F C O L L I S I O N R E PA I R P R O D U C T S

THE DETAILS STAT-GUN FROM PRO-STAT LLC WEBSITE:

stat-gun.com TRAINING:

Limited in-person demonstrations USES:

Eliminates static on a vehicle surface COST:

$2,500 with a rental option of $160 per month

THE REVIEW:

An MSO vice president of operations reviews a gun that eliminates surface static

THE REVIEWER:

Eddie Dietz is the vice president and director of operations at Lefler Collision & Glass.

THE SHOP:

Lefler Collision & Glass is a family-owned MSO that has been around since 1952. The MSO has four shops in its network, three in Indiana and one in Kentucky. According to Dietz, the shop is always on the lookout for new technology, which is why the Stat-Gun from Pro-Stat LLC caught his eye. The Lefler team came across the Stat-Gun during a meeting with industry consultant and FenderBender columnist Mike Anderson. The product claimed to eliminate static on all substrates, allow metallics to lay down better, and achieve even coverage with less material. After the meeting, the staff decided to purchase a gun for one of its locations, but before it arrived, Dietz saw a live demonstration and decided to purchase three additional

28 fenderbender.com | April 2017

ones for the other locations because he was so impressed. “Any time we can eliminate or reduce a step, like buffing, that’s another car we can turn,” Dietz says. “For a high-production shop like ours, that’s huge.”

HOW IT WORKS:

The Stat-Gun has two wires at the end of it, one for positive ions and one for negative. When sprayed, this combination eliminates the static on a vehicle surface. The gun is plugged into a charging station, from which it is removed and taken into the paint booth. An airline is plugged directly into the gun and the painter pulls the trigger to release ionisation that is carried by the compressed air. The ionized air is invisible so there is a laser that shoots out of the end of the gun to serve as a visual guide. The dot is displayed on the surface of the vehicle where the air is being sprayed. The coverage rate is 6–8 inches on either side of the laser.

THE ROI:

Dietz says that the results have varied from shop to shop, but between all of his locations, the Stat-Gun has reduced buffing by 30–60 percent. That’s not only a time savings for the shop, it also ends up saving money when it comes to materials. Dietz adds that better color matches also eliminate the need for re-dos, which again saves on material costs and allows more jobs to go through the shop. Dietz has been using the Stat-Gun for a few months now, and he expects it will pay for itself within the year.

PHOTO COURTESY OF EDDIE DIETZ

STAT-GUN FROM PRO-STAT LLC

Dietz says the shop has played around with other methods of removing static over the years, like static chains, but that the StatGun works better than any of those. Dietz says that all four of his shops love it and that you would be hard pressed to find a painter in any of his locations that doesn’t take the Stat-Gun in the booth with them on every single job. The feature that has made the biggest difference to Dietz was the fact that using the gun results in better color matches— especially on plastic. “Before, if we were working on a car that got hit in the rear, we’d have to work on the quarter panel and the bumper,” Dietz says. “Before the gun, a lot of times and especially with metallic paints, we would finish painting and the plastic part would be slightly darker or lighter than the metal panel—even if we painted at the same time.” Dietz explains that this was due to the metallic paint standing up due to static on the surface of the plastic. The Stat-Gun eliminates the static, which Dietz says has resulted in better color matches.

COLUMNS

THE BIG IDEA KEVIN RAINS

What’s in Your Wake?

Becoming self-aware is the first step toward great leadership

THINKSTOCK, MICHAEL HOEWELER

As a young man I was very headstrong,

naive and lacking in self-awareness. I had plenty of self-assurance and confidence. But I didn’t have a clue about how I came across to others or how my actions, attitudes and words affected the people around me. In short, I was oblivious to what has been called my “wake,” those things we’re not aware of that agitate the emotional waters behind us. For most of my teen years I was told by friends and teachers that I had great “leadership potential.” Yet, I had no idea how to go from “potential leader” to “actual leader.” Now, looking back some 25 years later, it turns out the path is not really that big of a mystery. The biggest contributing factor to making the journey is self-awareness. Inexperienced leaders have what some leadership development experts call “unconscious incompetence.” That is to say, they don’t know what they don’t know. This especially applies to how their actions and attitudes affect the very people who look to them for guidance. To become a better leader, the next stage everyone must pass through is “conscious incompetence.” This is the hardest stage because you become keenly aware of what you don’t know. Here, blissful ignorance ends and you begin to realize you have to acquire new skills, mindsets, and knowledge. Of course, the goal is to get to the point of “unconscious competence,” where you just lead naturally by instinct and you don’t even have to think about the right course of action; you just know. I would encourage you to pause right now and think about where you are on this continuum and also where the people you are trying to develop are. I am convinced that the bridge between leadership potential and being a highly competent leader is self-awareness. Once we become aware of how our actions, words and attitudes move people—for

good or ill—we can then go to work on honing the parts of our leadership that need to improve. So, how do we gain self-awareness? Here a few of the top ways we can deliberately choose to become more self-aware and in the process, grow in our ability to lead others: 1. Ask those you around how you’re doing.

Ask them face to face if there’s anything you do or don’t do that helps them or hinders them. Ask them how you could become a better leader. Trust me: People around you will have an opinion on this if you ask sincerely with a desire to grow and learn. Another take on this is what is called a 360-degree evaluation. Those are obviously valuable but they are very time consuming and sometimes complicated. I recommend simply asking those you lead. It’s a simple, straightforward way to get plenty of feedback and things to work on. 2. Tests. There are all kinds of tests out there and most of them have a free or very low cost version on the internet to get you started. I like the StrengthsFinder, the Myers-Briggs, and the DiSC as great starting points. These tests will tell you how you’re wired and give you insight into preferences that you have that you might not even be aware

of. It will also start to answer questions about those around you and why they do some of the things they do. For instance, I’m an introvert. For the longest time I thought I had to be an extrovert to be a good leader. Turns out, introverts can make great leaders but they need time to refuel alone between engagements. A constant flow of people with little to no time to think wears introverts out. I’ve learned to take time alone to recharge my inner battery so I can engage better when the time comes. 3. Look for what bothers you in other

When do you tend to get frustrated with others behaviors? Those irritants are clues to areas that we might want to take a look at in ourselves. One of the greatest psychologists to ever live, C.G. Jung, said, “Everything that irritates us about others can lead us to an understanding of ourselves.” Knowing ourselves takes a lifetime and certainly can’t happen by reading a book—much less this column—or going to a seminar. It happens gradually, layer by layer like peeling an onion in the daily grind of leading our shops, having the courage to ask for others input, and then taking the time to honestly reflect on how we can grow. people.

KEVIN RAINS is the owner of CARSTAR Center City in Cincinnati and CARSTAR West Chester in West Chester, Ohio. He is also an industry consultant and founder of marketing website Body Shop 2.0. E M A I L : kevinrains@gmail .com A R C H I V E : f e n d e r b e n d e r. c o m /r a i n s

April 2017 | fenderbender.com 29

THE ART OF THE PIVOT TWO SHOP OPERATORS DETAIL THE MINOR ADJUSTMENTS THAT MADE HUGE IMPACTS ON THEIR SHOPS B Y

T R A V I S

B E A N

P H O T O G R A P H Y

30 fenderbender.com | April 2017

B Y

M A T T

G U I L L O R Y

XXXXXXXX XXXXXXX XXXXXX XXXXX XXXXXX XXXXX XXXXXX XXXXXX xXXX XXX XXX XXXXX XXX XXXXX.

Growing Pains Daniel (left) and Loraya (right) Inez took a chance on an outsideof-the-box idea to jump start their business.

April 2017 | fenderbender.com 31

F E AT U R E

THE ART OF THE PIVOT

There was a moment for Daniel Inez.

A seemingly minor idea that could have amounted to nothing, could have opened no new doors, could have been just another dead-end venture that failed to take his collision repair business anywhere. There was also a moment for Shawn Crozat. A tweak to operations that could have been a money pit, could have been too crazy to ever really work, could have caused his growing multi-shop network to hit a standstill. But here’s the thing: These moments— these pivots, if you will—instead took each business to new heights and territories. By taking a chance, by constantly trying to differentiate their business models, each owner hit on something that separated them from the competition. In Inez’s case, it was taking advantage of an untapped market to bring Dan’s Auto Body in Peabody, Mass., out of a van and into a 5,000-square-foot facility that today pulls in $3 million per year. For Crozat, it was creating a solution to the industry’s employee shortage to further grow his now 11-shop network. So whether it’s simply getting your business off the ground, or it’s setting your shop up for expansion, both stories highlight how one ostensibly inconsequential moment can go on to completely reshape your business. All it requires is the perseverance, courage and fortitude to turn those moments into game-changing decisions. 32 fenderbender.com | April 2017

DAN’S AUTO BODY — LOCATION:

PEABODY, MASS. SHOP SIZE:

5,000 SQUARE FEET STAFF SIZE:

7 AVERAGE MONTHLY CAR COUNT:

60 ANNUAL REVENUE:

$3 MILLION

THAT’S A WRAP

HOW DANIEL INEZ FOCUSED ON CUSTOM WORK TO BUILD HIS DATABASE AND INTEGRATE INTO THE COLLISION REPAIR MARKET

“Why would you want to do that?” Back in 2012, that was—and to this day remains—a legitimate question. As co-owner of Dan’s Auto Body, Loraya Inez was right to challenge her husband, Daniel, on his crazy idea, especially considering their mobile business had yet to move from a couple Chevrolet Astro vans into

an actual collision repair facility. For one year, the newly married couple—who had just moved to Massachusetts to try their hand at the trade—had been doing what it could to get by, buffing out scratches and performing the occasional bumper job, building funds for an upgraded setting. And then Daniel had the idea: He wanted to focus on custom work. Which led to Loraya’s question, which you might also now be asking yourself: “Why would you want to do that?” In the grand scheme of revenue streaming in from collision repair work, Daniel admits that focusing on low-margin

The Big Pivot

Andrew Winston is the author of The Big Pivot, which was published in 2014 by the Harvard Business Review Press. In the book, he outlines several strategies successful businesses have used to shift their business models. “As the world continually changes, business owners need to be able to change and navigate through these thorny problems,” Winston says. “The ’pivot’ for a business owner is to not just think of their job as maximizing earnings in the short term, but to solve customers’ and the world’s problems in a profitable manner.” Winston spoke with FenderBender to highlight a few important components of successfully completing the art of the pivot.

Understand Your Place in the World Even if you run a small business, Winston says, you connect to or have a role in the biggest issues of the day—even large-scale items like a changing climate and energy and water use. “Thinking about how you connect with the community and the world can change your mindset,” he says. “If we thought about what we do for our customers but also helping to manage our energy and waste, what would we do differently? How would we think about our business?” Winston says this shift in mindset could lead you down a new path that not only creates a new process or proves more profitable, but also creates a great impression locally. “The people in your community will view you as a leader if you’re connected with the larger issues affecting everybody,” he says. CONTINUED ON PAGE 35

Switching Models Dan (far left) and Loraya (near left) Inez worked to build their small customerbase via custom work.

work involving vinyl wrap and Plasti Dip seems like a waste of time, energy and resources. But for him, it wasn’t about the margins—it was about the opportunity the work presented.

THE IDEA

The art of the pivot goes beyond the inception of an idea. Daniel says it involves weighing your options, evaluating your environment and, most importantly, asking questions and challenging the status quo. So, logistically, could vinyl wrapping become a sustainable model for the entire business? And could the Inezes abandon

collision repair and work toward an entirely new market? Possibly—but probably not, Daniel admits. However, Daniel had another set of questions he wanted to answer: Could custom work become an accent to the business’s model? “It wasn’t a huge investment for us to invest in the right materials and equipment,” he says. “Our name—Dan’s Auto Body—was still on the van, so people knew what kind of company we were.” Would it differentiate Dan’s Auto Body from the stiff competition in Peabody? “There were no other collision repair

shops in New England doing it,” Loraya says. “So it gave us an automatic edge over everyone else.” And above all else: Could this low-margin work lay the seeds for building a customer database that would one day facilitate a profitable collision repair business? “It’s not a huge moneymaker, but we thought, ‘If we do custom work on their car and they’re happy with it, down the line if something happens, they’re going to bring it back to us.’” It felt like a long shot at the time, the Inezes say. But they hoped that taking that small chance would return huge rewards. “It was us versus every other body shop in the area that had been in business for 30 years,” Daniel says. “So we had to try something different.”

THE PIVOT

The Inezes went all in on their idea. Relying heavily on their business’s Facebook and Instagram pages, the couple began to show off the visually appealing work their vinyl wrapping and Plasti Dip services offered. The key the entire time, they say, was the name that accompanied those posts: Dan’s Auto Body. “If people needed a fix and wanted to get work done, we were the go-to for them,” Loraya says. April 2017 | fenderbender.com 33

F E AT U R E

THE ART OF THE PIVOT

For two years, the couple performed the custom work, slowly accruing more and more minor collision work along the way. Daniel would repair, paint, sand and buff every vehicle himself, and Loraya would handle the estimates and financials. Business was slow at first, but the small, low-margin work soon began to pay dividends, causing, as Daniel puts it, a “domino effect.” “Say somebody comes in with a BMW and they do their whole car with a lime green wrap,” he says. “If they get into a car accident a year later, they almost have to bring it back to us, since we’re the only people that offer that and we did the job in the first place.” Since the Inezes’ clientele tended to own high-end vehicles, the custom work was starting to be accompanied with more expensive repairs, building to the point where it started bringing in more business than the couple could handle. “We had people contacting us from different states, just because they saw details and the quality of finishes we were doing,” Daniel says. They purchased one more van, hired one more staff member, all before they finally had accrued enough funds to move into their first facility two years ago.

Always Recruit With 11 shops in his network, Shawn Crozat understands the importance of having talent in his pipeline.

THE NEXT STEP

For the Inezes, their pivot resulted in a 5,000-square-foot facility that now staffs seven (including four technicians and one estimator), has an average monthly car count of 60 and an annual revenue of $3 million in its second full year as a nonmobile business. These days, custom work is a very small component of Dan’s Auto Body output and revenue, yet it still retains the eye-catching appeal that launched the business in a new direction five years ago—especially when your clients include players from the Boston Celtics and the New England Patriots. “Everybody is watching the Patriots game. So when Dion Lewis scored two touchdowns in the first quarter, we immediately posted photos on our page of the car we did for him,” Loraya says. “So now everyone is thinking, ‘If Dion can trust them, I can too.’” “All those long hours have really paid off,” Daniel says. “The vinyl wrapping work led to everything. Now we can learn how to lead a team and run a profitable shop.” 34 fenderbender.com | April 2017

THE MINOR LEAGUE

HOW SHAWN CROZAT IMPLEMENTED ESTIMATOR CLASSES AND TECHNICIAN APPRENTICESHIPS TO GROW HIS SHOP NETWORK

“We want to build our own future.” That seems like a pretty straightforward mantra for a business to adapt, right? Shawn Crozat thinks so. He says all businesses should be looking to grow talent from within, promoting its employees, handing out more responsibilities. However, Crozat’s pivot had to acknowledge one simple fact two years ago: His growing multi-shop network, G&C Auto Body, wasn’t fully committed to living by that mindset—in fact, he would venture most collision repair shops don’t either. To this day, Crozat still does his part to fix the technician shortage by working with area vocational colleges

and high schools in California. However, prior to 2015, connecting with schools was his only avenue for finding quality employees outside of job advertisements. And for his growing shop network, which had gone from three to six locations between 2011 and 2015, the inability to find quality employees— both estimators and technicians— would inhibit the company’s ability to grow effectively. “I see a lot of people talk about UTI and trade schools. I’ve seen shop operators say there should be a government initiative, or that there should be more classes at colleges for collision repair,” Crozat says. “What’s tough to realize is it’s up to us to fix the problem. And I don’t think all independent shop owners are willing to make the financial sacrifice for that.”

THE IDEA

Throughout the year, 30 different people

will sit in this classroom. Their ages range from early 20s to late 40s. Their scattered backgrounds stem from just about any profession that’s not collision repair. And they’re all here to become estimators at G&C Auto Body. In addition to working with schools, Crozat decided to invest the funds required to build his own in-house recruiting system, which involved creating a course that would weed out poor job candidates. Crozat hired his sister-in-law and former estimator, Tara, full-time to lead a four-week estimating class, which is offered every other month to job candidates at one of G&C’s locations (there are currently 11). The course is rigorous, intense, and more than half of the students fail to make it through. Crozat drew inspiration from a very common practice in the professional sports realm. “Every major baseball team has its own AA or AAA team,” he explains. “There’s a minor league to pull players from when you need them. So that was our thought, to build up our own farm league.” From technicians to estimators to managers, Crozat wanted to ensure that every future location would be equipped with employees dedicated to the G&C model. So he began putting together his farm team.

G&C AUTO BODY

— LOCATION:

11 FACILITIES IN CALIFORNIA STAFF SIZE:

215 AVERAGE MONTHLY CAR COUNT:

1,500 ANNUAL REVENUE:

$50 MILLION

CONTINUED FROM PAGE 33

Ask Heretical Questions

A big part is asking yourself heretical questions about your business, which Winston says has historically catapulted some of the world’s biggest companies (think Nike and Amazon) into unprecedented territories. “I think it’s important to ask yourself, ‘Why have we always done it that way?’” he says. “‘Why don’t we do it this way?’” While Winston has consulted for huge corporations, he says that asking heretical questions comes much easier for smaller businesses, which tend to be less reliant on “traditional” approaches to business and have more room to explore more progressive ideas. “As a collision repair shop owner, challenge yourself: ‘Why can’t we teach safe driving? Let’s be the guys that teaches everyone how to not get into accidents.’ “Keeping your car running smoothly, keeping it safe, how to use the safety features on autonomous cars—these are the progressive ideas that can move your business forward in a world that’s going to change.”

Talk to Stakeholders

The “stakeholders” in your business are your employees and customers. Winston says to regularly ask them what they think of your business’s role in the community and how you could improve. “Especially your millennial employees,” he says. “They might say, ‘Why do we always do it this way? Why aren’t we doing X, Y or Z?’ “And ask customers, ‘What do you think of how we’re running our business? How are we making your life better?’”

THE PIVOT

Crozat and his sister-in-law—one of the company’s top estimators at the time— not only formed a curriculum, but also brainstormed how to advertise it and, eventually, duplicate it for technicians. Their marketing approach was simple: Don’t just invite industry professionals, but bring in job candidates from all sorts of sales and administrative backgrounds. The kicker, and the key to ensuring they received quality applicants, was this promise: If you complete the program, you’ll earn a $65,000-$85,000 salary within two years of employment at G&C. “We don’t care if you have a college education or not,” Crozat says. “If you’re willing to put in the work, you’ve got a shot with us.” The four-week training course trains candidates in the business’s estimating and management software. Additionally, they spend time role playing, going through various estimating components through hands-on training with Tara and technicians in the shop. The estimator

students are also trained on all company SOPs. After graduation, the trainees are placed with a journeyman writer to be mentored until they are ready to go solo. A similar apprenticeship runs three times per year with technicians. During those periods, approximately 30 apprentice technicians—recruited from schools and job ads—are in rotation, spending 12 weeks under lead techs at each shop, refining their craft and studying SOPs. Crozat incentivizes job candidates by offering to pay for estimating courses and apprenticeships. Any new hires then go on a baseline salary, and can eventually earn the salary Crozat advertises. Likewise, mentors, who will undoubtedly lose efficiency during training, are compensated for the extra work.

THE NEXT STEP

The results have been phenomenal, Crozat says. While he invests heavily to run the

program each year, it’s been more than offset by the increases in efficiency and revenue at each of his locations. As he’s grown from six to 11 shops over the past two years and increased total annual revenue from $32 million to $45 million, he claims to have little problems outfitting new shops immediately with quality employees. Because of the program, the business has also seen several employees move quickly through the ranks, including a 26-year-old former estimator who now runs a $5.4 million shop. Crozat runs his ads year round, and offers his employees a $500 finder’s fee for any referrals that turn into hires. “When you’ve had two years of training under our curriculum, I know you’re not going to fail us,” he says. “That makes it worth it to me. I don’t want to trip over dollars to pick up pennies. I don’t want to have the chance for a new location and not have the people. So I look at it as having the right people in place at all times.” April 2017 | fenderbender.com 35

B Y

K E L L Y

B E A T O N

P H O T O G R A P H Y

B Y

C R A I G

M I T C H E L L D Y E R

The owners of Pacific Service Center are confident a wide range of services have their business primed for longterm success

P . 3 6

PORTFOLIO

36 fenderbender.com | April 2017

The Full Picture Dan Reichenbach (left) and Charlie Fought (right) have grown their Portland-area shop by focusing on a diversity of services.

April 2017 | fenderbender.com 37

PROFILE

DIVERSIFIED PORTFOLIO

HARLIE FOUGHT AND DAN REICHENBACH first

met in 2005, while pursuing MBAs at Willamette University in Salem, Ore., and considering how to turn money-making dreams into practical reality. Not long before their MBAs were completed, Reichenbach caught wind that the owner of Pacific Service Center—whom he knew through a vendor for which he previously worked—in nearby Portland was eager to sell his business. And Reichenbach was certain that he and Fought should pounce on the opportunity, despite little industry knowledge, particularly regarding the 18-wheel tractor/trailer combination vehicles the shop primarily repaired. “I’ll admit,” Fought recalls with a laugh, “when he approached me with this idea, my basic answer was, ‘What the hell am I going to know about trucks?’ … My background was completely the opposite of the body shop business. “So, I basically learned the trade while purchasing the company and getting my feet wet.” But the two had a long-term plan, and 10 years after purchasing Pacific Service Center (PSC), Fought and Reichenbach’s business is thriving with annual revenue sitting at $4.3 million. One key reason: Pacific Service Center’s unique diversity of services. Long-term viability as an independent operation relied on expanding the business and offering more reasons for customers—90 percent of which are fleet—to come to PSC, the two owners say. The transformation didn’t take place overnight; instead, it was an incremental push, as PSC slowly built its success and expanded its reach over a five-year period.

INTEGRATION PLAN

SERVICE ADDED

Fleet pick-up and delivery service YEAR IMPLEMENTED

2007 INVESTMENT

The implementation of this service occurred incrementally. Pacific Service Center (PSC) started with one tractor and one commercial driver and now runs nine tractors and 30 parttime and full-time drivers. 38 fenderbender.com | April 2017

From the day they took over at PSC, Fought and Reichenbach quickly embraced business “diversification” with open arms. A decade later, Fought and Reichenbach now oversee three PSC facilities (all in close proximity to Portland’s airport) offering a wide array of services. Because PSC’s work mix leans heavily toward fleet accounts, Reichenbach says that the shop is always focused on providing the highest level of customer service for its fleet partners. For example, if an account has 25 units requiring work, the shop is set up to handle that volume. “In the commercial world, time is money,” Reichenbach says. “Our customer base cannot afford to send a driver to drop off a unit for repair, [so] we developed a model that would allow us to do this for the customer.” In order to keep up with demands from

customers and cover overhead costs, PSC began to purchase its own equipment to transport trailers. Today, the shop has nine of its own tractors and 30 drivers, who utilize the tractors to pick up the trailers and bring them to the shop. In the rare cases where the units are not driveable, a subcontracted tow company brings them to the shop. ROI

The transportation arm is all about customer service, rather than a profit center, Reichenbach notes. PSC’s chief goal with its transportation department is to provide solid customer service and cover overhead. However, that added convenience and value proposition for customers has led to an increase in fleet accounts. “By transportation covering their expenses we can continue to offer free pickup and delivery,” the owner says.

Additional Services Pacific Service Center's vinyl graphics department includes a full-time graphic designer and dedicated space.

INTEGRATION PLAN

SERVICE ADDED

Vinyl graphics YEAR IMPLEMENTED

2008 INVESTMENT

PSC’s owners say that their total initial investment in graphics consisted of adding a graphic designer’s salary, as well as an installer’s wage, an Adobe suite software package, and a printer.

PSC—which has seen its annual revenue increase from $1.9 million to $4.3 million over the last decade—added graphics to its business offerings because the shop had been outsourcing that service to other companies for a prolonged period. That made it difficult for the shop to manage both timelines and quality. Thus, Reichenbach and Fought decided to be proactive and eliminate a persistent problem. For myriad reasons, though, graphics has been the toughest service for PSC to implement. Graphics currently accounts for 7 percent of PSC’s total revenue, ahead of the transportation arm (5 percent) but trailing services like collision repair (40 percent) and commercial upfitting (40 percent). “Art is subjective, and most of the time very difficult to quantify and convince people there is a value to,” Reichenbach explains.

“In the beginning, it was difficult for our own people to coordinate a graphic installation; the language was different, and the physical requirements were different. “After years of working closely together, our teams developed a common language and respect, resulting in a seamless integration today.” ROI

Reichenbach says it took nearly five years for PSC to see a return on investment from adding graphics. April 2017 | fenderbender.com 39

PROFILE

DIVERSIFIED PORTFOLIO

SERVICE ADDED

Mobile mechanical repair YEAR IMPLEMENTED

2010 INVESTMENT

A service truck with a welder generator, as well as a technician. INTEGRATION PLAN

While adding multiple services might seem

SERVICE ADDED

Commercial upfitting YEAR IMPLEMENTED

2012 INVESTMENT

The initial investment was over $500,000 INTEGRATION PLAN

PSC’s owners readily admit that they didn’t exactly hit the ground running when it came to adding commercial upfitting. Simple things, like training customers about which 40 fenderbender.com | April 2017

daunting for some shop operators, Fought and Reichenbach chose their new business offerings strategically, and didn’t stray far from their comfort zone. “The services that we’ve taken on, I wouldn’t consider them too far away from what the core business is,” Reichenbach says. “It’s still dealing with vehicles, it’s still dealing with parts going on to a vehicle. I mean, it really dovetailed in well with what we had already been doing, which is creating custom solutions for people.” PSC added mechanical repair because the collision department was buried in simple trailer repairs nearly a decade ago, and the Portland business eventually began losing jobs because of it. So, Fought and Reichenbach hired a tech and sent him out to customer sites to perform small repairs. In 2010, all mechanical work was moved to its own separate facility. “It wasn’t more than six to nine months,” Reichenbach says, “and we had to put three service trucks on the road to keep up with demand.”

Fought and Reichenbach’s primary research tool when considering such business additions is their customer base. PSC works with multiple national fleets, and the shop’s coowners have made a concerted effort to gather information through word-of-mouth. And, over the years, the co-owners have developed a more refined, formalized budgeting process when considering new business offerings. “In order to consider anything new now, we must understand if there is a deficiency in the marketplace,” Reichenbach explains. “Next, we would determine where, physically, in our company this would happen, who would manage it, and how would we mine the sales channel? … We need to know we can make a sustainable profit.”

PSC facility does which service, led to growing pains. But, before long, upfitting sales ramped up enough that Fought and Reichenbach felt the need to add additional space, and they leased a 10,000-square-foot building. “Today we are much more dialed in,” Reichenbach says with regard to upfitting. One prime example of PSC’s upfitting work: the manufacturing of refrigerated vans, which involves putting a refrigerated unit in the vehicle. Clients include partners in the meat industry, for example. PSC also fabricates keg trailers for multiple beer distributors in its region. Fought and Reichenbach said their business used to dabble in upfitting early in their time with PSC, simply due to the business’s customer base. Once they added a full upfitting department— and their knowledge of that service evolved to expert

status—demand increased. PSC’s co-owners always ask themselves if their customers could truly benefit from a potential new service they’re considering, and how adding that business element might translate into dollars. Because of that mentality and measured approach, PSC’s owners are confident their business is largely equipped for longterm success.

ROI

As Reichenbach alluded to, it took roughly 6-9 months for PSC to get its initial investment back after adding mechanical work.

ROI

Since upfitting isn’t as closely aligned to collision as PSC’s other services, it has taken a while for the business to master it. The shop is just now beginning to see an ROI. On that note, Fought says patience is the primary requirement when adding new services like upfitting. “It’s a leap of faith, venturing out,” Fought says. “You just have to stay the course.”

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S T R AT EGY

IDEA SHOP

Constant Recruiting

Form a year-round recruitment plan that ensures you’re never hurting for quality employees Throughout his many presentations and consulting gigs over the years, Daren Fristoe has repeatedly sold one phrase: perpetual recruitment. Fristoe, owner of The Fristoe Group, serves as the human resources expert for Sherwin-Williams’ A-Plus Network of shops. He says that forming an active recruiting plan allows you to easily track quality candidates in your area and ensure you’re not scrambling when an employee moves on. “Recruiting never stops,” he says. “You've got to have that net out all the time. You've always got to be interviewing new talent. Because you're going to miss somebody, and the guy down the street is going to get him.” Fristoe covers how to form a year-round recruiting plan that ensures you always have quality candidates queued up. AS TOLD TO TRAVIS BEAN

THINKSTOCK

I would encourage people to map out their recruiting plans for the whole year. It’s a

daily, weekly, monthly process. You’ve got to be thinking about it all the time. First, you will need a budget for both your money and your time. On a monthto-month basis, evaluate your resources. That budget should include advertising, whether it's online or in the newspaper. If there are career fairs at the local technical schools, it costs money to get a booth. You could even host a learn-andlunch, where you have candidates come in on the weekend and you hold an open house. If you have apprenticeship opportunities, you could be promoting those through your local vocational schools, your industry connections, your vendors. The military is also an excellent place to find really good people. Customers are even a place to look. Referral plans can work in your

favor, whether it’s internal employees or referrals from other people. There are so many service people coming home that are ready to learn and go to work. There’s almost an endless supply of people who want to help you find talent. Essentially, you should be making it clear you accept job applications year round.

You can post job advertisements on CareerBuilder, Monster, Craigslist and Indeed, but your website will be your best, most cost-efficient option. It costs little to nothing to put another tab on your site labeled “Career Opportunities.” That casts a virtual net that’s expansive and from which you can collect résumés and applications. Just make sure it’s accessible on a phone. You can include the caveat that you’re not looking to hire at the moment. We may not have this opening today, but there might be one tomorrow. That makes your business look good, that you’re always looking to hire the best. I would recommend broadening your search and posting an ad online in other markets where people may want to relocate from, especially if you’re in a rural area. Maybe they’re in Chicago, Minneapolis, Kansas City—who knows. Candidates are more willing to move now than they used to be. What I encourage shops to perpetually interview. That way,

the net is always cast, you’re always advertising, you’re always recruiting. It’s the people

you don’t expect to leave that will leave you. The problem is, if you don’t have a backlog of talent, you’re just going to hire the next person who walks through the door. And that doesn’t help your business long term, and can hurt you across the board. I encourage holding three interviews for each candidate, just because it’s hard to fake a good interview three times.

However, only hold three interviews if the position is open. If you’re just getting to know a potential candidate for the future, do one interview and when a position opens up, bring them in for what I would consider the second interview. During the interview, take notes, highlight your best candidates, and then create a database and track it, following up with people you’d like on your team down the road. If you hit a busy season or you need apprentices, they’re waiting in the wings. Even if you don’t need them right away, you may need them in six months or one year from now. Heaven forbid you expand to another facility and you need one of everything. Interviewing is time consuming,

so I would recommend recruiting managers or members of your team to help or head up interviewing, though you may want to have them take a class on interviewing best practices. Then you only have to come in for the final interview and decision. April 2017 | fenderbender.com 45

S T R AT EGY

SALES+MARKETING

The Anatomy of an Effective Facebook Ad

Facebook ads are inexpensive and effective—if shops adhere to several key strategies

The business value of social media —

and of Facebook advertising, in particular—is increasing rapidly. Jim Byron saw emphatic proof of that a couple years back. In late 2015, Byron, the longtime owner of Patterson Auto Body in Patterson, N.Y., saw to it that the annual holiday gift drive his business took part in was advertised via Facebook for the first time. Lo and behold, gift collections promptly quadrupled. “That amazed me,” Byron says. “People saw that and it sparked a nerve, and it sparked an interest to participate.” 46 fenderbender.com | April 2017

Byron used to plan newspaper ads for weeks in advance as a chief means of spreading the word about Patterson Auto Body. Now, the shop owner and the local marketing group he uses, Blue Stripe Creative, can post an effective ad on Facebook in mere moments. Simply put, Facebook advertising can be a game-changer for body shops, getting hundreds of hits to a website—and legitimately grabbing consumers’ attention—at little cost. FenderBender spoke with multiple industry experts to get their tips on how to produce an effective Facebook ad campaign.

1. Know who your audience is. It’s an eternal issue for body shops: How do you gain loyal customers when people go years between accidents? “You’re marketing to a mass population, in hopes of capturing about 7 percent,” says Byron, whose shop produces Facebook ads bi-weekly. “It’s always planting seeds, and you never stop,” he adds. “Keep your ad out there in front of the general public. And the larger the general public you can keep your name in front of, the better it’s going to be for you.” When Alex Beard, digital marketing strategist for Moving Targets in

THINKSTOCK

K E L LY B E AT O N

Perkasie, Pa., helps create Facebook ads for clients in the collision repair industry, he focuses on consumers in the relatively lucrative 25- to 54-year-old demographic. And, Beard typically zeroes in on consumers within 3–5 miles of a client’s business. “You start with … a local awareness ad, for example, to give them the rundown of who you are, what you do,” Beard says. “Facebook ads allow you to reach out to more people in a given geographical area, or people who, say, are on your email list.” Facebook collects an immense amount of demographical data from its users. And, while Facebook ads have existed since early 2004, they’re regularly being refined, as the social networking service looks to make its notices as smooth and unobtrusive as possible. “Not only have we seen them work,” Beard says, “but we know they are constantly changing, and it’s in Facebook’s interest to make them as good as possible.” 2. Have a clear purpose. Beard says one key to any effective advertisement is a call to action, which could be a message asking users to redeem a coupon by going to the site’s landing page. That especially holds true in the digital world, where countless outlets are fighting for consumer attention, leaving businesses precious seconds to capture their audience. Byron makes it a point to drive customers to his shop’s Facebook page via incentivization. “We have these little cards—‘Find us on Facebook’—and then we give a little gift when you like us on Facebook,” Byron noted. “We gave away 2,500 stainless steel mugs through Facebook—within a month they were gone.” It’s also never a bad idea to promote a piece of informational content from your website, such as a blog post, Beard says. Those types of value posts can help your shop build a connection with customers. Facebook ads need to be concise, but nonetheless serviceable. An ideal ad message is something that’s timely, up-

beat, and captures the attention of a local audience. It’s best to choose a headline that clearly and succinctly explains what online visitors will be clicking on. “Effective ads think through the whole cycle for the consumer,” says CIO of Automated Marketing Group Will Johnson, who has studied digital marketing closely for over a decade. “Most Facebook ads link to something—a blog or a page on your website. Do you make it easy for the person to become an actual customer?” Facebook makes it relatively simple to carry out a business’s advertising purpose. “It isn’t like putting up a billboard,” Beard says, “where you’re just kind of hoping people drive by and remember it and notice it and call on that when they need some type of repair. We can track the number of people that have seen an ad, the number of people who have clicked on an ad. “So they’re trackable. And they’re based on performance, so if they do well, there will be a bigger return on your investment.” 3. Entrust marketing experts. While utilizing online advertising is a reasonably streamlined process in 2017, it can be overwhelming for a body shop owner. After all, there are a fair amount of decisions to be made, tasks to be done, and stats to track. First of all, there’s the main digital outlet you need to choose for your advertising. Google AdWords, Bing, Twitter, and Pinterest are all options in addition to Facebook, for example. Beard prefers Facebook advertising for body shop clients, though, due to the ample customer data that service provides, and the overall power of that platform (Facebook surpassed 1.7 billion monthly active users by mid-2016). The technology of online advertising is always evolving. Thus, it’s in a business owner’s best interest to devote someone to the shop’s online presence in a virtual full-time capacity, if possible. “Collision repair is a tricky business; you’re approaching people in a time of crisis,” Johnson says. “Your Facebook ad, and any marketing

message, must respect that. It’s really easy to get it wrong, which is why it’s so important to have someone managing your marketing who knows how to get it right.” Shop owners also need to have a firm grasp of their online advertising budgets. Marketing groups, or a full-time marketing employee, can help monitor costs. Beard and Moving Target’s main online advertising campaigns with regard to Facebook ads, for example, cost $50–$100 per month. Byron says one key for choosing your shop’s designated marketer is simply finding someone with a true interest in the digital medium and letting them “run with it.” 4. Make sure your ad looks appealing. If you want to pry people’s attention away from Candy Crush notifications while they’re scrolling through Facebook on their phones, you’d better produce advertising that’s eye-catching. “It’s got to look good,” says Beard, who adds that his firm often develops ads that earn a 2.5 percent click-through rate (1.8 percent or better is considered ideal). “The ads themselves, they slide pretty nicely into a Facebook timeline; they’re supposed to look like they belong there. So it has to stand out.” Beard says the most important element of a Facebook ad is selecting an image that opens eyes. Another key element to keep in mind: Facebook has unveiled tighter restrictions in recent years to make sure ads don’t have the feel of visually arresting pop-up ads. Beard notes that, historically, Facebook stipulations have demanded that less than 20 percent of an ad’s image can be filled by text, for example. If a shop owner isn’t a Photoshop expert, this is yet another reason why they may want to seek assistance with setting up Facebook ads. Aesthetics are everything when it comes to Facebook ads, according to Byron. “Everything you want to sell, and everything you want to put in front of people on Facebook,” he says, “you have to put it in a visual video, or still photo, to grab their attention.” April 2017 | fenderbender.com 47

S T R AT EGY

CASE STUDY

JOHN TERRIZZI JR.

48 fenderbender.com | April 2017

John Terrizzi Jr. relied on refined strategic processes to withstand an initial lack of capital in the Philadelphia area B Y K E L LY B E AT O N P H O T O G R A P H Y B Y S T E P H A N I E N O LT

Coming Together John Terrizzi Jr. and his staff worked together to overcome a store opening in the middle of a brutal winter.

April 2017 | fenderbender.com 49

S T R AT EGY

CASE STUDY

On the rare moments in which John Terrizzi Jr. finds his passion for the auto industry waning, he looks at that old photo featuring a restored Model T. The photo documents Terrizzi Jr.’s father and uncle in their primes, circa 1955, after they had brought a Ford from the 1920s back to life. And that classic picture essentially serves as the foundation for the Terrizzi family business, which has always revolved around the automotive world. “It’s just a really inspiring picture,” Terrizzi Jr. says. “They were two kids of immigrants. They started with nothing. … First year in business, they had to sell that car in order to stay in business. So that car basically was the start of our family business.” That photo represents the hard work—the 13-hour days and the Philadelphia grit— that has long been a Terrizzi family tradition. Terrizzi Jr. has been immersed in car culture, in earnest, since he was 14 years old. So, when the car wash industry he had long worked in started to suffer, he began to look for other business ventures that he could hand off to his son, John Terrizzi III, in the future. He wanted to continue the family tradition of working side by side with fathers, sisters, sons, and nephews in a garage setting. Nothing would deter Terrizzi Jr. on his path, not even a lack of capital that nearly devastated his new venture. In 2013, Terrizzi set out to create a three-store collision repair business—only to nearly hit rock bottom before it even got off the ground. But Terrizzi Jr. is a firm believer that there’s nothing that can’t be overcome by an indefatigable spirit, even in an evolving auto industry. And he wanted to ensure that his next venture in the automotive world would have serious staying power. “It had to be able to produce enough to take care of [John Terrizzi III] as a career, for a lifetime,” Terrizzi Jr. explains. “We don’t get into things to get out of them. We get in them to stay.”

got started with Maaco with just $25,000 in working capital. He could’ve used $60,000 more than he originally borrowed, as it turned out. Fleet accounts with local dealers and rental companies like Enterprise and Avis rolled into the Bridgeport location fast enough that it left Terrizzi Jr. in a cash pinch due to the demand for parts. Then, unexpected plumbing and electricity issues ate up nearly $20,000. Terrizzi Jr. grew desperate to fuel his fledgling business. “We set out immediately to find some wholesale accounts, to keep the fires burning,” Terrizzi Jr. recalls. “And then we went out on the street every day, pretty much asking for people’s business.” The owner describes the first eight weeks or so in Bridgeport as being “devastating.” Yet, he rallied his employees by pushing them strictly when it felt appropriate. “We had no intentions of stopping,” Terrizzi Jr. says. “So we pulled in our belts and we did what we had to do.”

The Backstory The Terrizzi family has been involved in the auto industry, in various forms, since back in the Edsel era. In the late 1950s, the family operated a mechanical/body shop. Not long after that, their auto businesses evolved into full-service car wash facilities. In 1973, Terrizzi Jr. began working at a Pit Stop car wash and detailing center, which also offers paint refinishing and windshield repair. The family still operates that facility, but it eventually sold two similar businesses. The economics of owning multiple car washes simply grew less and less favorable over time, due to factors such as the rise in real estate costs in greater Philadelphia, Terrizzi Jr. says. Thus, roughly five years ago, when Terrizzi Jr. was pondering potential business ventures that his son could thrive in, the father’s thoughts drifted back to his own teenage years, when he would sell used cars after having them painted at a nearby Maaco facility. Considering his family’s long association

The Solution Yes, the Terrizzi family relied on its determination to survive early on in Bridgeport. But even more valuable than lengthy workdays, or seeking out community endeavors, like sponsoring youth sports teams, was the fact that Terrizzi Jr. began reviewing every shop process far more thoroughly. Looking back, this is what he learned about key business elements:

50 fenderbender.com | April 2017

with automotive repair and the desire to work fewer evening hours, Maaco seemed like an ideal fit for Terrizzi Jr. He also felt the franchisor offered a sense of security. “Maaco seemed to be a good fit for everything we wanted,” Terrizzi Jr. says. “The franchise model worked because it offered my son support if something were to happen to me.” Terrizzi Jr. eventually secured a loan, and began construction in Bridgeport, Pa., near Valley Forge National Historical Park. The shop opened in 2013. The Problem Terrizzi Jr.’s first Maaco location was unveiled in the month of February. And those first few months of business coincided with frequent snowstorms. “The first few months were rough,” Terrizzi Jr. says. “It was stressful.” With the benefit of hindsight, the owner is certain of what truly held Maaco of Bridgeport back early on: Terrizzi Jr. says he didn’t adequately anticipate his shop’s financial need. The shop operator

HITTING BENCHMARKS

Terrizzi Jr. is largely unrelenting when it comes to established procedures. If a customer isn’t handled properly, for example, he makes sure to have a review session on the matter. With regard to production, the owner increased his demands incrementally in Bridgeport, starting with “two or three cars in a day” and has built his shop’s average monthly car count to 120 currently. In that respect, Maaco’s operations team was especially helpful in Bridgeport, as were similar representatives from Sherwin-Williams, who helped make

Terrizzi Jr.’s shop processes more efficient. “They kept it sane,” Terrizzi Jr. notes, “when it started to get out of control. They kept us centered and focused.” ALLOCATING RESOURCES

Chief in helping Maaco of Bridgeport survive its early lack of capital were Terrizzi Sr.’s time-tested financial principles. The Terrizzi family patriarch, who still does payroll for his son, has long been a believer in treating your business and its staff as something larger than you. “It’s like a child, and you give it what it needs,” Terrizzi Jr. explains of his octogenarian father’s key business beliefs, which largely entail saving for rainy days. Now, more than ever, the Terrizzi family pays off any business-related credit card bill as fast as possible, for example, to keep its credit in good standing. “We try to own what we have, as much as possible—which takes a lot of financial pressure off,” Terrizzi Jr. says.

MAACO OF BRIDGEPORT LOCATION:

BRIDGEPORT, PA. SIZE:

19,000 SQUARE FEET STAFF SIZE:

AVERAGE MONTHLY CAR COUNT:

120

ANNUAL REVENUE:

$1.2 MILLION

A Rich Partnership John Terrizzi Sr. (left) and his uncle, Vincent A. Pinto (right), began the business by building the Model T pictured. They remained business partners until 2016.

MONITORING GROWTH

COURTESY JOHN TERRIZZI JR.

By 2017, Maaco of Bridgeport has refined procedures for keeping tabs on business elements like financial figures, as well as customer satisfaction. “Now we pore over the numbers every day,” Terrizzi Jr. notes. “We look at phone calls every day. We survey our customers—we make sure they’re happy.” The Aftermath Less than four years after opening Maaco of Bridgeport, Terrizzi Jr. unveiled Maaco of Aston (Pa.) in late 2016. It was preceded, in 2014, by a location in Philadelphia’s Manayunk neighborhood. “We went in with a plan, and said we wanted to get three shops up and running,” Terrizzi Jr. says. “We were able to achieve that.” The Bridgeport location’s average monthly car count has nearly quadrupled from its early figure of approximately 32. And, that location has seen its annual revenue increase from the equivalent of around $750,000 in that first, truncated year of 2013 to $1.2 million in 2016. Terrizzi Jr. says his first Maaco location currently boasts an ideal mix

of retail, wholesale, and fleet business. And, he’s confident that 24-year-old John Terrizzi III, and his other son, 20-year-old Timothy, will have a business to take to even greater heights in the years ahead. The Takeaway Terrizzi Jr. didn’t achieve his goal of owning three Maaco locations by accident. It took thorough planning, and a thorough review of any shop processes that endured failure shortly after launch. If Terrizzi Jr. could do the process all over again, he would rely on resources like Maaco’s operations team even earlier in the process of getting his shop up and running. “It’s kind of silly not to follow their [strategies], because that’s their path to success,” the shop owner notes. “You can try to standardize the procedures as much as possible, but every car’s different, and every bit of damage is different. … And that large group of people helps you answer questions.” Terrizzi Jr.’s overall lesson from his Bridgeport experience, though, is to plan

for the worst-case financial scenario when launching a new facility. Looking back, Terrizzi Jr. would’ve sought a larger business loan five years ago. “I underestimated a bit, because I wanted to be a little bit conservative,” he says. “But we got through it, and learned our lesson.” Terrizzi Jr. says his advice to prospective shop owners would be “make sure you really put enough aside for working capital, so you’re not sweating that.” After all, business owners encounter unforeseen circumstances all the time, and need the resources to weather such storms. These days, Terrizzi Jr.’s stress has dissipated. He’s confident in his Maaco shops, and he’s eager to see what his family does with the business in the future. But he still plans on sticking around a while. After all, hard work is a Terrizzi family tradition that he doesn’t plan on abandoning. “It’s something that we’re committed to, and it’s not something I’m going to walk away from anytime soon,” Terrizzi Jr. says. April 2017 | fenderbender.com 51

S T R AT EGY

LEADERSHIP

Create a Career Path for Employees

Reduce turnover rates by setting employees up for success with these six steps TR AVIS BE AN

everything Joe Amodei has built his business around: “When our company grows, everyone within it grows.” As The Collision Centers expands to its fifth location in the New York City area, Amodei credits the success of his business to that mindset. With each new location, he has a number of quality candidates waiting in the wings, ready to help lift the multi-shop network to new heights and help his mission of providing quality repairs to customers. As the technician shortage continues to affect shops nationwide, Amodei says it’s not enough to simply recruit quality employees. Because if you don’t put just as much effort into creating a career path for those employees, they won’t feel like they’re growing individually, no matter how much your company grows. It’s a practice he says singlelocation operations can replicate by utilizing their own employees and resources. Tanya Mulvey, researcher for the Society for Human Resource Management (SHRM), would have to agree, especially after surveying 800 businesses for the SHRM/Globoforce Influencing Workplace Culture Through Employee Recognition and Other Efforts study to determine best practices for improving retention. The study shows retention isn’t just a problem for collision repair: 46 percent of surveyed companies cited employee retention as their top challenge in 2016, an increase from 25 percent in 2012. And investing in employee growth consistently turned up as an indicator of success. There are plenty of ways to clearly create that career path for your employees—Amodei and Mulvey detail just a few of them. 52 fenderbender.com | April 2017

1. Communicate a clear vision for your company. In order for your employees to properly envision their futures at your company, it’s important they can see themselves carrying out your values, Mulvey says. “The companies with the best retention rates typically had certain values and mission statements that were important to the company,” she says. Clearly defining your company’s “vision” can be tricky, and shouldn’t be taken lightly, Amodei says. He claims nailing that vision down and finding the right workforce culture allowed his third shop to break from its struggles and expand into the fourth and fifth locations. Amodei says feedback is crucial. At meetings, discuss with your employees the true value that your company provides, and then around that, shape your mission statements. That way you can ensure employees are personally invested in the vision. 2. Recognize and reward employees for living up to those values. Then it’s time to take it one step further,

Mulvey says: Tie recognition to whatever your values are. “That shows employees that these values matter and that we stand behind our statements. It’s not something we just talk about,” she says. “These are our values and we believe in them and will reward employees for taking action and living up to those values.” According to SHRM’s survey, employees are more likely to have positive impacts on their companies when those companies have employee recognition programs in place. And when an employee’s impact is recognized, he or she feels directly tied to that company’s success, and is thus more committed to furthering that company’s growth. Mulvey says it’s much more effective when recognition is made personal. Take the time to get to know your employees and present them with rewards they value in their personal life. “Gift cards are often seen as generic and not very personable. But if you know an individual and provide them with a gift they’ll care about, that goes much further,” she says. “For instance, if they

THINKSTOCK

It’s not just some mantra—it’s

OFFER A COMPETITIVE BENEFITS PACKAGE Tanya Mulvey says benefit plans are scarce with smaller businesses, which affords you the opportunity to separate yourself from competition and improve employee retention. Those benefits could include health plans and extra vacation days, as well as training incentives and financial aid for education. “If people want to go back to school to get a degree, or get additional training that is relevant to the work, employers can help pay for those costs,” she says. “A lot of the companies [in the survey] said it ends up benefitting their organization as well as benefiting the employees.” “It's a really great benefit in terms of recruiting people if you're providing benefits and educational opportunities,” Mulvey adds. “They feel like you're helping them to advance their career and make their lives better outside of work as well.”

value their time, you could give them an extra day of vacation.” 3. Develop a farm system. Part of Amodei’s growth plan (he’s looking to open one new shop per year) is ensuring there are quality technicians always waiting in the wings. Comparable to professional sports teams using minor league teams, he calls it his “farm system.” “Have the right people in process that are going to be able to handle what’s coming down the pipe is key,” he says. “It’s going to get busier and busier as we expand, and we want to make sure we have the right people in place to make it easier.” Amodei works with a local vocational school to hire students and veterans into the trade. He typically brings in 10 students at a time (for a smaller operation, a couple apprentices would do), and they stay with the shop for one year working 10–20 hours per week between the five stores, shadowing technicians and helping where they can. When Amodei opens another store, he says he’ll pick the best candidates and bring them onboard full time.

4. Assign entry-level employees to mentors. Developing a mentorship program has a dual purpose, Mulvey says. Not only does it help integrate entry-level employees into your business, but it provides established employees the opportunity to oversee another employee’s growth at the company. Amodei assigns veteran employees to new hires (including the ones that graduate from his farm system) for several weeks to help break them in. He also hired a full-time coach who performs regular training with new employees. Eventually, the mentees will become mentors, providing employees a sense of advancement as they shape the quality of the team. Mulvey applauds this practice, as people are more likely to remain with your company if they feel like leaders within it. 5. Perform regular performance reviews. Annual reviews are a thing of the past, Mulvey says. Performance management should be a key focus for managers—especially when managing millennials, who crave feedback and constantly want to improve. “Having an ongoing conversation with our employees is important,” she says. “You need to be giving regular feedback and coaching your employees.” Mulvey says that practice took on several different forms in the survey, from implementing an apprenticeship program to assigning a mentor to employees to

developing a peer-to-peer training program. As a manager, simply passing by during the workday and offering tips for improving efficiency is beneficial. “If you can provide employees with some kind of coaching so they are able to improve their work, they feel like they’re moving up the chain,” she says. Amodei’s full-time coach is entirely focused on developing the skills of team members. “When you have one person making it a priority, they get really good at it and have time to work with everybody’s strengths,” he says. 6. Focus on personal development. In addition to improving skills in the workplace, Amodei has made personal development a way of showing he’s invested in his employees’ growth. Once per month, he sends two employees—from technicians to estimators to CSRs to managers—to Discover Leadership Training, which is an intense two-day workshop that aims to improve leadership skills. “At the end of the day, when you succeed in your personal life, you become better at your work,” Amodei says. Mulvey says personal development can come in many different forms, from sending employees to classes (as Amodei did) to simply having regular one-on-one meetings with employees to gauge their personal growth. Through that, you can find ways of offering outlets for personal development. April 2017 | fenderbender.com 53

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COLUMNS

ON THE BUSINESS MIKE ANDERSON

The Data Risk

Who owns a vehicle’s data, and how can that chain of ownership affect your business?

MICHAEL HOEWELER

Let’s start with a quick story. (It’s true,

but the way, even though I’ll refrain from mentioning any names.) A customer takes a high-end vehicle into a collision repair facility. The customer says that, since the time of their recent accident the vehicle’s navigation system no longer works. No problem, right? Well, there was a problem. I mean, my friend’s shop had the right diagnostic scan tool to check on that system. His team hooked it up, and pulled the data. But the vehicle said the navigation gave out seven months and 8,000 miles earlier. The issue wasn’t related to the accident. As is often the case with repairs, the shop shared its findings with the insurance carrier. The carrier denied the claim for the navigation system (after all, it didn’t pertain to the accident). The customer sued the shop. He said it was his data, and the shop had no right to share it with a third party. Was that customer right? Maybe ... My friends, you have heard a lot about diagnostic scanning in the last year. The topic is everywhere, as it should be. It’s a critical issue. But one aspect that we haven’t discussed is the actual data that is transmitted—and who owns that data. This isn’t cut and dry; there’s no clear answer. And that’s where problems occur. To better understand it, let’s quickly discuss how we got to this place. We hear about self-driving cars in mainstream media on a regular basis, but the true focus for OEMs is in four key areas: improved fuel economy, enhanced “comfort” features, minimizing injuries, and preventing deaths. The last one is clearly the big one. The World Health Organization predicted that, if no measures are put in place to impede the trend, fatalities due to vehicle accidents will become the fifth-leading cause of death worldwide by 2030. Well, depending on the numbers you check, many had it already at No. 4 by the end of 2016. According to the National Safety Council, traffic deaths in-

creased 6 percent and topped 40,000 total fatalities for the first time since 2007. By their very nature, accidents are unintentional, so automakers have been tasked with finding solutions to help drivers operate their vehicles in a safe manner. Enter technology. Modern vehicles have more than 100 million lines of code in them, more than twice as many as a Boeing 787 and F-35 fighter—combined. The Large Hadron Collider (the world’s largest and most powerful particle accelerator) only has 50 million lines of code. Bottom line: Today’s vehicles are complex. That’s why I am such a proponent and advocate for pre- and post-repair diagnostic scanning. I’ve been over it a number of times (even in print, in this space), so I won’t repeat myself here. Let’s skip that step and assume that you now do scan vehicles and make repair decisions based off that data. Well, that data adds another element to the process, doesn’t it? No one wants to be sued for following through on a repair in the proper way. No one. And no one should get sued for this. That story I told in opening this column didn’t need to take place. There’s a simple solution that everyone can (and should) add

to their process to prevent it: authorization. We all are using an authorization form for our repair work, right? (The answer needs to be yes, by the way.) Well, we need to have separate and distinct language for scanning and the data that comes out of it. There are some examples of very strong authorization forms out there in the industry right now. (CDS, maker of the asTech2 device, actually has a great one on the company’s website.) Take a look and utilize that language in the forms you have your customers sign. The most important aspect: There must be language that clearly states that the vehicle owner gives you full permission to scan the vehicle and share that data with a third party. That covers your bases when you need to submit the claim, whether it’s for a warranty claim or insurance claim. It can really be that simple in preventing a potentially combative situation with a customer. Our industry is complex enough these days without having to worry about litigation as a result of doing the right thing. I don’t want to hear these horror stories. I don’t want to have to relay them to you. Protect yourself. Protect your processes. Protect the customer. That’s what we’re here to do.

MIKE ANDERSON the former owner of Wagonwork Collision Centers in Alexandria, Va., operates CollisionAdvice.com, a training and consulting firm that assists shop operators nationwide. He is also a facilitator for Axalta Coating Systems’ 20 Groups in the U.S. and Canada, and is an Accredited Automotive Manager.

E M A I L : mike@collisionadvice.com A R C H I V E : f e n d e r b e n d e r. c o m /a n d e r s o n

April 2017 | fenderbender.com 55

S H O P TA L K

MARIAN RODRIGUEZ

56 fenderbender.com | April 2017

“ANY TIME I SPEND OUT IN THE COMMUNITY IS BENEFICIAL TO M Y COMPA N Y.” MARIAN RODRIGUEZ MARKETING MANAGER CARSTAR MUNDELEIN

PHOTOGRAPHY BY MIKE WHEALAN

Community Staple Marian Rodriguez has increased CARSTAR Mundelein's customer base by becoming an integral part of the community.

April 2017 | fenderbender.com 57

S H O P TA L K

MARIAN RODRIGUEZ

JEANNE SILVER COULDN’T BE EVERYWHERE AT ONCE. So she hired someone who could. Well, sort of. Silver—owner of CARSTAR Mundelein in Mundelein, Ill., and Hall of Eagles inductee—wanted to ensure her shop was properly tending to insurance agents, community events, the chamber of commerce and local organizations, all of which seems impossibly daunting on top of managerial duties. So she brought on Marian Rodriguez full-time as the business’s marketing manager. The results since speak for themselves: In the past two years, CARSTAR Mundelein’s market has expanded beyond Lake County into two neighboring counties, causing the shop’s referral rate to jump to 98 percent, insurance scores to skyrocket, and annual revenue and car counts to increase over 15 percent each year. Rodriguez’s sole job is navigating the shop’s tri-county market, meeting with insurance agents and fleet accounts, reaching out to potential customers, and ensuring that anyone within a 50-mile radius knows that CARSTAR Mundelein is the shop for them. “Our clients are anyone who drives a car, or anyone that knows a person who drives a car,” Rodriguez says. “It’s your next-door neighbor, it’s your employee, it’s your grandchildren—everyone. So any time I spend out in the community is beneficial to my company.” From morning to evening, Rodriguez recaps one of her busy, marketing-heavy days and the strategies she uses to drive business to her shop. AS TOLD TO TR AVIS BE AN

58 fenderbender.com | April 2017

I like to plan out my schedule by month.

Very little of that time is spent in the office. I believe every minute with someone is valuable time, so I need to spend every possible minute of my day reaching people. Each month, I’m aiming to visit every client we have—that includes insurance agents and fleet accounts—attend chamber of commerce meetings, attend local women’s group meetings, and volunteer with local non-profits. For my schedule, what I do is I go through the calendars for all three chambers I serve on and figure out what events I’m going to. I’m looking for family-oriented events, things that will draw a big crowd. Then I go into my women’s groups, like the Pro-

fessional Women’s Club of Chicago, and look at their calendars and plan to attend their meetings. And then in between those events and meetings, I plan my days based on which clients I’m going to go visit. That’s spread out over three different counties, so I hit towns within those counties one at a time. When I started here two years ago, we only covered one county. But as I was speaking with clients, I started to realize how many people worked in Lake County, but lived in a neighboring county. So I started to branch out and network with nearby chambers and businesses and insurance agents. Now I’m just as much a part of those communities as the one I started with around here.

Listen to the Kids Marian Rodriguez also volunteers her time with non collision-related organizations, including the Union League Boys & Girls Club in Chicago.

on our sixth Recycled Ride for someone in our community. So we do things that are not typical marketing, per se, but we really believe in giving back is going to reward us—and it has. We’re very well known. I volunteer a lot of extra hours for organizations not in the collision industry. I’ve put in hundreds of hours with the Union League Boys and Girls Club in Chicago, and the Boys and Girls Club of Lake County. I photograph their events, and I play with the kids. All of their parents have vehicles that will need to be fixed at some point in their lives. For putting in so many hours with that organization, I’ve received the President’s Volunteer Service Award. You can’t underestimate how many people will see that in the local newspaper, and how much business that will bring in. I don’t want to just walk in, say hi and bye, and then I’m out the door. I sit down and talk to them and answer any questions they have for me. It takes a lot of time out of my day, but it’s time we’re giving to help them better get to know us. A lot of them need that hand holding. They need that reassurance that we care as much as they care about their vehicles. I tell them how our owner checks every vehicle that comes out of the shop, and how committed we are to quality. I listen to everything they have to say and let them talk about their personal lives. With many of them, I know who their kids, their grandchildren, their pets are. I know what they like to eat and don’t like to eat. I learn what their needs are. I like to change things up each time I go in. We try to have some sort of theme

Then I went to visit some clients.

This morning I started off early at a meeting for the Buffalo Grove Lincolnshire Chamber of Commerce.

I’m on their special events committee. That means I volunteer to do all the photography for the chamber. I go to all the events and snap photos. People recognize me all the time, because I’m “the lady with the camera.” And that makes them very comfortable with me. I’ve been working events with this one woman for almost two years, and she just came up to me and said she set up an appointment with the shop. A lot of people acknowledge CARSTAR Mundelein for giving back to the community. We also volunteer at the Northern Illinois Food Bank and help package food for those in need. We’re

each month. In December, I’ll put on some reindeer antlers and bring in some cookies and ornaments. For Easter, we fill plastic eggs with candy and deliver them in a basket. For Halloween, we make a special trip to an apple farm in Wisconsin to buy apple cider donuts. I show up dressed like a witch with the donuts, and everybody wants to take a picture. Those are the moments they’re going to remember when they need to recommend a shop. When our customers check in, our receptionists will ask who referred them, and they’ll say from which agent they came. The receptionist will then either text or email me a sheet that lists the agents that referred customers that day, and if I’m in the area, I’ll stop in and give them something as a thank you. Later tonight, I’m having dinner with one of our clients. Sometimes

I’ll schedule events at night as well, whether it’s a dinner or something in the community. I try to never come off like I’m pitching my business. You just want to have conversations with people, and offer your expertise where you can. When talking to people, I’m wondering what I can do to make their lives easier. We just celebrated our 20th year, so we’re very well known and respected in the community. We offer classes on safe driving and issues people should know about when it comes to their vehicles. So whenever I talk to someone my concern is to keep that standard and improve on it. When I hear stories about people’s children having a car accident and how petrified they were, I’m offering a way of coping. We want to take that concern away from them and offer them something more. April 2017 | fenderbender.com 59

Shop owner. Monday morning motivator. Quality fanatic. CAPA convert. You didn’t build your reputation overnight. And you didn’t do it using inferior parts. Which is why CAPA created the industry’s first crash part testing and certification program over 29 years ago. To provide an assurance of quality in replacement parts for everyone whose livelihood depends on quality repairs. It isn’t always easy to spot a poor quality replacement part. One that’s ungalvanized, made of inferior material, unsafe, or lacks all the correct welds. So we do all that for you. CAPA Certified parts. The only replacement parts tested and found good enough to earn the yellow and blue CAPA Quality Seal. And the approval of shop owners like you.

If it isn’t CAPA Certified, it isn’t a genuine replacement part. capacertified.org 60 fenderbender.com | April 2017

U P DAT E

FIX AUTO EXPRESS GRESHAM

ALERT ESTIMATORS IN ADVANCE.

Perhaps the biggest key when adopting an express repair setup is simply getting employees to adapt. At Fix Auto Express Gresham, Kim planned for manufacturers to provide training, including welding. Furthermore, “it’s going to take a big change with your estimating staff,” says Kim, who now owns two Portland-area shops that combine for nearly $5 million in annual revenue. “Because, for the most part, your average estimator doesn’t understand repairing a bumper also.”

FI X AU T O E X PRESS GRESH A M

ALTER HIRING PHILOSOPHIES.

A D D I N G A N E X P R E S S R E PA I R FAC I L I T Y HAS MADE SHON KIM ’S OVER ALL BUSINESS S U P R E M E LY E F F I C I E N T B Y K E L LY B E AT O N PHOTOGRAPHY BY CRAIG MITCHELLDYER

For Shon Kim, the stakes were high in 2015. Today, he’s raking in solid rewards. When FenderBender spoke with Kim a few years back (“Bumper-Focused Express Shop,” July 2015, fenderbender. com/bumperexpress) the Portland-area shop owner had recently opened a 3,600-square-foot shop dedicated to non-structural, lightduty repairs, with the goal of cutting cycle time. It was a sizable investment of more than $100,000 but less than three years later, Kim is an advocate for the creation of express repair facilities. The reasons are seemingly as endless as the stream of business rolling into his Gresham, Ore., shop each day. For starters, little square footage is required. And insurance agents tend to be fans of express repair facilities, as repair costs are typically right around the cost of a customer’s deductible, meaning the work is frequently out of pocket, keeping premiums in check. Since the switch, the express shop has a cycle time of 24–36 hours, and has steadily increased its annual revenue, reaching slightly more than $500,000 in 2016. “It’s just all around better for the customer, better for the insurance company,” Kim says. Kim provides the chief elements for shop owners to consider when going the express repair route.

Due to the light-duty work that flows through the facility, they simply don’t require technicians with decades of experience. “You’re not going to need a technician that has structural experience to work on bumpers,” explains Kim, whose Gresham shop handles around 12 bumpers per day. “So, with that in mind, you don’t need to have the high-dollar technician. You can have more of a high-level, mid-tech.”

EMBRACE CREATIVE EFFICIENCY.

SHON KIM

Opening one express repair facility can aid an owner’s other shops. Such is the case in the Portland area, where Kim’s non-structural, light-duty repair shop is located just 1.5 miles from his larger, original facility—a setup that lends itself nicely to load leveling. Another example of express repair shops’ potential benefits is the work Kim’s business does at the local airport for a large rental company. Rather than shuttle vehicles back and forth, nearly 25 miles roundtrip, Kim sends a van to the airport, has an employee disassemble parts there, bring the bumpers back to the express shop, and eventually re-assemble them back at the rental location. “Being able to shuttle one technician down [to the airport], who has become very efficient at removing bumpers, it works out great,” Kim says. April 2017 | fenderbender.com 61

2017

FOR SHOP OPERATORS BY SHOP OPERATORS

STRATEGIES

NETWORKING

DISCUSSIONS

We work with a ton of brilliant shop operators at FenderBender. For the conference, we bring in the ones making the biggest impact on the most important topics, and have them walk through the strategies that make them so successful.

We want everyone you meet to help improve your business. And we want you to meet everyone. Thatâ&#x20AC;&#x2122;s why we keep the crowd size modest and comprised only of collision repair shop operators.

We believe that face-to-face discussions are one of the best ways to find specific solutions. So rather than include discussions as a side note, we dedicate real time to them with roundtables, panels and our brand new FenderBender Talks.

FENDERBENDERCONFERENCE.COM

COLUMNS

IN THE TRENCHES DARRELL AMBERSON

to be insulting or hurtful. As a repairer I believe it best to rise above such comments.

Don’t Undervalue Insurance Relationships

BE PROFESSIONAL

While it’s easy to become frustrated and adversarial, there are some simple solutions to get the most of out each relationship

MICHAEL HOEWELER

Have you noticed there are very few

articles about how to maintain insurance relationships, but it is unquestionably one of the most important considerations for managing a collision repair business? Let’s briefly tiptoe through some of the landmines of this potentially volatile topic. I will share some of my perspectives, which are based on my experiences and values. I understand that there is a wide range of positions on how a shop should perceive and interact with insurers. There are those who build their business almost strictly upon DRP relationships and there are those who are adversarial, preferring to be uncompromising, seeing the insurer as an obstruction to their business model, including pricing. To complicate the matter, there are those insurers who strive to be flexible and understanding of repairers, and there are those that are dictatorial, unreasonable, and abrasive. I personally accept the fact that most collision repair jobs come with two customers—the owner and the insurer. One can debate who the customer truly is. Typically it’s argued that the vehicle owner is truly the customer as they have ultimate control over repair decisions and compensation. Yet, one cannot argue the influence that the insurer maintains in the equation and therefore I believe the insurer is also a customer, even though to a different degree. After being in the business for many years, I frankly find that this three-way relationship makes our industry more unique and interesting than others. Of course it’s more challenging, but finding one’s way to build successful insurance relationship can be rewarding. Over the years, I’ve developed many friendships with insurers. Allow me to offer a few of my own suggestions regarding how we as repairers can successfully interact with insurers.

IT’S MY JOB

I consider it my responsibility to successfully interact with insurers. In the shops that I’ve worked in, a portion, if not most, jobs have insurer involvement. I will admit that a few insurance people can be exceedingly difficult. I have a friend who retired from what most of us would consider a very user-friendly insurance company. They were typically very fair and considerate toward shops. After becoming an independent consultant to repairers, he was shocked and embarrassed at the behavior of a few insurers. Yes, they exist. Yet I consider it my job to find ways to successfully interact with even those few most difficult.

NEGOTIATE WITH FACTS

We should always keep our negotiations based on facts. When negotiating terms on an estimate, stick to p-page logic, factory repair information, and recognized repair methodology such as from I-CAR. Stay away from personal and emotional topics. I recently had an insurer tell a staff person that they “should go back to school” because he disagreed with some repair methodology. Obviously such a comment serves no useful purpose in the negotiation and was designed

I believe in the adage, “If you let your emotions get the best of you, you lost!” If you allow yourself to get into a heated argument, often utilizing personal insults, you’ve just lost control. Telling the other person “what you think” may serve an emotional need in you by venting your feelings, perhaps even believing that you “put them in their place” or that you “showed them.” It usually doesn’t get you the most successful negotiation terms, though, and may cause irreparable damage to the relationship for the future.

WINNING

I believe a goal for each negotiation should be that both parties come away with terms that they can live with. Of course we all want to get everything we want, and it’s worth striving for. But at the end of the day that is not always possible. The wise negotiator uses compelling logic and great social skills to help cause the other party to believe that they are getting most of what they want. Many repairers believe they win when they continue to cash the insurance checks.

IT’S ALL SMALL STUFF

While I understand it is easy to get frustrated or angry in our business relationships, I often remind myself of two important rules: 1. Don’t sweat the small stuff; 2. It’s all small stuff. There are big important issues in life that should be prioritized. Put things in proper perspective and do your best to not be discouraged; instead, be positive.

DARRELL AMBERSON is the president of operations at LaMettry’s Collision in the Twin Cities and a highly engaged, longtime industry volunteer and advocate.

E M A I L : damberson@lamettrys.com A R C H I V E : f e n d e r b e n d e r. c o m /a m b e r s o n

April 2017 | fenderbender.com 63

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TOM TYLKA SIZE:

16,000 SQUARE FEET STAFF:

Increasing Production Space Tom & Ed's Autobody mounted bumper racks on the walls to eliminate wasted space in the shop.

AVERAGE MONTHLY CAR COUNT:

100

ANNUAL REVENUE:

$9 MILLION

A way of freeing up space on the shop floor by mounting bumper racks on the wall.

The Inspiration —

Tom Tylka, the owner of Tom & Ed’s Autobody Inc., a six-location MSO in Indiana, was an engineer before he embarked upon a career in the auto body industry. And, the need to create and innovate has never left him. So, it was in that spirit that, four years ago, the shop operator decided to mount bumper racks on the wall at his Schererville location, in an effort to better utilize space. “It’s funny, because when we go to trade shows, he is always set on us being able to manufacture those items on our own,” says Andy Tylka, who’s both Tom’s son and the CEO of the business. “We go to these trade shows and my father always has these ‘eureka’ moments, where he feels like it’s a simple design that he feels we can duplicate and put in our shops.”

64 fenderbender.com | April 2017

What They Do —

In short, the wall-mounted bumper racks clear the floor, so shop space isn’t wasted. Not to mention, they save Tom & Ed’s from having to pay $250 or so per commercial rack. Now, “instead of bumper racks sitting on horses in the middle of the floor, we utilize wall space and take the bumper racks off the floor,” Andy Tylka explains. “It’s nice, too, because it doubles as a holder for the horses.” In the past, technicians at Tom & Ed’s requested a more efficient place to store bumpers. Now, each technician has his own rack. The Schererville shop’s primary painter has two of the racks (for incoming and outgoing bumpers), and the parts department has one.

How They're Made —

Tylka says the homemade bumper racks can be reproduced easily. They simply consist of two, 6 foot 2x4s, mounted to a wall, plus some PVC pipe. Multiple holes were drilled into the 2x4s at a 20 degree angle, and PVC piping was affixed to those holes. The 20 degree angle is all it takes to assure that bumpers don’t fall forward off the racks.

The Cost —

The tidy sum is roughly $20 per rack, considering the parts consist primarily of 2x4s and inexpensive pipes.

The ROI —

“Everybody has a price of their square footage that they use in their shop,” Tylka notes. “So, when you’re taking up a full bay storing bumpers on horses, you’re giving up a whole bay of space [in which you could] be working on a vehicle, and turning a vehicle. … That’s a lot of money lost.” Considering that the 16,000-square-foot location in Schererville has a dollars per square foot figure of $93.75, and each rack takes up roughly 10 square feet, each rack has the potential to be worth close to $938 to that facility, Tylka says. COURTESY TOM & ED'S AUTOBODY

What They Are —