FenderBender — May 2017 by EndeavorBusinessMedia-VehicleRepairGroup

F E N D E R B E N D E R . C O M / M AY 2 0 1 7

THE MILITARY HIRING SOLUTION PAGE 4 6

Strategies & Inspiration for Collision Repair Success

BALANCED GROWTH One shop owner’s path to a more purposeful life—and a thriving business PAGE 3 6

GO LIVE! SOCIAL MEDIA’S NEW FRONTIER PAGE 19

INSIDE CCC’S MOVE TO BMS PAGE 20

THE SIMPLE STEPS TO INCREASED PROFITABILITY PAGE 3 0

Worry Free Larry Constable made drastic philosophical changes to go from overworked and underperforming to leading a rich, balanced life.

MIKE ANDERSON:

OEM VS. AFTERMARKET SCAN TOOLS PAGE 5 5

PAGE 67

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MAY

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S H O P TA L K

56 LESSONS IN

LEADERSHIP

Longtime shop operator and business coach Larry Baker reflects on the lessons learned through 40 years in the industry. BY KATHLEEN SANDOVAL

BRETT FLASHNICK

Constant Reflection Larry Baker's introspective approach to leadership and shop improvement has helped his $11 million business thrive.

May 2017 | fenderbender.com 3

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

MAY

Proper Focus Larry Constable altered his workaholic approach to business in favor of a work-life balance that has led to a better appreciation of what's important in his business—like teaching moments with young techs.

F E AT U R E

PROFILE

C A S E S TU DY

Three high-performing shop operators share their simplified approaches to setting their businesses up to achieve industryleading margins.

Larry Constable spent years logging 100hour workweeks and racking up sleepless night—only to realize the business he fought so diligently to improve could serve a purpose far beyond the vehicles it repaired.

Kevin Lockhart's newfound focus on touch time (and all the processes, procedures and systems to improve it) signified a critical pivot in his Nebraska shop's rise to extreme profitability.

PROFIT SIMPLIFIED BY TRAVIS BEAN AND BRYCE EVANS

WAKE-UP CALL

TOUCH POINT 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 | May 2017

SHELLI MCKENNA

BY KELLY BEATON

Curb Appeal Collision Center Inc. in Golden Valley, Minn., has made its facility stand out in a busy area by adding natural, well-kept landscaping that includes outdoor seating and a comfortable environment for customers.

S T R AT E G Y

QUICKFIX

Inside the West Viriginia parts bill

A look at live social media features

The effect of staff size on cycle time

Create an effective color match library

Turn mobile shop management solutions into an efficiency booster

Embracing (and profiting) from hybrid technology

PAST THE PAGE

NUMBERS

2017 keynote announced

CCC's controversial BMS move

TommyGunn by ChromaLectrix LLC

CONFERENCE NEWS

COURTESY COLLISION CENTER INC. , THINKSTOCK

ANALYSIS

VIEWPOINT

HOW IT WORKS

Finding middle ground with insurers

2019 Silverado to feature aluminum

The modern approach to generating wordof-mouth referrals

AWARDS INSIGHT

DRIVERS SEAT

Celebrate success

LIGHT HITS

SNAP SHOP

Collision Center Inc. in Minnesota

THE BIG IDEA

BY KEVIN RAINS

IDEA SHOP

HUMAN RESOURCES

How to master a critical workforce solution: hiring military veterans

TECH+TOOLS

ON THE BUSINESS Settling an argument: OEM vs. aftermarket scan tools BY MIKE ANDERSON

UPDATE

IN THE TRENCHES

Our industry's undeniable ability to overcome, adapt and succeed BY STEVE MORRIS

INNOVATIONS

A visual approach to managing the repair process

May 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

ChemSpec USA

O'Reilly Auto Parts

Auto Job Central

Estify

PPG

Axalta Coating Systems

Hyundai Motor America

U-POL

CAPA

Kia Motors America

Vehicle Service Group

CCC Information Services

OEConnection

6 fenderbender.com | May 2017

EDITORIAL

Bryce Evans Editorial Director Anna Zeck Managing Editor Travis Bean Associate Editor Kelly Beaton Staff Writer Noura Elmanssy Staff Writer Tess Collins Custom Content Producer Kathleen Sandoval Web Content Producer Melissa Steinken Editorial Intern Mike Anderson Contributing Writer Kevin Rains Contributing Writer Steve Morris 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 Sales Manager 651.846.949452 / mmortinson@10missions.com Melody Todd Regional Advertising Sales 651.846.9468 / mtodd@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.

May 2017 | fenderbender.com 7

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05.17 C O M M E N T S , D I S C U S S I O N S , F E E D B A C K A N D M O R E F R O M A R O U N D T H E W E B

FAC E B O O K

PODCAST

Summer Vacations

As spring turns to summer, shop owners begin to prepare for staff members being out of the shop and on vacation. FenderBender staff writer Tess Collins asked the FenderBender LinkedIn group: With summer approaching, how many of you close your shops down for a week or two in the summer? If not, how do you manage employees taking time off during this popular vacation time?

Join the conversation at fenderbender.com/employeevacation

Evaluating WV Parts Bill

THINKSTOCK

Wow, what a complicated and controversial topic (“WMABA Opposes Proposed West Virginia Parts Bill,” March 2017). Let me share some of my thoughts on this: When you sign the contract for your policy, at least in Pennsylvania, it's written right in the contract they reserve the right to use aftermarket and used parts at their discretion. Some also offer OEM policies, such as Nationwide, which guarantees only new OEM parts purchased from the dealer to be used. If you use a DRP partner shop, the repairs are guaranteed for as long as you own the car. You would presume that the use of aftermarket parts will have no impact on warranties, under the assumption the body parts fall into the same category as let's say oil filters. The Magnuson-Moss Warranty Act is the right for consumers to have the vehicle serviced at a business of their choice and the option to use aftermarket parts, meaning potentially money-saving alternatives to those that came on the car, while retaining the original warranty. The automaker is not allowed to void a warranty just because a non-factory part is used. Not only should customers be more aware of what they sign up for, but the automakers and dealerships really have no grounds to void those warranties just because a used or aftermarket bumper was put on it. I can certainly understand mechanical items that actually have bearing on the vehicle's reliability and safety being used. Most auto manufacturers are price matching their new OEM parts, which means customers should be more careful as to where they take their vehicle for repair, as opposed to the insurance company and policy they choose. All the while, LKQ/Keystone, for example, places lifetime warranties on their parts, and even pays labor to shops to replace their faulty parts if a problem arises in the future. What OEM company have you seen do something like that after two, three, five or even 10 years? Finally, employees of these aftermarket companies have to make a living just like the rest of the world. To effectively stop using them puts people out of jobs and further hurts this country's economy.

Correction: In the April Shop Talk, it was mistakenly reported that Marian Rodriguez is a member of the Professional Women’s Club of Chicago. She is a member of the Women’s Industry Network.

COLLISION C A S T

In May’s CollisionCast, FenderBender staff writer Kathleen Sandoval speaks to Rich Lawson, estimator for Rick Hendrick Collision Center, regarding his time in the military and his postmilitary transition into the collision repair industry. Listen now at fenderbender.com/CollisionCast

TWITTER

@TeslaMotors is working on adding 300 body shops within the next few weeks. bit.ly/2nANxTy @FenderBenderMag

In case you missed it: @AkzoNobel rejected an unsolicited $22.1 billion takeover bid from @PPG Industries. bit.ly/2lHUbuE @FenderBenderMag

The model year 2019 Chevrolet Silverado 1500 is rumored to have an aluminum body atop its steel frame. bit.ly/2noXq7w @FenderBenderMag

Vince Carrozza Owner, Vince's Auto Service Newtown, Pa.

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

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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

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.

COURTESY JOHN KRIESEL

Keynote Speaker to Discuss Overcoming Obstacles

FenderBender recently revealed that military veteran and Purple Heart recipient John Kriesel will serve as the keynote speaker at the 2017 FenderBender Management Conference, Sept. 27–29 at the Westin Lombard near Chicago. Kriesel’s unique and powerful presentation, “Still Standing. Still Smiling,” sponsored by BASF Automotive Refinish, details his recovery from a roadside bomb explosion while serving our country in Iraq. Kriesel lost both legs, died three times on the operating table, and underwent 35 surgeries—only to walk out of Walter Reed Army Medical Center nine months later with a renewed outlook on life. Author, speaker and former member of the Minnesota House of Representatives, Kriesel will deliver a story of survival and determination in overcoming life’s biggest challenges, one that will resonate with those of you fighting each day to rise up to the obstacles hindering your business’s success: “You are not going to get blown up by a roadside bomb, but at some point you will face hardship—physical or emotional,” he asserts, “and you can deal with it.” Be sure to check out fenderbenderconference.com for more information and future updates.

Overcoming Obstacles Military veteran John Kriesel will present his story at the 2017 FenderBender Management Conference.

CHRIS CRAWFORD WINNER OF L AST YEAR’S SHOP WORKER CATEGORY

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May 2017 | fenderbender.com 4/11/17 1:53 PM11

AWARDS INSIGHT

BILL SEFCEK

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 NOMINEE

BILL SEFCEK PRESIDENT STAN MITCHELL ENTERPRISES BONITA SPRINGS, FLA.

Bill Sefcek worked for State Farm for nearly three decades, ending his career as an estimating team manager in 2011. Often, the job made him feel like a mediator, as he was forced to defuse seemingly volatile situations at repair facilities. But the relationship between shop owners and insurers doesn’t have to be combustible, Sefcek insists. “Remember, insurance companies make money by saving money,” Sefcek says. “Shops make money by charging for what they do. So you’re already at odds, before you even meet each other. “You’ve heard of some of the facilities that kick insurance representatives out of their shop? Well, I was always one that was able to go in and heal that wound. I always had good relationships with shops—I listened to them.” Don Rife Jr., a shop owner who nominated Sefcek for a FenderBender Award, agrees. “From a shop perspective, even though Bill was a State Farm employee, he was well respected due to the honesty and fairness he exhibited when dealing with shops,” says Rife Jr., owner of Rife’s Autobody-Westerville (Ohio). Sefcek, currently the president of consulting firm Stan Mitchell Enterprises, provides insight for how body shop owners can improve their relationships with insurers. A S T O L D T O K E L LY B E AT O N

Shop owners need to bare in mind how fiercely competitive the auto insurance industry is, Sefcek says. “Seven out of 10 commercials on TV are for auto insurance,” he says. “How do they do that? By controlling costs.” Appraisers that visit body shops are simply upholding the limits of their companies’ insurance policies, Sefcek notes. “So, what I tell facilities is, ‘Here’s what you need to do,’” he explains. “‘You need to realize that the [insurance representative] that comes out there is doing the best they can to provide the indemnity coverage that was promised by the policy. … The basic policy is not going to change, because 80–90 percent of the consumers buy it for cost— they don’t buy it, like a savvy customer would, for coverage. 12 fenderbender.com | May 2017

“So, when your appraiser comes in, try to work on a level of that understanding.” Debate Tactfully.

Next time you’re debating the merit of a supplement with an insurer, present your argument strategically, Sefcek says. For starters, don’t begin your conversation by demanding five additional hours for your technician. In fact, don’t provide those kind of specifics until necessary. Provide evidence, like a lawyer. “Many shops, they say, ‘I need five hours additional time on this,’” Sefcek notes. “All the insurance company’s thinking is, ‘Five hours is an awful lot of time.’ If you say you needed additional time, and then when the appraiser gets there you show them why you need the additional time, he or she may actually give you five hours.”

Consider Insurers’ Schedules.

Sefcek used to suggest that his appraisers make appointments with shops when they had assignments. And, he wasn’t offended if shops sometimes said they didn’t have time that day to fit an assignment in its schedule. After all, neither shops nor insurers benefit if a repair is done hastily. He says shops shouldn’t hesitate to tell insurers they’re a little too busy to adequately address their needs at certain junctures, and delay the repair process until it can be adequately addressed. Just because an insurer has an assignment at a particular moment doesn’t mean he or she can’t rearrange the schedule a bit, Sefcek says. “Respect the time of each other,” he says. “You need to work on collaborative time. … In the long term, it will improve the relationship.”

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D R I V E R ' S S E AT

DON'T IGNORE THE VICTORIES

Don't Ignore the Victories A high-volume operation, already down one person, loses another key team member (for non-work-related reasons, no less) at a peak moment of production. The void left behind seems almost insurmountable, as every person on the team is already stretched to (or past) his or her capacity. And the bigger problem: Customers don’t care; no one wants excuses. There’s a deadline and it needs to be met. Sounds familiar, right? So, what do you do? Well, I can tell you firsthand; this story is about our team at FenderBender over the last month or so. A lot goes on behind the scenes here to produce this publication each month, and honestly, we prefer to keep it “behind the scenes.” But I bring up this story for a very specific reason, which I’ll get to a little later. First, our solution: Just as you would likely do, we divided up the remaining work; everyone took on more and everyone pushed forward. But it’s never quite that simple. You can’t tell people who already work extremely hard to just work harder, put in more hours and figure it out. It’s not fair to them, and it’s not realistic. Instead, everyone decided to work smarter—and work together. They shared interviews, they tag-teamed stories, they picked each other up when they needed it. And, in the end, they got it done. Now, here’s my reason for sharing: This was a major victory for us, and I want to recognize my team for it. I am incredibly proud and constantly humbled to work with such selfless, motivated and talented people. At the rapid-fire pace we work at (and all of you do, as well), it’s easy to take success for granted. It’s easy to focus only on mistakes. Don’t. Celebrate success. Appreciate the wins. Recognize performance. No amount of words here will likely do it justice, so I’ll just leave it with two more: Thank you.

NICK SPAETH

Here's a story many of you can related to:

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

May 2017 | fenderbender.com 15

NEWS

IDEAS

PEOPLE

TRENDS

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

COURTESY OF COLLISION CENTER INC.

Curb Appeal Collision Center in Golden Valley, Minn., has differentiated itself in a number of ways, including landscaping. â&#x20AC;&#x201D; PAGE 24

May 2017 | fenderbender.com 17

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.

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QUICK FIX

SOCIAL MEDIA PLATFORMS LAUNCH LIVE FEATURES

A N A L Y S I S

New live features allow shops to connect with customers in a more personal way BY MELISSA STEINKEN

In late 2016,

social media sites like Facebook, Twitter, Instagram and YouTube added live features that opened the doors for businesses to connect on a more personal and instant level with consumers. Margaret Klemmer, who is part of the executive team at industry marketing firm Autoshop Solutions, says the live video features can showcase education and honesty behind a collision repair shop, which can result in building a strong, loyal clientele. Videos can be taken directly in the shop, and staff can give tours of the facility and offer real-time assessment of a vehicle. And many shop operators are already finding unique ways to utilize the technology to connect with customers. Bogi Lateiner, a mechanical repair shop owner and star of Velocity’s All Girls Garage, not only has used live features to establish herself as an expert and build a loyal customer base, but she also has utilized Facebook Live in an industry-wide project in conjunction with 3M and BASF to raise awareness of women in the industry. Lateiner and a team of about 80 women are restoring a 1957 Chevrolet truck that will be unveiled at BASF’s 2017 SEMA Show booth in November. “When you do a live video, it feels like [customers] are having a conversation with you versus watching a scripted video,” Lateiner says. The Future of Social Media? Facebook and Twitter rolled out live video in 2016 as a way for site users to connect instantly and more personally around the globe. Upon launching the feature, Facebook saw that users commented more than 10 times more on

live videos than regular videos. Five filters for the video creator were also introduced along with reactions like “Love,” “Haha,” “Wow,” “Sad” and “Angry” for viewers to honestly interact to the video. Twitter jumped on the live bandwagon in December 2016 when the company announced the ability to post live videos on Twitter that were powered by Periscope, previously a separate application used for live videos. Tips for Going Live Using the live features is simple, Lateiner says. She simply logs into her Facebook and clicks a button that says “live.” Upon going live, she recommends users only write a brief two to three sentence description of the video to avoid customers losing interest. Video creators should always be responding to the audience’s comments and questions that scroll alongside or at the bottom of the video. Lateiner says it is important even just to say “Hi” so the live video becomes more like a face-toface conversation. “It’s like having a Skype conversation with lots and lots of people,” she says. “It’s important to respond to any comments or questions that come through on the live feed even if it is just to say hello.” Lateiner recommends shops use the videos for attracting new customers and engaging on a personal level with existing customers. The fact that the videos are archived makes it easy to do both. She utilizes live videos to engage with her fan base from her days on All Girls Garage but also uses the Chevy truck build updates to

engage with her existing customers. Lateiner’s live videos target a male and female audience with emphasis on women in the industry. For example, her latest posts include showing a girl bust a lug nut loose in a women’s car care class and campaigns like “Brakes for Breasts 2016.” Jeanna Williams at Auto-Republic Collision Repair Shop in San Antonio, Texas, says her shop uses Instagram Live once per week for when her team paints vehicles. The shop has over 370 posts with more than 1,000 followers. Williams says that the live videos do help for generating some new customers because anyone curious about the shop from hearing it word of mouth usually go to social media sites first. Maximize the Use of Live Klemmer says these features are an emerging market for collision repair shops and there are several considerations to take. Problems that might prevent collision shops from using the features include the large time gap between when the customer initially dropped their car off for a repair and when they come back to pick up the fixed product. Klemmer says shops with primarily insurance work might also run into more difficulties as it can be more difficult to form a connection that leads to work further down the line. Despite not seeing a high demand for Facebook Live with her customers, Klemmer says video is the next wave of social media because the platform is continuing to evolve, despite being in its infancy. May 2017 | fenderbender.com 19

QUICK FIX

V I E W P O I N T

INSIDE CCC’S MOVE TO BMS

CCC’s vice president of market solutions discusses the company’s latest offering, Secure Share, and the impact it will have on the industry BY TESS COLLINS

In recent months, CCC’s Secure Share Network went live through CCC ONE. The system switches from the traditional estimating management standard (EMS) of transferring data to a business message specification (BMS) that CCC has promised will be more secure. For reference, according to the Collision Industry Electronic Commerce Association’s (CIECA) website, EMS is a schematic for exchanging the estimate data, and BMS is a collection of schematics designed to support a wide range of business processes that ensures that only the data needed is part of the exchange. The information provider will offer both options for a year, but in April 2018, the EMS method will no longer be available. According to Mark Fincher, vice president of market solutions at CCC, EMS was outdated and left a significant amount of 20 fenderbender.com | May 2017

information out in the open and vulnerable. CCC says that BMS will create a more secure network for its customers, and Fincher hopes that once shop owners and thirdparty app developers start using it, they’ll realize the benefits that a system like this will bring. Fincher shares the benefits of BMS and addresses common industry issues surrounding the standard.

share how we use, host and transmit the data. As far as direct access, there are many layers of security that CCC goes through. We put ourselves through rigorous security audits. We have a multi-layered approach to security and we’re taking all of the precautions to make sure that the information is as secure as possible.

BMS has been around for a few years now, but no other information provider has proceeded with using it until CCC ONE made the announcement in 2016. Why is now the right time?

There’s been some backlash within the industry because there will be a cost per workfile through BMS. What’s your response to this?

I think it comes down to two things: As we were looking at secure data, we saw this as a gap in the security solutions. The EMS format was launched in the 90s and it’s become outdated and has made it difficult for the industry to progress. We felt obligated to solve this for our customers. Another thing that made the time right is that we believe that the industry is in a place where the apps available in the marketplace are more capable to connect to cloud-based systems than they were two, three, four years ago. We looked at the landscape over the past year and decided now was the right time. As far as us being the first, we wanted to be proactive and find a solution before there was a problem. What void in the industry does Secure Share fill?

We wanted to provide a marketplace that would allow collision repair shop owners to connect to third-party app providers and have the ease of mind knowing that information was being sent in a secure format. Through Secure Share, all of the data is encrypted. There will no longer be data dropped off on a local hard drive where it’s vulnerable to being compromised. Before, shops were sending all of the information to the app providers, even if it wasn’t information that they needed to have. Through BMS, you can filter what information is sent to whom. Through this new approach, how do you view the ownership of the data? Who controls it?

There have been many claims as to who owns the data. One thing that we’ve never claimed is that we own the data. Our data policy is publicly available. We

There will be a 50 cent charge per workfile and a registration fee. Both of those have been waived through 2018. I think it’s controversial because it’s free to make transactions through EMS but not through BMS. I understand that nobody wants to go from something that was free to having a charge, but there has been a significant development cost to the solution and we will continue to enhance the system. We will be processing thousands of transactions every day that will need support to get third-party apps the information to them in a timely manner. Over time, I think that the app providers will realize the benefit of taking advantage of newer technology. The real-time transfer of data is more efficient and allows more visibility and enhanced filtering. Will there be any charge to shop owners?

No. The third-party app provider will be charged the fee. The workfile can be an estimate or a repair order. I think another misconception is that a charge will be issued for every update—that’s not the case. If an estimate is updated 20 times, it will still only cost the app provider the flat 50 cent fee. Another thing is that the third-party app provider will have a filter capability to select only the files that they need, so they won’t be charged for files that they do not want. The shop owner and the provider both have the option to filter the information that is shared. The shop owner always has to approve a change, so there will be no information that is shared without consent. We’ve developed a complex and robust functionality that is easy to use and helps both parties manage the messages that are transferred.

3M salutes our

veterans At 3M Automotive Aftermarket Division we are proud of America’s men and women in uniform. We’re equally proud to have partnered with the Collision Repair Education Foundation and body shops around the nation in helping nearly 260 military veterans and their family members launch careers in collision repair. The eeort means America’s heroes get rewarding careers after they serve, and our industry gets more great people.

We salute our industry Thank you to all the industry members who have donated, especially to the following multiple-donation organizations: • • • • •

Carubba Collision Colours Inc Heppner's Auto Body Herb's Paint and Body Kendrick Paint And Body

Copyright 2017 by 3M All rights reserved. 3M is a trademark of 3M Company. The Collision Repair Education Foundation is a national nonproot and tax-exempt student organization under the Internal Revenue Service Code, Section (501)(c)(3).

QUICK FIX

LIGHT HITS

SELF-DRIVING CRASH SPARKS REGULATIONS DISCUSSION A recent accident that caused a selfdriving Uber SUV to flip onto its side in Tempe, Ariz., has sparked a dialogue about autonomous vehicles, the Associated Press reported.

The recent crash occurred when an oncoming SUV turned left in front of the Uber vehicle, which carried two test drivers. There were no serious injuries from the accident, and the driver of the non-Uber vehicle was cited for a moving violation, but Uber responded by briefly suspending its self-driving vehicle testing in Arizona, as well as San Francisco and

FASTER REPAIRS = MORE REPAIRS = MORE PROFITS CollisionLink® can help with these and more!

Pittsburgh as it investigated the accident. Uber spokesperson Taylor Patterson said the company is operating more than a dozen of the 21 autonomous vehicles it has registered in Arizona, and some pick up passengers. In Arizona, companies like Uber only need to carry minimum liability insurance policies to operate selfdriving vehicles, and they aren’t required to track crashes or report any information to the state. Kevin Biesty, deputy director for policy for the Arizona Department of Transportation, said the state could set up a system to monitor local police accident reports involving self-driving cars but so far has chosen not to. Uber’s SUVs have been deployed in the Greater Phoenix area for more than three months, and police in both Phoenix and Tempe said they knew of no prior accidents.

CCC’S CRASH COURSE ANALYZES CHARGING FOR SCANNING CCC’s recently released 2017 Crash Course has provided data and insight into how OEM requirements for vehicle diagnostics might impact insurance claims. The average pre- and post-repair scans average $125 per claim, according to CCC’s research. Analysis of uploaded vehicle appraisals note costs ranging from $75–$169. CCC found an average labor time of 0.2 hours to 6 hours to complete calibration procedures, at an average hourly rate of $45.

REPORT: 2019 SILVERADO TO FEATURE ALUMINUM With CollisionLink, shops gain access to 26 OEM sponsored parts programs. CollisionLink provides shops with increased efficiency, competitively priced OE parts and a seamless workflow so shops can offer their customers quality repairs on time and on budget. Visit: OEConnection.com/FenderBender

22 fenderbender.com | May 2017

The new 2019 Chevrolet Silverado 1500 is rumored to have an aluminum body atop its steel frame, according to Car and Driver. The 2019 Silverado model was spotted test driving in Torrance, Calif. According to the report, General Motors was trying to pull off a misdirection tactic by dressing it up as a competitor. While the use of aluminum still has not been confirmed, General Motors did reveal that they would use a lightweight material to make the pickup lighter, said Auto World News. The 2016 sales for the Silverado were down by 4.3 percent from 2015, to 574,876. This figure is in contract to the Ford F-series, which saw sales rise by 5.2 percent, to 820,799. As for its powertrain, the new Silverado

News

For your daily collision repair news visit

fenderbender.com/lighthits

will likely come with a pair of base engines. The first will likely be an updated version of the truck's 4.3-liter V6 engine. The other will likely be a turbocharged four-cylinder engine which will boost fuel efficiency. These engines will probably come with an eight-speed automatic transmission. The Silverado 1500 will probably get a V8 engine as well. The 2019 Chevrolet Silverado 1500 is set to debut at the 2018 Detroit Auto Show.

Friday by the U.S. National Highway Traffic Safety Administration that debris left from manufacturing can restrict oil flow to connecting rod bearings, and since they are cooled by oil, that restriction can increase temperatures and cause the bearings to wear and fail; thus, engines could subsequently stall. Those who operate the aforementioned

vehicles could hear a knocking sound from the engine that increases in frequency as engine speed increases. They also could be notified via engine warning lights. Hyundai and Kia plan to notify owners and have their dealers inspect all vehicle engines. They’ll replace the engine block for free, if necessary, in a recall scheduled to begin on May 19.

NABR TO LAUNCH NEW CALIF. LABOR RATE National AutoBody Research (NABR) will launch a new version of its autobody labor rate survey, specifically tailored to the standardized labor rate survey format defined by the California Department of Insurance (CDI) in their new, recently implemented Auto Body Labor Rate Survey regulations. NABR's fully compliant survey not only will follow the standardized survey format but also will comply with the other technical and administrative aspects of the regulation, in order to support insurers who prefer to efficiently outsource the survey to a third party, and to provide collision centers with prevailing rate reports for their geographic area using a compliant survey from an independent source. To meet some of the regulation's more technical requirements such as geocoding, determination of qualified shops within a “geographic area,” and the calculation of a “prevailing rate,” NABR will leverage its Variable Rate System (VRS) online software technology, enabling VRS users to generate a compliant prevailing rate report for any body shop and geographic area in California. NABR's CDI-compliant labor rate survey will be available to all insurers with automotive insurance business in California.

KIA, HYUNDAI RECALL 1.4 M VEHICLES Kia Motor Corporation and parent company Hyundai Motor Co. are set to recall 1.4 million cars and SUVs throughout North America and South Korea because of risks that the vehicles’ engines are a threat to stall and fail, possibly causing a crash, according to the Associated Press. The recall covers models including the 2013-14 Hyundai Santa Fe Sport and Sonata, as well as 2011-14 Kia Optimas and 2011-13 Kia Sorentos. The companies said in documents posted

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4/24/17 10:20 AM

QUICK FIX

SNAP SHOP

COLLISION CENTER INC. LOCATION:

Golden Valley, Minn. OWNERS:

Kevin H. Johnson, Terry Geffre, and Rickie Lee Schmitz

SIZE:

20,000 square feet STAFF:

AVERAGE MONTHLY CAR COUNT:

136

ANNUAL REVENUE:

$3 million

B Y K E L LY B E AT O N

Collision Center Inc., located in the Minneapolis suburb of Golden Valley, Minn., promptly leaves an impression on its visitors, due in large part to a facelift the front of the property received four years ago. The shop’s three owners—Kevin H. Johnson, Terry Geffre, and Rickie Lee Schmitz—planted a maple tree to serve as the cornerstone of the landscaping project, and added a small bench for aesthetics, among other touches. The outdoorsy feel extends inside the shop, too, as Collision Center Inc.’s interior features numerous plants, including a roughly 30-year-old jade plant, which is intriguing enough that a customer once offered the shop’s owners $1,000 for it.

Collision Center Inc.’s paint department last received a major overhaul in 2000, but the shop’s operators saw to it that their painters were set up well. Johnson says he, Geffre, and Schmitz took great care to provide a paint area and booths that allow for a smooth flow of vehicles “Before we switched the layout of the paint department one of the booths was a dead end,” Johnson recalls. “You had to back the vehicle out after it was painted. The two new booths we installed are end to end, and you can drive straight through them.”

24 fenderbender.com | May 2017

EFFICIENT PAINT AREA

COURTESY OF COLLISION CENTER INC.

IMPECCABLE LANDSCAPING

Submit Your Shop Proud of your shop and want to show it off to your peers? Tell us about it at submissions@10missions.com.

The facility’s waiting area garners the most comments from customers, due to its relaxing vibe. Due in part to the aforementioned plant life like a ficus tree, and an abundance of natural light, Collision Center Inc.’s waiting room aura eases the tension of visitors who have recently endured car accidents. In 2002, the shop’s owners replaced the lobby’s floor, installing tile.

Something that truly sets the shop apart is the fact that one of the business’s three owners is almost always on site during business hours, and usually easily accessible for customers at the front of the shop. Johnson, for example, can usually be found toiling near the reception area. “Since we’ve all been here for 25-plus years, the customers all know us, so it makes it very comfortable for them,” Johnson says. “The most important thing is customer satisfaction.”

RELAXING LOBBY

UBIQUITOUS OWNERS

May 2017 | fenderbender.com 25

Always keep a strategy in your back pocket. As long as you have your phone, youâ&#x20AC;&#x2122;ll have access to the premier collision repair podcast from FenderBender. Every month, CollisionCast will bring on a special guest and dive deeper into a featured FenderBender story. Tangents, questions, opinions. These are business-building strategies straight from the source, for any situation.

Thereâ&#x20AC;&#x2122;s always more to the story. So here it is. Listen for free at fenderbender.com/collisioncast Also available in apps for Apple and Android (Podcasts, Stitcher, Pocket Casts).

QUICK FIX

NUMBERS

HOW DOES STAFF SIZE AFFECT CYCLE TIME?

Staff size might not have as large of an impact on cycle time as one might assume While it’s natural to think that large staff sizes would virtually guarantee stellar performance metrics for shops, that’s certainly not always the case, judging by statistics from the 2016 FenderBender KPI Survey. Consider these numbers, regarding the percentage of shops that claimed cycle times of four days or less.

STAFF SIZE: 3-4

STAFF SIZE: 5-6

STAFF SIZE: 1-2

57.1%

71.4%

Job-start-tocompletion time of 4 days or less

Key-to-key cycle time of 4 days or less

STAFF SIZE: 11+

52.1%

42.9%

35%

40%

23.7%

16.1%

Job-start-tocompletion time of 4 days or less

Key-to-key cycle time of 4 days or less

Job-start-tocompletion time of 4 days or less

Key-to-key cycle time of 4 days or less

Job-start-tocompletion time of 4 days or less

Key-to-key cycle time of 4 days or less

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.

May 2017 | fenderbender.com 27

QUICK FIX

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 TOMMYGUNN BY CHROMALECTRIX LLC WEBSITE:

chromalectrix.com USES:

Simulates sunlight COST:

$250 for the light, $150 for the headpiece attachment

TOMMYGUNN BY CHROMALECTRIX LLC A painter in New Jersey reviews a true sun light

PAINTER TURNERSVILLE COLLISION TURNERSVILLE, NJ

THE REVIEWER:

Bob Belh has been in the industry for over 30 years. Currently, Belh is a painter at Turnersville Collision in Turnersville, N.J.

THE SHOP:

Turnersville Collision is a Nissan- and Honda-certified dealership collision repair facility that services all makes and models. Belh says that the area he and the five other painters in the shop work in is fairly dark, which created a 28 fenderbender.com | May 2017

HOW IT WORKS:

Behl says that painters bring the light into the booth and pull the trigger to turn it on.

Once the light is on, it provides artificial sunlight over the entire panel. The lightspan provides even coverage and there is no color variation the further out the light goes from the center. Behl purchased a headpiece that allows him to attach the light to his head so he’s able to use both of his hands.

THE REVIEW:

All six of the painters at Turnersville Collision purchased their own TommyGunns after seeing what it could do. “When you’re spraying an area that needs to be repaired, it can look like everything’s covered by the human eye,” Behl says. “Then, when you pull it outside, it’s a different story. This has helped with re-dos.”

THE ROI:

Behl says that the TommyGunn has saved his shop time, money and materials. “We use the light on 95 percent of the vehicles that we spray,” Behl says. “Before, there was a 50–60 percent chance that we’d get the finished product outside and see a color variation. It paid for itself within the first job.” Behl says that the shop is able to get jobs through quicker when painters don’t have re-dos and it cuts down on material costs by having to use less paint.

COURTESY TURNERSVILLE COLLISION

BOB BELH

lighting problem when the time came to color match. The lighting in the shop would cause painters to see different variations of color. Because of this, when the vehicle was brought outside, the color was incorrect. The shop also uses waterborne paint, which Behl says has a tendency not to cover as well. He would spray inside and everything would look covered, but when he pulled the car into the sunlight, he would find missed areas. In order to solve these problems, the shop decided to purchase a light that would simulate sunlight so painters could spray vehicles and see what the color and coverage would look like outside. The shop purchased a light from a different company that promised to provide artificial sunlight and used it for a while. Although the light delivered on its promise, it was expensive and the staff had to share the one it was able to purchase. Three years ago, Tom McChesney, president at ChromaLectrix LLC brought the TommyGunn into Turnersville for a demonstration. The painters were immediately sold on the less expensive version that delivered the same results.

COLUMN

THE BIG IDEA KEVIN RAINS

Word-of-Mouth and Word of “Mouse” Leveraging the power of your unpaid sales force

MICHAEL HOEWELER

John Higgins, a referee

for the recent University of Kentucky versus University of North Carolina NCAA basketball game, is a case study on the ability of the average Joe to hurt or help a local business. After Kentucky lost the game, thousands of Kentucky fans took to Facebook and Yelp to leave one-star reviews for the referee’s full-time roofing business. Since being a referee for college basketball is not a full-time gig, John, like others, has another full-time line of work. In his case, he owns and operates a roofing company in Omaha, Neb. Once Kentucky fans got a hold of his Facebook page, his five-star ranking dropped to one star as thousands of reviews from fans loyal to Kentucky—but who had never used his business—destroyed his reputation on social media. Word-ofmouth used to be passed from person to person, one at a time. No longer. Now anyone with a computer or smartphone and access to the Internet can air their grievances or lavish praise on a local business and thousands of people will be able to read it. Word-of-mouth referrals are still the cornerstone of all marketing efforts whether online or off. I’ll never forget the first large referral partner I landed. It was truly the first big break that started me on the road to growth that has not let up for the past 13 years as we’ve grown our revenue 16 times. Someone ran across the hoods of eight brand new Volkswagens at the dealership right across the street from my recently acquired shop. At the time, we were only repairing roughly 10 cars per month so we literally could not handle the influx of eight jobs all at once. So we were given four and another area

shop was giving the other four. I sensed this was a great opportunity to make an impression and possibly land more work with this dealership in the future. We repaired, painted and detailed our four cars and returned them quickly. The paint matched well and the dealer was pleased with the outcome. The other shop did not perform quite so well. So we actually got to redo some of the work they had done, not to mention they took much longer, as well. From that day forward, we have been the preferred shop for that dealership and they have sent us hundreds of referrals over the past 13 years. Now, after 13 years of business, we have two locations and I am finding that in some ways, it’s like being at the starting line again in terms of gaining referral partners. It is a whole new community with a different demographic and a completely different ecosystem for gaining referrals. But the work is the same: getting people to know us, like us, trust us, use us and then refer us to others. I heard this process first from John Jantsch over a decade ago

who remains a trusted mentor to me through his writing and speaking to this day. And I don’t think it will ever change, though the tools and channels certainly change. The Internet has amplified word-of-mouth through review sites, most notably Google and Yelp. But it is still one person telling another person (or in the case of reviews sites, thousands!) that you can be trusted. Who are the people who get to your potential customers before you do? To name an obvious one, think of mechanics who routinely do maintenance on cars and are typically needed much more regularly than we are. How many of your potential customers do they get to see monthly for oil changes and brakes? When was the last time you got a referral from them? When was the last time you asked? To name a few others, insurance agents, tow truck drivers and the police are also great resources. Referral-based word-of-mouth marketing is still the best and least expensive form of marketing you will ever find. It never goes out of style. It never will.

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

May 2017 | fenderbender.com 29

THREE SHOP OPERATORS DETAIL THE INS AND OUTS OF LEADING A BUSINESS TO PROFITABILITY BY TRAVIS BEAN AND BRYCE EVANS PHOTOGRAPHY BY SCOTT GABLE

30 fenderbender.com | May 2017

Instilling Autonomy Michael Walters took his four-shop network to new heights by developing a team structure that promotes healthy competition and accountability.

May 2017 | fenderbender.com 31

T H E N E T R E S U LT

After all, the tiniest of issues can hinder a repair. One small oversight can derail an entire day of workflow, put the shop at a standstill, and, ultimately, kill profitability. Michael Walters gets why you’re worried about it; he has four collision repair facilities to operate. He could, in theory, spend his days running between each of West Herr Collision Center’s upper-New York dealership shops, micromanaging every aspect of the repair process, looking over the shoulder of each estimator, and eavesdropping on his CSR’s calls. But he’s not losing sleep. He’s not overworked. He’s not worried. And it’s not because of the numbers Walters’ team produces—including a near 20 percent net profit. No, it’s actually the opposite; those numbers are the direct result of Walters’ mindset and approach to operations. “Simplify,” he says. “Simplify everything.” So, let’s state this simply: Profit just comes down to math. Maximize your revenue, minimize your expenses, and your business will truly make money. Yes, there are a lot of variables and moving pieces thrown into that equation, but Walters—just like the two other shop operators in this piece—says that controlling those factors comes down to some simple (there’s that word again), foundational business-building basics. Don’t overthink. Don’t overcomplicate things. Get out of your own way. Find the simplest approach, refine it, and allow your business to thrive.

PROFIT FROM LE ADERSHIP THE OPERATOR:

Michael Walters, collision director, West Herr Collision Center THE APPROACH:

Systematic leadership THE NET RESULT:

A team of 110 that works autonomously throughout four locations to produce a 16-plus percent net profit

Independent collision repair facilities have a distinct advantage over dealerships and large MSOs, Walters says, and it comes down to autonomy—indy facilities have a unique, agile approach to operations in that they can quickly adapt to changes, obstacles and issues. That flexibility can get lost in a corporate culture, or when trying to push change across multiple platforms at multiple locations. “That’s why we’re dealer body shops, 32 fenderbender.com | May 2017

but run them as independents,” Walters says. “All of our competition in our markets that are close to us in volume are independents. … We want to be comparable [to them] and take anything and everything.” That’s a tall order with four facilities, and that’s why Walters focuses on leadership—or rather, setting a surefire system of full organizational leadership that starts with himself and works its way down to his facility managers and their teams. Again, the concept is simple: If you have the right people in the right places, all with the same mindset, vision, focus and processes, then it’s easy to trust those people to make decisions to benefit the organization, Walters says. Walters has been at West Herr Collision for 21 years, and over that time he’s developed a systematic leadership approach that allows that kind of autonomy—that leaves each facility manager operating their shop similar to a high-performing independent. Here’s how it works:

1. START AT THE TOP. Walters has to set the tone for his facilities—and, no, “setting the tone” isn’t an intangible cliche in this case. As the head of the company’s four collision facilities, it is Walters’ responsibility to formulate the shops’ overall operational philosophies, vision and goals. Culture is a key, Walters says, and it’s created by setting those standards within the business, then serving as an example for them. Start by developing a mission statement, a clear company vision, and long-term goals for the business and an action plan for how they can be achieved. 2. GIVE MANAGERS TRUE RESPONSIBILITY AND DIRECTION. Walters has regular and consistent communication with each of his four body shop managers, but he also has one set monthly meeting in which the five of them all get together in person. “The last year or so, we’ve really been focusing hard on driving gross profits to the bottom line,” he says. “We have these monthly meetings and go over everything.” He has three goals and focus areas for each meeting: GOAL 1: EXPENSE CONTROL

Walters doesn’t want to skimp on necessary spending (see the sidebar: “Prepare for the Future”), but he does want his managers focused on unnecessary waste of resources. Expense control needs to be top of mind with his team. The simplest way to do this is by focusing on KPIs and setting specific benchmarks. Overall, each shop needs to hit a 60 percent gross profit—and if numbers aren’t there, Walters works with the manager to break it down to see where the discrepancies occur. “It all adds up,” he says. “Look at labor, look at parts and materials, look at costs. If we set these data points, and a shop is 5 [percent] off, then where can we find that 5 percent?” Often, this leads to the analysis and deconstruction of processes and systems, focusing on fine-tuning operations to produce those desired results. In the end, if you control expenses,

Company Culture West Herr Collision Centers made profitability a team effort by ensuring that each team member understands performance goals.

profit will be there if your team performs, Walters says. GOAL 2: FRIENDLY COMPETITION

By holding these meetings and analyzing numbers with his managers, Walters has created a dynamic of friendly competition between the four shops. “We want the four stores to compete with one another to drive improvement,” he says. “We want to help each other get better.” Competition not only pushes performance, but it also helps each manager both

P R E P A R E

—

F O R

T H E

F U T U R E

Bottom line: “If you don’t understand how to repair vehicles today, you shouldn’t be in this business,” says Michael Walters, collision director for the four-location dealer-based West Herr Collision Centers in New York. “You need to manage your investment, but it’s not all about gross profit; it’s about understanding technology and making sure the cars are getting repair the way manufactures want them repaired,” he adds. Walters takes a holistic approach to it, wanting each facility and each team to be equipped to handle the vehicles they repair. Look at your vehicle mix, look at your customer mix, and ensure you can repair everything to safe and proper standards, he says. In the end, a well-trained, efficient team will pay back that investment very quickly.

May 2017 | fenderbender.com 33

T H E N E T R E S U LT

teach and learn from one another. If one shop developed a unique solution, that improvement can be passed along to the other three. Competition is healthy, Walters says, and does not have to turn ugly if all parties have the same, unified goals and vision. GOAL 3: AUTONOMOUS LEADERSHIP

Walters sets the overall goals and vision for each shop, but each manager is responsible for working with his team to set the specific action items required to achieve those marks. Each manager also sets the specific budget for his facility (a number determined according to the overall profit goals Walters lays out). This includes training for technicians and front office staff. That’s a crucial part of not only improving, but also being able to maintain the quality of repairs required. “Each manager has their own ability to manipulate their budget as they need,” he says. “We have requirements—we want all techs to be fully trained, I-CAR Platinum across every tech. … We want to be OEM certified by most manufacturers as well. We have 23 car lines in our dealership, so we’re what you’d call a non-denominational shop. We need to invest very heavily.” From the budget, separate goals are defined and acted upon by the managers and their teams. The manager is responsible for the micro goals of that facility, and for outlining the path to achieving them, which is handled in the manager’s meetings/interactions with his staff. 3. HAVE MANAGERS PASS RESPONSIBILITY TO THEIR TEAMS. Each manager holds specific meetings with both technicians and front-office staff at his respective facility. Some meetings—like larger goal-setting projects—occur on a monthly basis; others, such as KPI reporting and process evaluation, happen on a fluid, weekly or even daily basis depending on the need and department. Because managers act as their own independent operators of that facility, they are responsible for bringing the vision and approach of the company to the shop level, articulating projects, systems and goals to the team. They monitor more specific KPIs with their teams, like technician 34 fenderbender.com | May 2017

efficiency, cycle time, touch time, etc. Those numbers, Walters says, play into the bigger picture of profitability. By taking this approach, you delegate responsibility throughout the team, Walters says. Instead of it being an owner or operator to ensure profitability, it’s a team effort. There are systems in place. There is a level of oversight, evaluation and analysis at each level. And, when you add it up, the result is an autonomous team making decisions for the betterment of the company— and making money. It’s that simple, Walters says.

PROFIT FROM PL ANNING THE OPERATOR:

Jim Smiciklas, co-owner, Express Collision Center THE APPROACH:

Creating an operational “blueprint” to overcome typical profitability killers THE RESULT:

Smiciklas’ shop tops 20 percent net profit and 160 percent efficiency each year

Take a peek at your numbers. Look through the data, add it all up, and answer a simple question: How is your business performing? “Some people really don’t know, even with the numbers sitting in front of them,” says Jim Smiciklas, co-owner of Express Collision Center in Las Vegas. “It doesn’t matter if it’s an independent or a dealer, they don’t understand their financial means and how [operational aspects] affect it. They fly by the seat of their pants and hope things add up.” Express Collision Center tops 20 percent in net profit each year, and hits at industry-leading levels in nearly every measurement. And after 46 years in the industry, which included a spell as a management trainer for BMW dealerships, Smiciklas says it all comes down to a simple problem-solution mentality. You need to dictate your own profit, Smiciklas says. Don’t let other outside influences affect it. Take control. PROBLEM 1: UNDERSTANDING PROFIT Solution: Everything starts, Smiciklas says,

with finding your true break-even point— down to the number of vehicles and time of the month in which it’s hit. To truly understand how you make money, you must know what it takes to simply pay the bills. Smiciklas says to plot it out on paper. Set up a business plan that identifies your true break-even point, and profit points that follow based on the goals you want to achieve. Smiciklas looks for a 20 percent net (and gets it), which means he needs to set his business up to achieve that. Focus on: PROPER STAFF SETUP. Smiciklas and his wife, Renee, still take an active role in the business. “Because of the size we are, I handle some of the estimating work,” he says. “I run the office and my wife works with me. Then, we have an estimator.” The message here: Don’t hire unnecessarily. WORK MIX AND MARKETING. Determine the type of customers you want to attract, based on the structure of the business you’ve set up. Smiciklas does not do DRP work, and never has. It means he puts an added emphasis on marketing to attract his customers (money that he feels pays off from gaining in margins on non-DRP work). He looks to online outlets to set his business apart; the shop currently has all five-star reviews from Yelp and receives roughly 18 percent of its total workload through that site. SET PROPER REVENUE EXPECTATIONS. Smiciklas’ team of technicians

top 160 percent efficiency, which allows Express Collision to project $1.5 million in sales for 2017. Without understanding a realistic revenue goal for the business, all other planning will be moot. PROBLEM 2: GROWTH DOES NOT EQUATE TO PROFITS SOLUTION: Let’s rephrase that quickly: Growth does not equate to profits unless costs are controlled. To increase profitability, you need to control expenses in the business, Smiciklas says. Smiciklas does this in a number of ways (we already went over the staffing roles of the front office), but he also looks at saving in labor costs in terms of time and efficiency, rather than salaries and pay. Don’t waste a team member’s time with tasks that are unnecessary. One particular focus area can be your front

counter, he says. A simple tip: Rather than wasting an estimator’s time by requiring them to call each customer a certain amount of times on a certain amount of days during the repair, have them check with the customer for their preferred method of communication and their preferred frequency. “Why would we waste their time and ours?” he asks. “It is possible to over communicate, which costs time and efficiency.” Also, Smiciklas suggests using technology to to cut out unneeded and outdated procedures in the shop. If you don’t use an electronic management system to monitor your numbers, start now, Smiciklas says. That’s a basic starting point, and once you have that, continue to find additional tools that will help you cut costs.

PROFIT FROM CONSISTENCY THE OPERATOR:

Bill Cochran, owner, Cochran Coach Works THE APPROACH:

Build a consistent team—and retain it THE NET RESULT:

A consistent focus on team-building and employee retention that leads to a 20 percent net profit

Bill Cochran’s military career has played a deep role in his business’s development. For starters, Cochran Coach Works is in Perry, Ga., which by all accounts is a true military town. The sign outside his shop reads “Veteran-Owned Business”; he hung that up in the early days, and his revenue quickly tripled. Then there’s Cochran’s approach to operating his $2.5 million facility; everything stems from a team-first focus. “A lot of people in this town like using us because they know once we do the job, we’ll stand behind it,” he says. “No customer complaints. No comebacks. We do it the right way—and we’ve done it this way for 20 years. And the reason it’s possible is the people.” Profit, he says, starts with people; it starts with your team, and your ability as a leader to recruit and retain talent. Nearly every member of Cochran’s 12-person team has been with the company for more than 10 years, and it’s a key reason he feels his

COCHRAN COACH WORKS

WEST HERR COLLISION CENTER

EXPRESS COLLISION CENTER

FOUR SHOPS IN HAMBURG, N.Y.

LAS VEGAS

OPERATOR:

BILL COCHRAN

OPERATOR:

JIM SMICIKLAS

SHOP SIZE:

MICHAEL WALTERS

SHOP SIZE:

— LOCATION:

PERRY, GA.

— LOCATION:

8,000 SQUARE FEET

STAFF SIZE:

AVERAGE MONTHLY CAR COUNT:

12 AVERAGE MONTHLY CAR COUNT:

100+

— LOCATION:

OPERATOR:

10,000 SQUARE FEET STAFF SIZE:

EFFICIENCY:

AVERAGE MONTHLY CAR COUNT:

100

150+%

ANNUAL REVENUE:

PRODUCTIVITY:

ANNUAL REVENUE:

$2.5 MILLION

970

110+%

$1.1 MILLION

EFFICIENCY:

KEY-TO-KEY CYCLE TIME:

130+%

5-7 DAYS

160+%

PRODUCTIVITY:

TOUCH TIME:

PRODUCTIVITY:

110+%

2-3 HOURS

110+%

KEY-TO-KEY CYCLE TIME:

AVERAGE TICKET:

KEY-TO-KEY CYCLE TIME:

5-7 DAYS

$1,875

11+ DAYS

TOUCH TIME:

GROSS PROFIT:

TOUCH TIME:

4-5 HOURS

55+%

2-3 HOURS

AVERAGE TICKET:

NET PROFIT:

AVERAGE TICKET:

$3,500

16+%

EFFICIENCY:

$2,300

GROSS PROFIT:

60+%

NET PROFIT:

16+%

shop tops 20 percent net profit each year. Maintaining that staff, he says, is his job as an owner, and is simpler than many might think. He helps outline three key tactics to employee retention, and how each plays a critical role in a shop’s profitability. THREE KEYS TO EMPLOYEE RETENTION 1. TREAT YOUR TEAM RIGHT. Cochran says this should go without saying, but too often still needs to be repeated as a reminder: Treat your team the same way you would want to be treated if in their positions. This includes transparency with business performance, KPIs, and review of work. Put in the time. Give praise when deserved. Give assistance when needed. More than anything,

Cochran says, show appreciation. A team that feels appreciated will perform at a higher level. 2. TEACH; DON’T CORRECT. Mistakes are moments to teach, not correct or blame, Cochran says. “Don’t cuss them out for something they messed up,” Cochran says. “That doesn’t help them and it doesn’t help your shop.” Constant improvement has to be a focus, and that mindset leads to better attitudes, more collaboration and teamwork, and in the end, increased production. 3. OPEN-DOOR POLICY. Cochran works to have all members of his team feel open in both staff and one-on-one meetings to hash out any issues they may have. Problems that linger tend to turn larger and larger. Get ahead of issues, and help team members solve them on their own. May 2017 | fenderbender.com 35

Larry Constable used to work 100 hours per week. Then, he reprioritized. Now, the shop owner leads a rich, full life.

BY K EL LY B E ATO N PHOTOGRAPHY BY SHELLI MCKENNA

36 fenderbender.com | May 2017

Keys to Delegating Larry Constable has found time to pursue his passions, including starting a community center, by learning to delegate and step back at his body shop.

May 2017 | fenderbender.com 37

PROFILE

THE POINT OF IT ALL

arry Constable embraced shop life so thoroughly early in his career that he once worked 100 hours per week for four full years. He loved the first shop he operated in Coatesville, Pa., so completely that he created an on-site living quarters for himself there. A few years later, in 1985, L.C. Auto Body moved to a converted chicken house on a farm in tiny Parkesburg, Pa. That farm location featured a few squatters (chickens who had remained in the back upon purchase), and shaky electrical wiring, but Constable was devoted to it nonetheless. The young shop owner had forged a career that aligned with his calling in life. Yet, a thought eventually gnawed at him: Was Constable content, or obsessed? “I was thinking, ‘How can I keep doing it this way?’” he recalls. “I was the guy painting every single car, and what I learned was, if you do it yourself—D-I-Y—you will D-I-E, because you can’t keep working 100 hours a week. “When I was 30 years of age, I was about burnt out. … Seemed like all I did [in] those early years was work and barely pay the bills.” Constable didn’t completely get his priorities straight until the mid 1990s, when he met, and soon married, Sue, a registered nurse familiar with the chaos of emergency rooms. She couldn’t fathom why he obsessed over monthly car counts, and forced him to put things in their proper perspective. With his wife steering him toward a more selfless life, Constable soon found his next passion. He began to delegate at work and started giving to those in need during his free time. The change suits L.C. Auto Body and its owner well; the shop currently boasts an annual revenue of $4 million, and Constable has ample opportunities to spend time following his philanthropic passions.

Giving Until It Hurts

Guided by his wife and his strong faith, Constable came to the conclusion that he wanted to mentor younger generations. The shop owner led Bible study. He facilitated youth retreats. And he became a supporter of charitable entities like the Chester County Food Bank. But he wanted to do even more. That desire laid the foundation for the creation of The Point youth organization in 2001 in Parkesburg. The organization began in the Constables’ living room, though the couple soon envisioned something larger. Constable researched southeast Pennsylvania, took note of seven established youth centers, 38 fenderbender.com | May 2017

and toured those facilities on Saturdays with his wife. “And we said, ‘How can we do that in Parkesburg?’” he says. Before long, with the aid of gracious commercial real estate owners and donors, The Point took over a solid facility. Then, in 2013, The Point took over a truly immaculate, 22,000-square-foot facility on Main Street in Parkesburg, which includes amenities such as an indoor skatepark. The facility, which boasts over 300 volunteers, has an overall mission to provide a safe environment that empowers youths and their families. In recent years, Constable has tried

Finding the Time Larry Constable (left) spends the majority of his time on his philanthropy efforts, while also running a $4-millionper-year collision repair business.

his hand at every charitable endeavor under the sun, including serving as The Point’s chairperson. Doing so while also running a busy shop with 27 employees, however, requires masterful management of both resources and time.

Working Smart

Constable used to wake up at around 2:30 a.m. each day. The owner of L.C. Auto Body still starts his work days early—at around 5 a.m.—but he no longer keeps the hours of an obsessed NFL head coach. Now he occasionally leaves work at around 3:30 p.m. to take part in Bible groups. And, believe it or not, everything still gets done around his body shop. These days, Constable sounds like a man who leads a largely stress-free existence. A key reason for that: The term “delegation” has entered his vocabulary. “Delegating is very difficult when you’re a Type-A personality,” he says. “But here’s what I’ve found in

KEYS FOR PHILANTHROPY

delegation: There is so much freedom when you delegate to someone and they’re better than you.” Years ago, Constable transitioned an energetic paint prepper—ingrained with an impressive work ethic and integrity—into his shop’s office. He soon discovered that employee was a better “business guy” than he ever could’ve imagined. That employee, Kevin Mattson, is now general manager of Constable’s entire facility, and runs the day-to-day operations, freeing up the owner to concentrate on whatever he deems fit each day. That has provided Constable with ample peace of mind. “I was a very, very poor delegator, very poor communicator early on,” he says. “Just because I didn’t have time. That’s what you always say: ‘I don’t have time. But I’ve just gotta get this done.’ Well, the one thing you realize as you get older [is] I’ve got to have a balance of life.”

Timing Is Everything

These days, Constable budgets his

time like he budgets his shop payroll. In recent years—as he has spent time supporting endeavors like the Parkesburg Library, or serving on the board at a local bank—Constable has given great care to accounting for each hour of his day. “I used to say, if I had a 36-hour work day, I’d work 24 and use the other 12 to sleep. Well, you can’t do that,” the shop owner says. “So, how do you get all that done? You just have to … really plan. It’s like building a house: If you don’t have a set of plans, it’s not going to end well.” Constable has learned several tips that help him carve out time for community endeavors: Utilize a calendar app: “I live by the calendar on my phone,” Constable says. If he sees that his schedule is overflowing, he’ll use his calendar app to swiftly shuffle around activities, prioritizing when necessary. Have SOPs in place: Having timetested procedures in place ensures that a

Larry Constable, the owner of L.C. Auto Body in Parkesburg, Pa., has partaken in numerous charitable endeavors throughout his long career. He provides tips for finding ideal community ventures for shop operators. — Being involved in a community, you’ve just got to show up to those meetings—township meetings, or associations, the YMCA. The local churches normally know what’s going on and the families really in need. Be involved in your local technical colleges; that’s where you can harvest your future technicians. There are walks, there are fundraisers. Put an advertisement on a T-shirt for those walkers. Sponsor Little League baseball. You see those kids and they have your branding, and you can expense that off as advertising. And you get the tax deduction on that. There’s a way to help others in your community by budgeting that, and saying, “Where am I going to give my time, talents and effort?”

shop will remain running smoothly, even when its owner ducks out for an extended chamber of commerce luncheon. Constable suggests working alongside your employees for a period of time, to hammer home your daily shop goals. Consult with those close to you:

Before he devotes his afternoon or evening to a community activity, Constable first consults with his better half, making sure she’s on board with the decision. “I’m going to talk to my wife about it,” he explains. “It’s going to affect my wife when I volunteer for another board, you know?” May 2017 | fenderbender.com 39

PROFILE

THE POINT OF IT ALL

L.C. AUTO BODY — LOCATION:

PARKESBURG, PA. OWNER:

LARRY CONSTABLE STAFF:

27 AVERAGE MONTHLY CAR COUNT:

145 SIZE:

16,500 SQUARE FEET ANNUAL REVENUE:

$4 MILLION

Don’t commit too quickly: Constable says he has, on rare occasions, been burned when committing to activities without full consideration of his schedule. “It’s OK to say no,” he says. “If it’s a business decision, I’m not going to make that right now. I’ll wait 24 hours and see how I feel about it. … I’m going to pray about it, and then I’m going to plan, and then I’m going to proceed.”

A Community Pillar

It has been 35 years since Constable took over his old facility in Coatesville. The memories of him spending the night in his shop have long since faded. He’s more mature now, more 40 fenderbender.com | May 2017

grounded, and infinitely more content. The days of a non-existent home life are a distant memory for the proud husband and father. His employees are loyal (a few have been with him for the better part of a quarter century), and he has become an indispensable member of his town of nearly 3,600 residents. And Constable’s business is strong. L.C. Auto Body boasts an annual revenue of $4 million. In early 2012, the business moved into an exquisite, 16,500-square-foot facility in Parkesburg, Pa. The shop owner occasionally gets thank-you cards in the mail, following

charitable deeds he partakes in, such as providing clothes to the needy during the Christmas season. He was even named Lions Club citizen of the year in his area in 2005. These days, Constable lives a rich, full life beyond anything he could’ve ever comprehended at the age of 30, when his “D-I-Y” shop mentality became untenable. “When you’re working 100 hours a week, you’re just tired all the time,” Constable says. “There’s got to be a central focus in your life—what you’re doing, and why you’re doing it. Otherwise, it’s meaningless.”

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strategy IDE A SHOP HUMAN RESOURCES CASE STUDY

DEVELOPING MEMORIES PHOTOGRAPHY

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Numbers Focused Kevin Lockhart turned to improving touch time to turn his shop's lagging KPIs around and improve productivity. â&#x20AC;&#x201D; PAGE 48

May 2017 | fenderbender.com 43

WHO WE ARE

Auto Job Central is a job board dedicated only to the auto repair industry.

WHAT WE STAND FOR

Connecting shop operators with qualified techs, estimators, painters and more in one centralized spot.

autojobcentral.com

FREE LISTING

S T R AT EGY

IDEA SHOP

Easy Solutions Color match libraries are essential to making sure the right match is found quickly and more efficiently.

Create a Color Match Library A process-focused solution to speed up the color matching process A body technician wouldn’t just grab a hood and assume it’ll fit on the car, says Gary Kilby, technical manager, North America for Valspar Automotive. Paint, he says, should be treated the same way that parts are— before the painters start working on the car in the spray booth, a perfect color match should already have been created. This is why color match libraries are so important, explains Kilby, a veteran painter with more than 20 years of experience. Color match libraries index all of past spray outs, make finding the right match easier and make paint department employees more efficient. “Creating a color match library will help avoid costly repaints,” Kilby says. “It’s important to make sure that the paint that we apply in the booth to the car has already been determined a good match. We shouldn’t wait until the car is in the booth to find out that the color didn’t match.” Kilby shares his tips on how to create a color match library from scratch.

To start, an SOP needs to be created for how the sprayout cards will be created.

The sprayout cards have to be created in the same manner that you’ll paint the car. Many painters think that the sprayout process is not a valid process and don’t make it a priority to make the sprayout card correctly. If you rush through the process and don’t allow proper flash time between coats of base, for example, that’s going to affect your color.

AS TOLD TO TESS COLLINS

You have to make sure that your sprayout duplicates the process you’ll put on the car. Create the sprayout cards in the same

First of all, creating a color match library has to be driven from the top down.

environment that you’ll be painting the vehicle in. All of those factors, like air pressure, can affect color match.

Owners need to make sure that creating a sprayout card is not optional and that everyone needs to do one. If you’ve made the commitment to do this, it needs to be clear that this is the process that everyone will follow. THINKSTOCK

making a color library not just today, but tomorrow when you’re in a hurry. This is a decision that you’ve made and you need to keep doing it. Once you commit, every car that you paint needs to have a sprayout card done for it. Most repairs require some kind of part replacement and that’s a good time to make the sprayout card

When you start out, you have to be all in. You need to dedicate yourself to

The only materials you’ll really need are sprayout cards. We recommend using

metal sprayout cards because they have an e-coating and primer on them. That way, all the painter has to do is clean them up a bit with pre-paint cleaner— there’s no need to sand and scuff. They may cost more upfront but they produce

a color match much better than the paper ones and they are less likely to curl up in high humidity. Don’t always assume that you’ll remember what the sprayout card was for. Make sure

that the back of each sprayout card has all of the pertinent information on it. We recommend the OEM name, color code, formula number, what type of spray gun was used and the air pressure. The goal is that someone with no prior knowledge of that spray out can look at the back of the card and duplicate the job. Organizing the sprayout cards is up to the painter’s preference. Some organize

based on OEM format and put all of the GM colors and codes in one place, for example. Some organize based on hue. Using this method, a painter may find a color that matches really well, even if it’s not the intended color of the car. If you’re just starting off, this method probably wouldn’t be an option. As you grow your color library, you’ll have the opportunity to look at it in different ways. The color variances should be grouped and stored together on a ring. Cabinets can be used to house the sprayout cards. The cabinets should have functioning doors that close. That cabinet is pretty critical because even if you spend a lot of time putting together your sprayout cards, all that time is wasted if they’re thrown on benches and they get lost or destroyed. May 2017 | fenderbender.com 45

S T R AT EGY

HUMAN RESOURCES

Making Military Veterans a Solution to Workforce Struggles How to do your part to help lower military veteran unemployment rates—and find driven employees in the process

On Nov. 6, 2016,

Rich Lawson had a day to remember. At the Texas Motor Speedway in Fort Worth, Texas, the estimator from Portsmouth, Va., rubbed elbows with Richard Petty. He met 2016 Sprint Cup Series rookie of the year Chase Elliott. And, he rode in a pace car for two laps prior to the AAA Texas 500, as it ripped around the track at nearly 100 mph. The U.S. Naval veteran, who grew up around rabid racing fans, was elated that day, as he was one of 10 veterans currently working in the collision repair industry to be honored by 3M’s automotive aftermarket division. “I told my dad, we had gone to so many races to watch the show, and that day we were part of the show,” Lawson says. That day, Lawson reflected on all he had been through over the last decade, starting with two tours overseas, where he served during conflicts such as Operation Iraqi Freedom, and including nearly a year spent searching for a job once he had retired from the Navy. The joy Lawson felt that day is something he wished 46 fenderbender.com | May 2017

he could share with his old shipmates, many of whom have spent years searching for solid work. As Lawson knows, transitioning from military life to civilian life—and finding a solid post-military career in the process— can be quite tough. He wishes more veterans could find a few lucky breaks like he did, when he landed a job at a Rick Hendrick Collision Center in Portsmouth. Lawson knows that shop owners who hire veterans typically add dependable leaders, with a solid sense of responsibility (plus, shops can get tax credits, as noted in the accompanying sidebar). “I definitely struggled to find work,” Lawson says. “It can be very discouraging. … There’s no real natural bridge for the gap from [military life] to where I am now.” Fortunately for veterans interested in working in collision repair, there are organizations eager to bridge that gap. SURPRISING STATISTICS In recent years, veteran unemployment figures have improved, but remain eyeopening. In 2016, the unemployment rate

among male veterans in the 18–24 age range stood at 4 percent, and the unemployment rate among all veterans was at 4.2 percent (overall unemployment in the U.S. was at 4.9 percent by late 2016). Those statistics don’t sit well with Sean Huurman, Service King’s chief human resources officer. “We haven’t done a good job of really connecting the dots, as organizations, on what we can do to help [veterans] on this side of the equation, to be ready for their next stage in life,” he says. Multiple companies in the collision repair industry are making concerted efforts to help military veterans with regard to employment, though. Service King, for example, created a veteran hiring initiative called Mission 2 Hire, in which the company aims to hire 500 military vets and spouses over a five-year period. Similarly, 3M works with the U.S. Chamber of Commerce’s “Hire Our Heroes” campaign in an effort to drive the employment of veterans and their families. “These are people that are coming out with a tremendous amount of skill, a tremendous amount of knowledge that can

THINKSTOCK

B Y K E L LY B E AT O N

be utilized in the private sector,” Huurman says. “It’s incredible the amount of training and development hours that are spent” on the military.” Veterans’ leadership, respect for the chain of command, and ability to work within a team dynamic also make them ideal employees, he says. Emory Davis, collision center director at Dale Earnhardt Jr. Chevrolet in Tallahassee, Fla., says military veterans typically make for employees that are especially driven. “They’re very punctual,” says Davis, whose shop has earned a reputation for giving veterans employment opportunities. “They’re definitely time-driven—it’s instilled in them.” In Huurman’s time with Service King, the company has found that the skills of military veterans often translate well to roles as service advisors, general managers, or especially body technicians. “We find that transitioning military and veterans make fantastic body technicians,” Huurman says. “Many of them received training on various aspects that translate very well to the body technician role. And, if given the opportunity to receive some fine-tuned training as it relates to collision repair, that transition can happen very quickly.”

TRACKING THEM DOWN There are many resources that companies can tap to find solid, skilled veteran employees, Huurman notes, on both the state and national level. He recently spoke with the Texas Veterans Commission, for example, and was told an unsettling story. “They were talking about employers, and the ability to match employers up with veterans,” Huurman recalls. “And there’s literally money that’s available for subsidies and other things that these organizations have at their access that they’re not able to give away, because employers simply aren’t taking advantage.” Huurman has plenty of tips for employers who are motivated to use all available resources to find ideal veteran job candidates. Among them: Build relationships with veterans organizations. Forge connections with orga-

nizations like the aforementioned statewide veterans association, or even Employer Support of The Guard and Reserve (ESGR) branches, in an effort to find quality job prospects with military backgrounds. Begin a military hiring program. The Center for America, a 501(c)(3) organization, advocates the implementation of such a setup, which includes involving employees with military experience to help attract veterans, and leveraging your

TAKING ADVANTAGE OF TAX CREDITS Shops that hire eligible, unemployed veterans can earn tax credits through the Work Opportunity Tax Credit (WOTC) program. Here are key elements to keep in mind for employers aiming to take advantage of the program. SOURCE: THE U.S. DEPARTMENT OF LABOR

• The WOTC is a federal tax credit available to all private-sector businesses. • Employers are eligible to participate in the WOTC program if they pay Federal Unemployment Tax Act (FUTA) taxes to the IRS each year. • Employers must hire a new individual to be eligible to claim the tax credit. • An employer can’t claim a tax credit for the same employee in consecutive years. • Employer must ensure that an application is submitted to his/her State Workforce Agency (SWA) no later than 28 calendar days after the new hire’s start date. • A step-by-step instruction sheet for filling out the necessary certification request/ application forms can be found at: fenderbender.com/submittingapp For more information, visit doleta.gov/wotc (where employers can click on “State WOTC Coordinators” on the left rail and then click on their state to find their state’s WOTC coordinator) or irs.gov. The Department of Labor also encourages employers to contact their state workforce agency with specific WOTC questions.

business’s social media channels to attract veteran candidates. Consider starting a mentoring program. Such an initiative can offer mili-

tary veterans information about the collision repair industry and the positions it typically has available. Ideally, a mentor can guide their mentee toward a shop with a need. Ryder has used this in the trucking industry and gained positive recognition for its efforts. Consider apprenticeship programs.

An apprenticeship program can help ease veterans into body shop life, and allow time for addressing a lack of jobspecific training, without the added pressure to quickly get up to speed in a full-time role. Ask probing questions during job interviews. Once you’ve tracked down vet-

eran job applicants, it’s important to ask questions that fully gauge their expertise. “Employers don’t necessarily know what questions to ask,” Huurman says, “to connect the dots between the training [and what] someone was responsible for while they were serving, and how that can translate into what we’re doing.” Huurman suggests asking veteran job applicants to explain what experience they have repairing large equipment; what leadership or management experience they have; and also to describe any certifications they have earned. A DUAL SOLUTION Ultimately, Huurman feels the powers-thatbe in industries like the collision repair field need to band together in an effort to end veteran unemployment. After all, he’s tired of hearing stories like those from Lawson, the Naval veteran and current estimator. “There’s still a bunch of people I served with—and it’s been over six years now— that are still struggling to find good, fulltime jobs,” Lawson says. Huurman feels the collision repair industry could be an ideal landing spot for veterans. “We have such a diverse set of opportunities for people,” Huurman says. “So there’s no reason why we shouldn’t be a preferred industry for folks that are coming out of the military.” May 2017 | fenderbender.com 47

S T R AT EGY

CASE STUDY

The Magic Touch FOCUSING ON TOUCH TIME TOOK KEVIN LOCKHARTâ&#x20AC;&#x2122;S SHOP FROM IN THE RED TO INSANELY PROFITABLE BY TR AVIS BE AN PHOTOGRAPHY BY DEVELOPING MEMORIES

48 fenderbender.com | May 2017

The Next Level Technicians now work on a team pay system at Lake Mac Auto Body, which has improved KPIs like touch time.

May 2017 | fenderbender.com 49

S T R AT EGY

CASE STUDY

For years, Kevin Lockhart steadily built his empire. His company, Prophet Systems Innovations, became a leading supplier of software and hardware for radio stations. He directed his team to handle rapid growth from less than $1 million in sales in 1997 to over $32 million by 2001, and his workforce grew from 11 people to 146 people in that time. It was a challenging market in which Lockhart’s company eventually became the worldwide leader. And, to him, none of that compares to running a collision repair shop. “Running a local body shop is harder than running a worldwide computer company,” Lockhart says with a laugh. “I absolutely got my head handed to me for the first few years. There’s a lot of complexity to a body shop I had no idea.” Back in 2010, when Lockhart purchased a foreclosed building with his daughter, Elise, in Ogallala, Neb., and turned it into Lake Mac Auto Body, the company’s slow start was evident from its low technician efficiency (it was just under 77 percent) and net profit (which was in the red). And the most telling number: Touch time sat at 2.3 hours. Perhaps the most underutilized and telling KPI in the industry, Lockhart says, touch time (the average number of hours per day a vehicle is touched by technicians) is a true indicator of productivity and profitability in the shop— the more hours worked on each vehicle each day, the higher the efficiency, the quicker vehicles can return to customers. Switching to a team system and focusing on fewer vehicles (as advised by his paint company) one year ago raised the shop’s average touch time to 6.5 hours. That, Lockhart says, brought up all those other numbers (efficiency is at 190 percent and net profit hit 22 percent in January) and has now set the shop up for growth.

PROBLEM/SOLUTION:

FINDING THE TEAM MINDSET

The Lake Mac staff looked much different just one year ago. “Before, we basically had five people doing what two should have been doing,” Lockhart says. As profits continued to hang around zero percent, that fact became increasingly obvious. The shop had a very “individualbased” culture, in which technicians were constantly guarding their assigned jobs. “They had their bowl of food, and they crouched over that, eyeing each other, saying, ‘Don’t touch my jobs,’” Lockhart recalls. “But to be efficient, you need teamwork, you need techs helping techs.” Lockhart lays it out with an example: Say two techs are assigned four vehicles apiece. Each of them, in theory, would split time between each vehicle, averaging two hours of touch time per day. But what if two technicians shared four cars? By focusing on moving less vehicles along more quickly, touch time would automatically double to 4 hours. When the vehicle finishes, you have charged the same amount of hours in less time, increasing 50 fenderbender.com | May 2017

both efficiency and profitability. When Lockhart realized this, he knew he needed to establish a team system and improve touch time. THE IMPLEMENTATION:

G E T T I N G O N T H E S A M E PA G E

Lockhart’s own ignorance regarding KPIs had transmitted directly to his team. The technicians did not understand why closely guarding their jobs was inherently causing low efficiency numbers. Lockhart started to preach important KPIs at his meetings—specifically touch time. “In the beginning, we would have staff meetings weekly where we would discuss the things affecting efficiency and touch time,” he says. “As I was doing that, it became clear who was listening and who was not.” Lockhart’s top technician is 65 years old and a prime example of a productive employee. He rarely brings his cell phone out, doesn’t goof around, and keeps conversations to a minimum. The same could not be said for Lockhart’s other technicians one year ago.

“It’s one of the harder things to get through to the younger guys,” Lockhart says. “It might just seem like two minutes to check a text, but when you disengage from what you’re working on, check your text, and then have to re-engage—if you’re doing that every time your phone dings, it affects touch time.”

THE INCENTIVE

On a salary pay system with no incentives, everyone besides Lockhart’s top technician was churning out dismal numbers, which ultimately kept the shop’s profits in the red. The behavior had caused the shop’s profits to reach a breaking point, so Lockhart placed strict requirements on hitting 120 percent efficiency. This weeded out three people, leaving two technicians (one split time between body and paint) who were motivated to hit benchmarks. Lockhart then incentivized working on jobs as a team, as opposed to individually.

Team System To reach the production levels he sought out for his shop required Kevin Lockhart to get every member of his staff working as a cohesive unit.

LAKE MAC AUTO BODY — LOCATION:

OGALLALA, NEB. STAFF:

6 SHOP SIZE:

18,000 SQUARE FEET AVERAGE MONTHLY CAR COUNT:

43 ANNUAL REVENUE:

Payroll changed from hourly to flat rate, and employees could earn an extra $100 on their paychecks for every hour of touch time they achieved. “It made a huge improvement in morale and efficiency,” Lockhart says. “They were making more money, and got used to the idea that if they helped each other increase touch time, they could keep making more and more.”

CONTINUOUS IMPROVEMENT

As his team got addicted to improving touch time, meetings turned into brainstorm sessions on improving KPIs. This involved studying layout and throughput, eliminating any waste or unnecessary movement. For body work, this meant investing in parts carts that kept tools nearby at all times. For paint, it meant upgrading to more durable equipment that allowed his painter to work consistently on each job.

On top of that, Lockhart found ways of motivating employees to keep touch time in mind during the smallest of moments. “If it’s five o’clock and you have 15 minutes left on a job, stay and finish, because 15 minutes will turn into an hour the next morning because you have to re-engage,” Lockhart says. “I started becoming more lenient: If they stayed an extra 15 minutes, I’d let them take time off during slow times.” THE RESULTS Touch time now averages at 6.5 hours per day (some weeks it hits an average of 7.5, Lockhart says), leading the way for 190 percent efficiency in body, 165 percent in paint, and a 22 percent net profit margin overall. With just two technicians, Lake Mac’s two techs have matched the annual revenue formerly achieved by five technicians. With the new pay plan and incentives in place, his top technician, during his best

$1.7 MILLION* *PROJECTION FOR 2017

weeks, turns in 95 hours of work without overtime. His two techs once managed to churn out $130,000 of work in a single month. In February, Lockhart added a third, full-time painter to the team. “We have individual weeks where body is running at 250 percent, and paint tops out at 175,” Lockhart says. With less employees, Lockhart felt more comfortable turning away “junk work,” raising the average ticket price from $1,300 to $3,130 in 2016. “When we were capacity limited during the last four months when we were down to just two senior techs, this made a huge difference,” he says. “We were still able to keep our sales level even with less capacity. “The techs love it too. They don’t have to work on junk anymore and they make a lot more money with less hours worked.” May 2017 | fenderbender.com 51

S T R AT EGY

TECH+TOOLS

Going Mobile

Utilizing your management system on smartphones and tablets can improve efficiency and communication BY TR AVIS BE AN

make a habit of browsing the Internet from his phone. He has no idea what games his grandchildren are playing on their tablets. But he is very proficient in one particular mobile app—a certain kind of app that he says every collision repair shop owner should download. “I’m 61 years old,” he says, laughing. “If I can do this, anyone can.” Oyer is referring to the app he and all his employees share, which allows them to use Aurora Collision Center Inc.’s management system from their cell phones. From writing estimates to documenting repairs to snapping photos to updating customers and insurance companies, it’s a practice Oyer claims has improved the Aurora, Colo., shop’s efficiency and overall communication significantly. Brandon Dodd’s business—Lloyd’s Body Shop in Gilmer, Texas—has experienced a similar transition ever since transferring portions of the repair process to the mobile platform. It’s a feature most major management systems offer, and it’s free to in52 fenderbender.com | May 2017

stall. Both owners claim the learning curve is low and the reward is high— all it requires is some training, a few process tweaks, and the motivation to take your management system to the next level. Getting Everyone on Board At first, Oyer was wary about his employees’ willingness to download the app on their personal cell phones. He brought up the idea at a meeting to gauge the reaction. “Nobody cared about putting the app on their phone,” says Oyer, whose employees have both Android and Apple phones. “The app is really easy to install. It only takes a couple minutes and they’re in business.” Oyer says that might not be the case for every shop, however, and that, if necessary, you could buy cheap, used smartphones for everyone to make it work. Dodd has his management system on tablets as well as smartphones. He purchased used Android tablets on Amazon (the app works for Apple products as well) for each of his employees.

After announcing the switch to mobile, Kim—Oyer’s wife and insurance consultant—worked with employees individually and gave a tutorial of the app and how and when to use it. Both Dodd’s and Oyer’s apps make it easy to include everyone in the process, they say. There are tagging features that task employees with respective duties, such as “paint” or “rental” or “vehicle complete.” Push notifications will alert users to updates, so everyone always knows the status of a vehicle. The Estimate When the vehicle first comes in, the estimator finds the repair order (which Oyer puts together beforehand from the desktop) on the mobile app, heads out and starts taking photos with his or her phone. Oyer says the photos can be downloaded as a group and attached to the repair order. Photos taken with the app are automatically labeled, saving time on each repair order. On Oyer’s app, tapping the placeholder on the right top of a photo will automatically label it “right front” and open a space for note taking.

THINKSTOCK

Phil Oyer doesn’t really text. He doesn’t

“We take photos all the way around. We get the stickers, the four corners, the odometer, prior damage,” he says. “And then we’ll come in and enter info from the phone and finish the estimate on the desktop, just because it would take too long on the phone.” Dodd’s estimator, however, does the entire estimate on a tablet. Switching to this system, he says, has kept the customer better engaged during the estimating process, increasing the capture rate. Dodd says it impresses the customer to update an estimate directly from the app while standing with the customer. The Repair Once the vehicle is in the shop, technicians can take closer looks at the photos on their phones. This allows them to look out for any prior damage, or missing or broken parts, from when it first came in. Oyer says this feature, in particular, has saved his technicians a lot of time and driven up efficiency and productivity. “You’re not walking up to the of-

fice to look at a picture like they used to. Every time you do that, you waste time,” he says. “They can just look at it on their phone and that’s that.” Techs will continue to document as the vehicle proceeds along, making notes and taking photos in the teardown, body work or paint departments. Oyer’s app will automatically prompt his technicians to document data from the odometer, license plate and fuel gauge whenever those items appear in a photo. Dodd’s management system allows his staff to track the vehicle’s movement on the app, so anyone logged in on their phones or tablets can see it at any point. And since the management system has a messaging feature, anyone can follow up on any photo or note that needs clarification. The Follow-Up While all this documentation improves communication within the shop by allowing everyone to access updated repair orders from their mobile devices, it also affords the chance to improve the customer experience, Dodd says. All the

contact information from the workfile is shown onscreen in the app, making it easy to update a customer about his or her car. The app will even display the preferred contact and contact method on-screen. “Every car that’s listed has a picture, so it helps you identify the car,” he says. “If I have the picture of a Toyota 2014 4Runner SR5 and it has the customer’s name, then you can open that up and look at it deeper. No matter where you’re standing, as long as you have your phone, you can let them know where the car is at in the repair process.” “We have ROs written in water pencils on the front and back windshields” Oyer says. “It’s always easy to see what that RO is and punch it in and look it up pretty quick. You can pull some information from it to answer a customer’s question right away.” It’s also made communication much smoother with insurance companies. To capture a VIN number, Dodd’s estimator can simply position the camera over the barcode on the VIN plate and the app decodes it and finds the insurance documents. May 2017 | fenderbender.com 53

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COLUMN

ON THE BUSINESS MIKE ANDERSON

Another (Different) Diagnostic Debate The right process and training is just as important as the right tool

MICHAEL HOEWELER

Since beginning this column

in January 2016, my goal has been to answer the most pressing questions I get from shop operators around the country. Sometimes, it seems I circle back to similar topics fairly often; that’s because I do, and I do it intentionally. Bottom line, my friends, there are some key issues in our industry that we need to get a handle on to be able to thrive in the years ahead. And these are the very same topics brought to me in my conversations with a lot of you. So, here we go for this month: OEM versus aftermarket scan tools. This obviously falls into the bucket of diagnostic scanning topics—and it’s a very crucial one to get out there. I hear it all the time, especially from folks that also run (or have worked in) mechanical shops: We use aftermarket scan tools, and they work just fine. And, you know what, that is likely very true. Unless you’re a dealership service center, the majority of mechanical work comes from out-of-warranty vehicles; i.e., older vehicles. The older the vehicle, the less complex its computer systems will be. And, if you’re not working on a vehicle that was in a collision, you don’t have to worry about a lot of advanced systems registering with problems. But we’re not talking about performing mechanical work here. By nature, all the vehicles in your shop have been in a collision, and let’s face it, you have the potential to work on the newest vehicles on the market. A brand-new car won’t need service for months—but it could get into a wreck just driving out of the parking lot of the dealer. And it’ll wind up at your shop. And you must be able to fix it properly. I’m guessing you can see where I’m going with my opinion on this issue. With the way the industry has progressed, it is essential to utilize OEM scan tools for all diagnostic scans in your business. There are two main reasons:

1. Access to build data. All OEM scan tools have access to the automaker’s “build data.” The tools use the VIN to access it, and then it deciphers based on that data. It has access to every feature and system, and what that particular vehicle does and does not have. If you don’t have build data, the scan tool is simply guessing on those features, which can lead to what we call “ghost codes” or false codes. To explain, let’s say I scan a vehicle that does not have a blind-spot monitor. The OEM tool will know that it doesn’t have it, so it doesn’t look for that feature. An aftermarket tool doesn’t know, so it will instead “look” for that system. It’ll fail, and because it can’t find it, it’ll offer a code saying the system has an issue—that’s your “ghost code.” 2. Finding small issues caused during the repair. Let’s say you removed a door handle

and side mirror on a vehicle to get it off to the paint department, but you drove the vehicle from one spot to another. The aftermarket tool is not going to pick up on that occurring. It simply can’t. The OEM tool will recognize it with a post-repair scan, and be able to tell you if anything needs to be reset simply from having the vehicle operate during that short period without the handle or mirror. Now, something to keep in mind: Simply purchasing a tool doesn’t mean

you automatically have all you need to properly diagnose a vehicle. You must have someone on staff that can both interpret the data that comes from the tool, and can troubleshoot issues that go far beyond a code. A dangerous myth out there is that you simply need tools to read and clear codes. That is simply not true. In order to get the most out of your investment in a scan tool, you need someone properly trained to use it, and you need a process in place that allows it to be used effectively within the repair cycle. Who performs the scan? When do they perform it? Who is responsible for delivering the findings to the shop team, to the insurance carriers, to the customer? Who determines when prerepair scans are needed, as opposed to just a post-repair scan? So, my friends, diagnostic scanning is a complex issue, and you need to find ways to make it work in your shop. Look at your work mix, and purchase the tools that make sense for your operation. Train your staff. Create an SOP. The reason this topic keeps coming up is because there isn’t enough being done yet—and many don’t know how to go about it. Make a plan. This needs to move from hot topic to a basic standard. Let’s get it done.

MIKE ANDERSON is the former owner of Wagonwork Collision Centers in Alexandria, Va., and 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

May 2017 | fenderbender.com 55

The Good Life Larry Bakerâ&#x20AC;&#x2122;s shops work under what he calls the Baker philosophy, a set of guidelines that promote a solid work-life balance.

56 fenderbender.com | May 2017

S H O P TA L K

LARRY BAKER

“I THINK THAT AFTER DOING IT FOR A LIFETIME, THERE ARE NO SECRETS.” LARRY BAKER OWNER BAKER COLLISION EXPRESS

PHOTOGRAPHY BY BRETT FLASHNICK

May 2017 | fenderbender.com 57

S H O P TA L K

LARRY BAKER

arry Baker is always looking for ways to work with his staff and improve processes. This comes not only from his desire to succeed as a shop owner, but also from his teaching and mentoring background. He’s not your typical shop owner, either. Apart from owning Baker Collision Express, a threeshop operation located in South Carolina, netting approximately $11.2 million annually, he serves as the executive facilitator for one of Axalta Coating Systems’ 20 Groups. And, he’s no stranger to FenderBender. Baker spoke at the 2016 FenderBender Management Conference, and other featured shop owners and industry leaders reference him as a shop management authority. With 40 years of industry experience and 15 years spent consulting, Baker is all in with his business, the industry and his staff. Inspired and adapted from The E-Myth by Michael Gerber, Baker tries to lead by a simple yet impactful code: Work on your business or work in your business. And as it’s played out, he’s actually been able to do both.

BAKER COLLISION EXPRESS — OWNER:

LARRY BAKER LOCATIONS AND SIZE:

(SHOP 1) IRMO, 22,000 SQUARE FEET (SHOP 2) LEXINGTON, 7,200 SQUARE FEET (SHOP 3) COLUMBIA, 11,000 SQUARE FEET STAFF:

60 TOTAL FOR ALL SHOPS AVERAGE MONTHLY CAR COUNT:

600 TOTAL FOR ALL SHOPS ANNUAL REVENUE FOR ALL THREE SHOPS:

$11.2 MILLION (ESTIMATED) A S T O L D T O K AT S A N D OVA L

I believe there are varying philosophies in leadership; I take it as my responsibility

to provide the opportunity to thrive and excel. I run my shop with the Baker philosophy in mind, it provides a look at how my staff can have a better life. The Baker philosophy is putting family first, pacing yourself, not burning yourself out, not working a second job at night. My technicians work in a shop that considers them family, a place that understands the need to balance home life and shop life. We don’t want our technicians to feel like this is just another job. This is a place that values their time, effort and commitment. And, we value them. With the Baker philosophy, you can have your life back. Our system allows people to have a much higher quality of life. It’s an evolution of thought. 58 fenderbender.com | May 2017

My staff is competent, aggressive and wonderful. They are aggressive because they want to thrive and excel. And my advice to any shop owner is: Pick whatever system you want to use to run your shop, tweak it and improve on it. Create a culture of continuous improvement. Before I step foot in a shop, I go online and check scorecards to see how shops performed the day before. I try to do all of my thinking away from the shops, where I can really spend time and concentrate without being interrupted. I spend approximately an hour and a half traveling between all three shops. I will travel from shop to shop so I can check in with staff and see how they are doing. I will check in with the managers and see if there are any challenges the I start my day around 8 a.m.

shop is facing. After that, I will go and meet with insurance company partners or with other strategic accounts the shops are working on. My shops use a methodology and

single-piece

flow

we don’t have any commission workers, which is different from what 90 percent of the industry does. Single-piece flow methodology is an assembly line methodology, where the car advances through various stations and certain processes happen in each phase. It’s somewhat of a replication of an actual vehicle assembly line that cars are manufactured on. The car comes into the shop disassembled and we create a blueprint on how it will be repaired, order the parts, and the car is staged. Once the parts come in, they are mirror matched

Role Model As his role in the business has evolved, Larry Baker (right) now spends the majority of his time acting as a coach and trainer to his staff.

doing it firsthand to be a great mentor and coach. Otherwise, people will try to convince you the job cannot be done or that your expectation is unreasonable. But, if you’ve got it and you know what is reasonable, then there is no way you can be convinced otherwise. Shops work from 7 a.m. to 4 p.m., but my day wraps up around 6. During that time,

and the car advances to the next phase. It never backs up. These are rudimentary processes and not being done well in most shops. It averages about one hour per car to go through that process. Some cars take longer, others less. I have two blueprinters that focus on that every day. Every day is different, I don’t have that much of a routine to where I have my

days mapped out. My role, aside from being an owner, would be coach, mentor, trainer and negotiator. If someone is sick, I will fill in for them. I tend to go where the hotspots are— the shop where there are the biggest challenges or problems and try to do training, mentoring and coaching where needed. The way that I know a shop needs some help is by their KPIs. They are so indicative that I know what the

shop needs and how to fix it. Recently, I’ve been providing training on singlepiece flow. One shop was struggling on their numbers. It was a great opportunity to get to train that manager on how to best deploy resources so that they could meet their goals. Training accounts for approximately five hours daily. But that changes, based on who I’m training. And, training can become pretty detailed, depending on the subject matter. I can get really involved in the minutia of topics, such as how to write an estimate, how to blueprint a car, or how to manage the production line. Knowing how to do whatever it is you are mentoring someone on is imperative because otherwise you do not have credibility, nor do you know with authority what is responsible to expect. You must have the experience of

I review how the day went, review what our challenges are and plan for what we need to change or do differently. I feel like my career has taken on three distinct and very different roles. You start off learning to be a very good technician and that takes six to eight years to be really good. Then, I made the transition to management where I learned to manage people, and teach them to be really good at repairing cars. And from there, I made the transition to leadership, which is mentoring and coaching other managers. I think that after doing it for a lifetime, there are no secrets. I feel like everybody is looking for a silver bullet, but there is no bullet. It’s all about rolling up your sleeves and doing the heavy lifting to advance your business. It’s doing 100 little things right that get the intended results people are looking for in that silver bullet. This is a hard industry and people need encouragement because it is difficult. It’s

not hard to provide encouragement. For tasks that are performed well, you can heap on the praise. And, for the record, I believe it’s not for the faint of heart and people should not expect it to be easy. To stay relevant, we’ve had to become more aggressive in marketing and the expectations of employees. That’s why I read constantly and I surround myself with some of the best and brightest people in the industry. May 2017 | fenderbender.com 59

2017

REAL-WORLD BUSINESS STRATEGIES When we put together session topics for the FenderBender Management Conference, we have one thing in mindâ&#x20AC;&#x201D;sharing business strategies that you can implement immediately to grow your shop. This is why we vet every session and choose specific, real-world shop operators and industry experts to lead them.

SEPTEMBER 27-29 THE WESTIN LOMBARD | CHICAGO, IL

“Since the FBMC, I have experienced less and less pushback from insurers and final bill payers on operations I thought were included, and in return this increased my overall gross profit margins on repairs. Attending the conference was the best damn decision I made.” —Amish Patel, General Manager, Midwest Auto Body of Lisle

See session details and register before prices increase June 8

FENDERBENDERCONFERENCE.COM

U P DAT E

COLONIAL AUTO BODY

INVESTING IN TECHNOLOGY

CO LO N I A L AU TO B O DY CO N TI N U E S TO B E A T R E N D S E T T E R B Y A D A P T I N G T O E V O LV I N G V E H I C L E TECH NOLOGY LIKE HYB RIDS AN D ELEC TRIC S B Y K E L LY B E AT O N

When FenderBender wrote about Colonial Auto Body in 2012 (fenderbender. com/modernniche), Donna Borges was embracing the technology required to repair hybrid vehicles. In 2017, the co-owner is still embracing new technology with open arms at her shop in Plaistow, N.H., and is still making sure her staff is properly trained when it comes to repairing vehicles like the Toyota Prius or Honda Insight, which account for roughly 15 percent of her shop’s work mix. Nowadays, though, Borges is also having her staff study up on electric vehicles, like the Chevy Volt. Her emphasis on extensive training is one reason why Colonial Auto Body—the only shop in southern New Hampshire to largely specialize in hybrids and EVs—has seen its annual revenue grow from $2 million to $3.2 million over the last five years. Borges provided FenderBender with her thoughts on the keys to being prepared to repair hybrids and EVs in 2017 and beyond.

PHOTOGRAPHY BY TRACY ANN KNOWLES

AVERAGE HYBRID REPAIRS INCREASING

In the span of just a few short years, Borges has seen her shop largely shift from repairing mid-size hybrids like the Prius to tackling more sizable vehicles in that segment, like Chevy Suburbans. And the price of such repairs continues to rise. Five years ago, Colonial Auto Body’s average hybrid repair job was $6,000; today, that number is around $15,000. And, while she appreciates how the cost of repairs have aided her shop’s growth, the shop operator is fairly alarmed at how some in the industry have been slow to adapt DONNA BORGES to hybrid technolCOLONIAL AUTO BODY ogy. In late 2016, PLAISTOW, N.H. for example, Co-

lonial Auto Body worked on a Subaru Legacy hybrid and found that a nearby dealership was unprepared to offer the necessary assistance. “That car was a nightmare to work on, because our local Subaru dealership didn’t have the computer technology to do the resets,” says Borges, who has had an ownership stake in Colonial Auto Body for 27 years. “It took weeks to fix the car. “The biggest tip I could give any repairer of hybrid vehicles is: Disassemble the damaged area completely, and inspect every component thoroughly. One small chip in a component, or crack in the underside of a part, can cause a huge and expensive error down the line.”

EMBRACING EVS, TRAINING

Electric vehicles are a breeze to fix in comparison to hybrids, Borges notes. And her growing appreciation for the EV segment comes at an ideal time, con-

sidering their adoption rate in her home state. According to a December 2016 report by ChargePoint, which operates electric vehicle chargers in the U.S., New Hampshire ranked sixth among U.S. states in EV growth (the top six states in terms of EVs in operation: California, Georgia, Washington, Florida, Texas, and New York). The report also notes that, in the U.S. alone, 542,000 EVs had been sold through November 2016—a number that’s seven times the amount of EVs that were sold in the U.S. in 2012. So, while EVs still only represent 1.1 percent of U.S. car sales, the segment is growing. And Borges is taking every step to have her staff prepared to take on EV repairs. When the Chevy Volt rolled out, Borges had her staff take part in training—which was offered free of charge— at a nearby dealership. She has also taken advantage of the hands-on training that I-CAR offers, which she gladly pays for her staff to attend. “It’s always important to keep your bodymen trained on the latest technology—and keeping your office staff trained, too,” says Borges, who budgets $3,000 per year for employee training. “I mean, you need to know what these things are when you’re writing an estimate. “I feel that we get a tenfold return on our training dollars. When a new model vehicle comes through our door, my techs are prepared to repair it. “You can’t stay ahead of the curve if you are ignorant of the market.” May 2017 | fenderbender.com 63

COLUMNS

IN THE TRENCHES STEVE MORRIS

A Walk Down Memory Lane This is my first column for FenderBender

but I have been associated with this publication for close to two years as a member of the advisory board. I consider this magazine to be the Wall Street Journal of the collision repair industry with thoughtful and relevant content produced by a highly motivated and engaged group of reporters and editors. I’m happy to be a part of the team and look forward to sharing some of my thoughts, observations and solutions with you in upcoming columns. I’m proud to be part of the collision repair industry. During my career, I’ve been fortunate to be a leader, mentor and coach to over 500 team members in the shops where I have served as director of operations. I’ve also been lucky to be associated with some of the finest men and women in the country who work so hard to be successful as owners and operators in a business that generates very slim margins and requires significant capital investment in equipment, infrastructure and technical training. Our business is evolving at a rapid pace and this rate of change will increase exponentially in the very near term. I’ve been thinking about all the changes that 64 fenderbender.com | May 2017

have occurred in the last two or three decades and how resilient you, the body shop owners and operators, have been to rise to every challenge. It wasn’t very long ago that we painted cars with single-stage acrylic enamel that we bought as a factory pack from a jobber, or we’d give the jobber a fuel door from the car so that the jobber’s paint match guru could match the paint for us. Now we mix our own paint using computerized scales referencing formulas generated from photo spectrometers and apply it in up to four stages. You’ve adapted to that change. Many of you recall that it was common to weld replacement panels using open flame gas torches, and coat hangers or brazing rods. Now we may attach panels using high amperage spot welders that generate 1,000 pounds of clamping force in the weld zone. You’ve adapted to that change. Do you remember the Chevy Citation or the Chrysler “K-car” when they first started showing up in your shop? Many of us worked hard to understand these vehicle design changes and the strange ways the vehicles reacted in an accident. We are now dealing with an

alphabet soup of construction materials that include HSS, UHSS, SMC, PVC, as well as aluminum, magnesium, and carbon fiber. You’ve adapted to these changes. Very few businesses operate in an environment where the customer pays for only a small portion of the cost. We’ve witnessed the advent and evolution of the DRP model in all its various forms, and the accompanying balancing act that repairers perform to achieve certain KPIs while still repairing vehicles to OEM standards. We are saddled with the inefficiencies associated with being directed to use certain types of non-OEM parts from specific vendors using one of several electronic parts procurement platforms. Salvage yards are now selling parts with newly created titles (opt-OE) and several independent companies have entered the parts space, moving these parts outside of the normal dealer supply chain. You

THINKSTOCK

Looking back on decades of change in the industry

NICK SPAETH

are adapting to these changes. Like a surfer dropping in on the Banzai Pipeline, we are riding a massive wave of technological advancements in vehicle systems that will crush us if we don’t master the techniques and processes for safely repairing and restoring these systems. More on this will be discussed in future columns but for now, many of you are adapting to this change. I’ve only touched on some of the challenges we’ve dealt with in the recent past, but these few examples remind me of just how good we really are. Many of you have created a positive, values-based, employee-centric culture within your organization and have fostered a system of continuous improvement. One of the things that makes me most proud of this industry is the fact that despite all the adversity that comes with this business, I see so many owners and operators giving their time and resources generously to their communities. For example, how

many single moms, veterans and struggling families are now the proud owners of a great vehicle that was lovingly restored and then donated to them by a body shop? The original idea for this benevolence program was created by body shop owners many years ago and it has blossomed into something of which we

can all be proud. What are our current challenges and what can we expect to face in the future? I’ll talk about that in upcoming columns and I’ll share my insights and possible solutions to these challenges. We will continue to adapt and prosper. See you next month.

S T E V E M O R R I S is the director of operations for Pride Collision Centers, a seven-location MSO located in Southern California. He is an Accredited Automotive Manager (AAM) and ASE-certified master technician.

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

May 2017 | fenderbender.com 65

Share your thoughts at

I N N OVAT I O N S

submissions@fenderbender.com

A SHOP FL OOR PRODUC T ION BOA RD

Upping Organization Body Builders Automotive utilizes a production board to speed up paint booth efficiency.

A PRO DU C TIO N BOAR D APPLI ED TO T H E S I D E O F A PA I N T B O OT H H A S N O T I C E A B LY A I D E D E F F I C I E N C Y AT B O D Y B U I L D E R S A U T O M O T I V E I N C . B Y K E L LY B E AT O N

BODY BUILDERS AUTOMOTIVE INC. LOCATION:

ROLLING MEADOWS, ILL. INNOVATOR

MATT ROBERTSON SIZE:

10,000 SQUARE FEET STAFF:

AVERAGE MONTHLY CAR COUNT:

125

ANNUAL REVENUE:

$3.1 MILLION

A shop floor “production board,” or workflow board, applied to the side of a paint booth.

The Inspiration —

Back in 2009, Matt Robertson—a technician at Body Builders Automotive Inc. (BBA) in suburban Chicago—grew tired of being forced to scour the shop in search of vehicle keys. The process simply didn’t seem efficient. “There was no visual control anywhere,” BBA general manager Joe Phillippi says. Shop workers “couldn’t find where one car was at in a certain department without going into a management system.” And the staff at BBA thought there had to be a quicker process for locating vehicles—one that could provide a decent amount of information in one quick glance.

66 fenderbender.com | May 2017

What It Does —

The production board is centralized on BBA’s shop floor, and is broken up by department. It allows the staff to quickly recognize bottlenecks, and lays out the repair process from beginning to end, from assembly to wash. Here’s how that process works: A photo of the damaged area of each vehicle at the facility is posted on the production board by one of BBA’s porters. That photo notifies shop workers that a vehicle is ready for disassembly. Behind every photo, a piece of paper is later attached that notes the scheduled teardown technician, body technician, and how many paint hours are allotted for the job. Additional notes include the vehicle’s date in, date due to paint, and the job’s overall due date. The crew at BBA also applies stickers to the photos of cars that are designated as less-than-two-day jobs, which helps everyone prioritize tasks. “It’s one spot for the technician to go for all the keys in the shop,” Phillippi says. “So, if they know the car is in paint, the photo should be hanging in ‘paint’ and the keys will be hanging on the photo.”

How It's Made —

Phillippi says the staff in Rolling Meadows simply applied painters’ tape to the side of a paint booth. The entire board is roughly 20 feet long, and around 3 feet high. The board also easily utilizes dry erase markers.

The Cost —

The production board cost Phillippi’s staff next to nothing, considering they simply used materials that were already around the shop.

The ROI —

Phillippi says the production board has saved BBA immeasurable amounts of time, and has helped shop efficiency. The general manager confidently estimates that the board has improved cycle time within his shop. He says the board helps BBA track elements like its one-day repair jobs clearly and concisely. “It has just eliminated a lot of waste for technicians,” Phillippi says. “They’re not walking around looking for keys. They’re not wondering where a bottleneck may be. They’re not wondering where the car is in production. All the information is up there. “I can’t imagine how much time it has saved us in the end.”

COURTESY BODY BUILDERS AUTOMOTIVE INC.

What It Is —

INSIDE 1COLLISION NETWORK’S

STRATEGIC GROWTH PAGE 82

IMPROVE TRANSPARENCY

WITH CLEAR COMMUNICATION PAGE 94

THE FUTURE OF

INDUSTRY CONSOLIDATION PAGE 78

Community Leader How Joe Amodei helped his repair network became the bedrock of its community

COMMUNAL LIVING Joe Amodei’s The Collision Centers has restored and donated dozens of vehicles through Recycled Rides

PAGE 86

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THE MSO PROJECT

TRENDS & ANALYSIS

Consolidation’s New Trend As MSO acquisition greatly slowed in 2016, Vincent Romans sees an industry ‘unfolding as it should’ B Y B R Y C E E VA N S

THE MSO PROJECT

Why has consolidation appeared to slow in the last couple years?

There are a number of reasons that this slowdown is happening, and let’s go back to 2012, when large private equity firms played a huge role in consolidating the industry. It was understood by them that this dry powder they had would be leveraged to aggressively grow through acquisitions and they did just that. But during the last five years, the

MIKE WHEALAN

Despite what headlines may indicate, the rate of consolidation in the collision repair industry hasn’t been a linear rise toward domination for the Big 4 consolidators—Service King, Caliber, ABRA and The Boyd Group. Instead, think of it more like a bell curve, Vincent Romans says. Romans’ industry consulting and analyst firm The Romans Group recently released its data-driven report, ”Profile of the Evolving North American Collision Repair Marketplace.“ There were attentiongrabbing highlights (such as the forecast for the Big 4 to gain a 20 percent total industry market share by 2020) but the overall message was far more tame: After peaking two years ago, the rate of consolidation has slowed. The numbers: In 2012, roughly $300 million worth of multiple-shop operations (MSOs) was acquired; that rose to nearly $1 billion in 2014, before falling back to just under $250 million in 2016. Consolidation is still very much the reality for the collision repair industry, Romans says, but it’s far more nuanced than many seem to think.

cost to acquire these targeted, MSO platforms, steadily rose due to the aggressive competition among the Big 4 consolidators as well as the owneroperators’ increasing value perception and price expectations for selling their businesses. It was just getting too costly for the MSO consolidators to spend the money that the sellers wanted. And that value shift is simply a supply-anddemand issue, correct?

Some of it definitely is. There was a lot of cash/dry powder available and financing was inexpensive. Consolidators were aggressively purchasing multiple-location platforms, and we had this shift in owner perception about the increasing value of a business and the price expectation for selling. A lot of this was due to the MSOs’ market-entry strategy many in which they targeted other MSO platforms. The larger consolidators did this to gain entry and large market share in target areas, and as they formed their competitive beachheads, it took out most of the early sellers that had the largest platforms.

Once all those acquisitions were made, they had to be integrated by the four consolidators. Those platforms and individual markets across their networks needed to standardize as much as possible. They’ve done a fairly good job of that, but it takes time. Now that those acquisitions are somewhat developed, there are very few large multiple location operators left that would be as desirable at a reasonable price for acquisition. That means that the buyers—our four large consolidators—are now actively building out those target markets with what they call “tuck-in” or cluster locations with single-location acquisitions, brownfields or green fields.

“I wouldn't say that's mass consolidation. I'd say the universe is unfolding as it should." –Vincent Romans, The Romans Group

All of this has really led to this gap between the seller’s value and sales price expectations and the buyer’s expectations, which has shifted the real and perceived value of an acquisition. That said, your report forecasts the Big 4 doubling their competitive stake by 2020, reaching a 20 percent market share? It’s a significant number, but does it signal “mass consolidation” for collision repair?

The future is clear that the top four MSO consolidators today will grow their businesses at a faster rate than those in the other segments of the industry. After the Big 4, those repair organizations in the $20 million-per-year or higher segment will have the second fastest growth rate; then the $10 million to $19 million, and so on.

The combined sales at the end of 2015 was about $3.7 billion for the

top four consolidators, which is nearly an 11 percent market share. By 2020, I believe they’ll have between $6.5 billion, which would be about 16.3 percent share, up to $8 billion, which would be a 20 percent share. So, to answer the question: It depends on how you view mass consolidation. That’s still 20 percent of what I estimate to be a $40 billion market at that time in 2020. Is that mass consolidation? I don’t think so. Now, when you bring in the franchise networks and the $10 millionand-up single- and multiple-location platforms, those segments combined with the Big 4, we see one forecast shows them at about $15.6 billion, or 39 percent of the market. You look at it the other way, that’s still a strong 60 percent market share for all other repairers. So, I wouldn’t say that’s mass consolidation. I’d say the universe is unfolding as it should, more than mass consolidation, and that the concentration of collision repair revenue will continue to shift to these consolidating segments I mentioned. The industry as we know it today, will look a lot different when those combined segments reach 50 percent market share. I think critical market share happens when those combined segments have 55 percent of the industry, and I'm not prepared at this time to say when that will happen. There’s no need for mass panic. There is an opportunity for smaller shops and smaller MSOs. In order to remain relevant and achieve optimal success, these repairers should consider progressively planning and plotting strategically how they can build and maintain a competitive market position. THE MSO PROJECT

TRENDS & ANALYSIS

Two Years In: Service King’s Apprenticeship Development Program Service King’s vice president of talent development shares how the program has changed in the past two years and where it’s headed in the future

Tyra Bremer

BY TESS COLLINS

When you first started planning the Apprenticeship Development Program, what was the ultimate goal?

We want to achieve a few objectives. The first is to prepare body techs for a career in the industry. We’re developing competency within the industry and we’re also providing them curriculum that allows them to transition what they learn to real world situations, which will make them more productive. How are you working to update and improve the program?

We have an apprenticeship development manager who works closely with all of the supervisors and he makes weekly phone calls and does check-ins. He’s always gathering feedback. We also have a formal survey that we issue to all of our graduates in case they want to give anonymous feedback. How has the program grown in its first two years?

When we launched in 2015, we had 15 locations. In 2016 we added nine more and as of February, we now have 32 locations. We currently have 43 graduates within the workforce and in 2016 we started an additional 84 apprentices. We’re anticipating about 127–130 to be in the workforce by the end of 2017. 80

THE MSO PROJECT

What was the investment that Service King had to make to develop something like this?

It’s huge. We provide paid training for the students for 12 months. When they join, they receive a toolbox valued at $6,000. Granted, they don’t automatically get to keep it, they have to be with Service King for two years before it’s officially theirs. We also provide tuition assistance and continuing education training credits with I-CAR. We make a tremendous investment. With such a huge investment, what are the benefits for Service King?

Our ultimate goal is that at the end of the program, our graduates will be able to operate as a standalone body tech requiring little or no guidance. In most programs, when someone graduates, they enter the industry and all they’re able to do is be a helper or a porter. Our students will be able to have their own stalls. Someone who has gone through the Apprenticeship Development Program will have a higher level of productivity than someone that came from a different path and will be able to contribute to the growth of our organization in a shorter amount of time. We invest a lot, but we also know that our graduates have loyalty to Service King because of that. We have helped them grow and they remember that.

For many smaller MSOs, an investment like this just isn’t realistic. What advice would you have for those shop owners that are looking to develop something like this?

It’s all about growing your own talent. For smaller organizations that might not have the funds, find the senior and master technicians and show them what it means to take someone under their wing rather than just having them be a helper. MSOs need to teach their newcomers how to stand on their own. New hires need to be given a goal and a timeline for becoming a standalone tech. For a tech that’s never mentored anyone before, what would you say the difference is between taking someone “under their wing” and making them a “helper?”

In order to build standalone employees, it’s important that the senior technician takes the apprentice through the full life cycle of a repair and explains each of the different levels. If someone is just doing bumpers, then he or she is just a helper. A helper is assigned smaller tasks. In order for them to be able to work on their own, they need to be involved in the entire process but also understand that it’s not something that will happen overnight. What are your goals for the program moving into 2018 and beyond?

Past 2018, we want 200–250 new apprentice technicians. Our goal is to add at least 200 to the workforce. There’s an aging population in the collision repair industry and as we add new talent, we’re contributing to our company. There’s a technician shortage. This is not just a Service King challenge, it’s an MSO challenge.

COURTESY TYRA BREMER

“In my 14-year career, this has been one of the most rewarding initiatives that I’ve been a part of,” says Tyra Bremer, vice president of talent development at Service King, when asked about the company’s Apprenticeship Development Program. Launched in 2015, the Apprenticeship Development Program is a yearlong program that aims to churn out body technicians that are able to stand alone and perform a repair up to Service King standards upon graduation. Bremer came to Service King three years ago, just as the concept for the Apprenticeship Development Program was being worked out. Bremer was put in charge of building the program. Since its launch in 2015, the Apprenticeship Development Program has doubled in size and now has a roster of 115 active apprentices at 23 different repair centers across the country—and Bremer says it’s only the beginning.

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SUPERIOR COLOR ACCURACY HIGH PRODUCTION THROUGHPUT COST-SAVING EFFICIENCIES

THE MSO PROJECT

TRENDS & ANALYSIS

Evaluating the Marketplace

Jim Keller, president of 1Collision Network, talks about the networkâ&#x20AC;&#x2122;s recent expansion into Minnesota and what to expect in the future BY TESS COLLINS

THE MSO PROJECT

How does 1Collision evaluate a specific marketplace?

Since our start in the Midwest, our strategy has been to identify both primary and secondary U.S. markets where the collision repair space is competitive. We also are looking to identify single-location independent or dealer repair businesses that are interested in continuing to successfully grow their business and earn more profit through the support we provide.

Our network entrance and growth

COURTESY JIM KELLER

On January 5, 1Collision Network announced its entrance into Minnesota with the addition of five locations in the Minneapolis-St. Paul marketplace. With the new locations, 1Collision now operates in seven states and represents three of four regions in the U.S. (West, South, and Midwest). Jim Keller, president of 1Collision Network, started the network based on a need he saw for an organization that could provide additional help to independent shops that were having a difficult time competing. Keller took inspiration from his background in the industry. He began his career sweeping floors at a collision repair shop, later managed a dealership collision center, and ran his own shops. He earned a business degree at Cardinal Stritch University, and served as the chairman of the Automotive Service Association (ASA). He put all of that experience into founding the 1Collision Network, and works to provide shop owners with the support that they need to succeed. And Keller has grown the network through a precise expansion model that he details here.

in various markets has come in different ways. Some of those that have affiliated with us were single- or multiplelocation independents or dealers who we’ve met through industry organizations and by attending NACE, SEMA, CIC, conferences, and association meetings. Some shops we have met were introduced to us through our strategic partners and insurer recommendations, and some have reached out to us after reading articles about our network in the trade press, and through existing locations referring their friends. The network brings value to shops in any market. It is really dependent on identifying the candidates to build a group in the market. The process starts when we identify shops that want to compete at a higher level, and determine through assessment if they are a fit for our model. States such as California, Minnesota, Illinois, Florida, and Texas have high vehicle registration counts and significant consolidation activity, which make them prime areas for us to enter, as are local markets like Dallas, Nashville, Atlanta, Denver and Phoenix. In most cases, we like to design the strategy for each market by leveraging strength in numbers, and the power of multiple well-performing locations. However, a single store in a smaller market can also gain a great deal of support with our program as well. Our entrance in each new state or local area will be based on identifying, qualifying, building relationships with, and signing shops that are leaders in their market. Once a shop joins, what are the next steps?

The first thing is that it has to be a mutual decision. The shop has to want to work with us, but we also have to want to work with the shop. Once we’ve decided that we

want to work together, we do a complete assessment of the company—that includes everything from business planning to performance and marketing. We find out what their goals and objectives are and then we write an in-depth business plan. It outlines the steps that they will need to take in order to meet their business objectives. The business plan outlines what 1Collision can provide support with and what shop owners can do by themselves. For example, Shop A might need a lot of help with marketing, and Shop B might be the exact opposite and need help with the performance side. Then, when those needs are met the focus might switch. If there’s a need that a shop has that we don’t directly have the resources for, we can reach out to one of our many partners. 1Collision recently entered the Minnesota marketplace and became the seventh state in which 1Collision Network operates. What is the significance of that?

First of all, all five of the shops that joined in Minnesota are all run by great operators. It’s a great group of shops that does a significant volume of business. When a shop joins our network, it’s usually someone that has more than one location. In this case, all five of the locations are individually owned. Another unique aspect to this announcement is the Minnesota marketplace itself. Minnesota is the home of ABRA and has significant market coverage, but other than other independently owned MSOs, there aren’t a whole lof of franchises or networks in Minnesota. Minnesota has 5 million registered vehicles in the state. Compare that to the state of Illinois. Illinois has 5.7 million registered vehicle owners, but Illinois has Chicago. Chicago is the second largest network for collision repair in the United States and has CARSTAR, Fix Auto, Gerber,

Service King and ABRA. These two states have very similar car counts, but Minnesota is unique in terms of its lack of organized franchises. Most big metros have multiple operators of the Big 4 and most of the major markets have a couple of different franchises and or network operators. There are a lot of great independent shops in the Twin Cities. If you look at a map that shows where all of our locations are, five of the states that we’re located in are in the Midwest (Illinois, Indiana, Iowa, Minnesota, Wisconsin), the Midwest is our root, so expanding in Minnesota is a way to establish our network. You mentioned that the Minnesota marketplace is unique. What are the unique aspects of Minnesota and other marketplaces that 1Collision takes into consideration?

The competitive environment of the market is one of the most powerful dynamics. For example, Minneapolis/St. Paul have many really good shops, a number of quality MSOs, a few locations of a paint franchise, but only one of the Big Four consolidators. California is unique in that they have two of the Big Four consolidators, a number of quality MSOs, and all three collision franchise groups—including 1Collision Network.

We have found that while some areas of the country are similar in nature to others, some markets also have dynamics that make that market unique. Examples such as a high concentration of quality dealer operated shops, where because they sell the car to consumer the dealer has a more captive customer by nature. In other markets, where I-CAR and trade associations have a strong presence, the shops tend to be more educated and operate at a higher level of performance. We have also found markets THE MSO PROJECT

THE MSO PROJECT

where only a handful of shops are working in partnership with insurers, allowing those that do to thrive. And of course, in a market where MSOs have a strong market share, the bar is raised to win the insurer and consumer business. Many shops are contacting us to find out how they can have the competitive solutions as part of a group. Marketing strengths, SOPs and operational support, strong strategic purchasing agreements, talent acquisition, and others can be differentiators. As the collision industry becomes more corporate, having access to a corporate level of support for many independents is becoming more critical. Is there a difference in how you go about signing shops in different marketplaces, such as California and Minnesota?

California, Michigan, Louisiana, and Minnesota are new markets for us. In all four cases, the shops that signed with us were willing to be leaders and be the first in their state to sign and help the Network grow. Our entrance into each new state will be based on building a strong relationship with and signing shops that are leaders in their market, which aids in stimulating growth in that market. The process for signing a shop is unique with each owner—it’s really all about the relationship we build with the owner and/ or management team. We have signed a shop on board in as little as three meetings within a month, or it can take six meetings or more per year to sign them. Shops affiliate with networks for various reasons. Sometimes, events like a large MSO knocking on the door or entering the market, or other larger single location competitors growing their market share can generate a fear factor. Since 84

THE MSO PROJECT

“We're not jumping all over the place. We're making moves in marketplaces that it makes sense for us to go." –Jim Keller, president, 1Collision Network

we operate in an occurrence driven industry, revenue increases come primarily by winning market share from the other shops. A shop must increase their visibility in order to grow. To increase visibility and grow, a shop must improve performance and marketing, better connect with their community, build better insurer relationships, have opportunities to procure parts and materials more costeffectively, have a source for training solutions, and be able to acquire the talent needed to support that growth. Planning, implementing, and managing these areas necessary for the growth of a collision repair business require expertise and skill. In many cases, it also requires utilizing outside professional support. What can we expect from 1Collision moving forward?

Our expectations are to grow on a regular basis. We’re looking at markets that make sense for us to have an affiliation with. We’re also looking at areas that insurers might like to see developed. We have a few shops in rural areas that

might be two hours from the nearest adjuster or appraiser. If we can find shops that insurers feel comfortable working with in these rural areas, that saves a lot of travel time. We’re looking at different areas, like California for instance. Los Angeles is the largest market for car crashes. That’s a move that makes sense for us. We’re also looking at San Diego, San Francisco and Phoenix. We also are looking forward to building our presence in Louisiana—growing in the South from Texas down to Florida. Between our locations in California and Minnesota, there’s Nebraska and Colorado. We’re not jumping all over the place. We’re making moves in marketplaces that it makes sense for us to go. We want to grow steadily and deliberately. Ohio and Indiana fit into our geographical region, as do Missouri, Tennessee, and Oklahoma. Those are just natural areas for us to get into. We’re also looking at Georgia, Florida, and Texas because there are a lot of registered vehicles there. There’s a lot of consolidation. With that many vehicles, there’s going to be a need for body shops. What are 1Collision’s goals for the future?

I’m not sure if it’s about the number of states we’re in as much as it is about growing and building our group of shops in a way that makes sense. Our target is to be at 150 locations within 4 years. Right now, we’re 20 percent there. We’re all about building groups. If you divide the country into four regions, we already have a presence in three of them. The East, an area that we’re currently not in, is something that makes sense for us as well. We’re going to continue to work with shops and make sure that it's the right fit for both of us.

If it isn’t CAPA Certified, it isn’t a genuine replacement part. capacertified.org THE MSO PROJECT

THE MSO PROJECT

RICHARD STORM

Out in Front Joe Amodei wants his shops to have a true presence in their respective communities, and he works to set the example.

CASE STUDY

STEPS TO A SUCCESSFUL VEHICLE GIVEAWAY The Collision Centers founder and owner Joe Amodei shares what heâ&#x20AC;&#x2122;s learned over the years participating in Recycled Rides BY TESS COLLINS

THE MSO PROJECT

When Amodei started with the program, he had two shops that employed about 20 people. Now, years later, he’s more than doubled in locations and has over 60 people on his staff. Since the start, his staff has been on board 100 percent, which he credits to the program. “They’re giving back by doing something that they’re already good at,” Amodei says. “Once I explained what the program was, it was almost like they couldn’t wait to get started.” Amodei said he didn’t get into the program for any type of recognition, he simply wanted to give back. However, the events do bring exposure to the shop and promote a positive image for the collision repair industry. Over the years, Amodei has picked up a few tips for executing a successful vehicle donation event. DETERMINE THE SCALE OF THE GIVEAWAY

When you own more than one shop, there are a number of different approaches that you can take when putting on an event like a vehicle giveaway. Amodei has conducted 88

THE MSO PROJECT

Recycled Rides giveaways both at just a single location and en masse at all of his locations simultaneously. He’s also held larger events where he’s partnered with other businesses, including other collision repair shops.

“Every year is different,” Amodei says. “In 2015 I did one at my brand-new location. It was sort of like an introduction to our shop.” Amodei explains that the scale of the giveaway for Recycled Rides is determined by the amount of vehicles that are available for donation. The Collision Centers once participated in a 10-car giveaway, but worked with other shops in the area to throw it. Amodei says that larger giveaways, like ones that Progressive throws, are not viable for smaller, regional MSOs like his own without outside help, but can be extremely effective for larger MSOs. Amodei says it’s important to evaluate each circumstance and determine the best people to get involved and the appropriate scale of the event. DESIGNATE A COORDINATOR

When multiple locations are involved, Amodei says that his experience has taught him that having one person designated to coordinate the event is the best route to take.

“I have one person who handles the Recycled Rides and that person communicates with each locations,” Amodei says. “You have to have on person who is dedicated to it. Three different people working out of

COURTESY JOE AMODEI

Joe Amodei is the founder and president of The Collision Centers, a five-facility MSO in New York. Amodei and his shops have been involved in Recycled Rides since 2008. The reason? Amodei is quick with his response: “Think about it, it’s easy to open your wallet and donate money, but at the end of the day, why not do something to help that has something to do with the industry?”

to work on the vehicles. Amodei says that his technicians usually work on the vehicles during their own time and are happy to do so. DESIGNATE WORK

Lending a Hand The Collision Centers does multiple vehicle giveaways throughout the year, and owner Joe Amodei, far left, feels it's an important part of his company's culture.

a different location won’t work.” Amodei has a person on staff that’s in charge of advertising and marketing that takes over all of the coordination and communication of the Recycled Rides events. He advises that other shop owners find a person that is able to take on this responsibility or hire someone for the job. That way, he explains, you don’t have multiple people trying to make a decision. SET UP A PROCESS

“Every year, we learn something new,” Amodei says.

Although he’s been doing these since 2008, Amodei just started using an SOP for Recycled Rides in the last two years, and he says it’s made all the difference. Amodei says that each time The Collision Centers team participates in one of these, they learn something and have figured out a way to make it better. All of that information has been collected and compiled into an SOP that is made available to each location. As soon as a vehicle donation has been set up, Amodei sends the SOP to the shop that is working on the vehicle in an email attachment. SPREAD THE WORD

Once the vehicle has been secured, Amodei spreads the word to his shops. His designated coordinator is responsible for relaying the information to each of the location’s shop owners. The shop owners then ask for volunteers at the shop

Amodei says that depending on the scale of the event, he’s designated the repair work a number of different ways. If it’s a one-vehicle giveaway, the work is usually kept at the shop location where the event will take place. Amodei adds that it’s often more effective having only one shop work on a vehicle because there’s less finger pointing and fewer opportunities for miscommunication. For larger giveaways where multiple shops are involved, Amodei says he’s found that it’s more effective to move the vehicle from one location to another rather than having technicians travel back and forth.

“Everyone works together, they all know what we’re trying to accomplish,” Amodei says. “Generally, the work will be primarily done at whatever location the vehicle is at. We usually don’t have techs go from one location to another. If we do have multiple locations work on it, we’ll transport the vehicle instead. It’s just easier that way.” COMMUNICATE THROUGHOUT

Amodei says that shop managers are notified whenever paperwork for a Recycled Ride is complete. If it’s a one-location giveaway, Amodei and the designated coordinator have in-person meetings and update the shop manager involved through emails. For larger giveaways, Amodei has all of the shop managers participate in the in-person meetings. CHOOSE A LOCATION FOR THE EVENT

Choosing the location for the vehicle giveaway is all about the type of event that you want to throw, Amodei says. First, consider the size of the event. If it’s more than one vehicle with multiple shops involved, Amodei says it’s good to pick a centralized location, such as the easiestto-get-to shop location or a partnering company that’s central for all of the participating locations. For one-vehicle donations, Amodei says to make it about the recipient. Pick a location that’s close to whoever will be receiving the vehicle. Many times, it works out that one of the shop locations in the MSO is a good fit. CELEBRATE TOGETHER

Once all of the work is done, Amodei says The Collision Centers spread word of the giveaway on its social media outlets in addition to sending out press releases. Amodei says he’ll send press releases out to any radio or news outlets that are in the area. Depending on the type of giveaway, Amodei says he’s had anywhere between 20 to 80 people show up to these events.

“We’ve always had great success in having people come out and attend and spread the word,” Amodei says. “We want people to see everyone coming together for a great cause.” THE MSO PROJECT

BUSINESS BUILDING

How to Implement a Process-Centered Environment A general manager for a California MSO shares tips he’s picked up for making process-centered environments work at his shops BY TESS COLLINS

For over 10 years, Pride Collision has used process-centered environments (PCE) in its shops. PCEs encourage the same processes every single time; think of an assembly line or the way fast food is replicated all across the world. Shops that use PCEs use standard operating procedures (SOPs) and quality-control checks at every step of the repair process to ensure efficiency. “[PCEs] help produce higher quality repairs, reduce waste, and allow managers and owners to easily analyze what’s going on in his or her shop,” Batenhorst says. Each of Pride Collision’s seven steps in its repair process has an SOP associated with it. Before the vehicle can move to the next step of the repair process, it must meet the standard and be accepted into the next step. Batenhorst warns that the transition to using PCEs is not 90

THE MSO PROJECT

easy, and it’s not for everyone, but with the right amount of dedication and willingness to learn, it pays off in the end. Batenhorst shares the keys to implementing successful PCEs. SUPPORT TEAM

Shops that are interested in implementing a PCE don’t need to go at it on their own, Batenhorst says. Pride has a PCE consultant through its paint company, AkzoNobel, that provides support and helped them make the change over. Batenhorst says that AkzoNobel is not the only company that provides this and that interested parties should reach out to their vendors. THE RIGHT TEAM

Although Batenhorst wasn’t there when Pride first made the switch, he knows there was a period where the shop went through growing pains and a number of people either left or had to be let go.

“This type of work environment is not for everyone,” Batenhorst says. “That’s why we make sure that we do a thorough job of interviewing to make sure we’ve found the right person.” Batenhorst says that the right person to work in a PCE has an open mind and a willingness to learn. Anyone that thinks

THINKSTOCK

After four years as an insurance adjuster, Andrew Batenhorst made the decision to switch to a career in collision repair, taking a job at Pride Collision Centers, a seven-location MSO in California. What inspired him to make the switch? Batenhorst said that after visiting hundreds of repair shops as an adjustor and seeing how inefficiently they ran, he said the way that Pride Collision ran its body shops was eye-opening. After working as a blueprinter at Pride, Batenhorst now serves as general manager for two of the locations.

that he or she knows everything already will not work out in a PCE. In order to screen its candidates, Pride Collison makes sure to ask the right questions and also teams up with a third party that administers personality assessments. ONBOARDING

Whether you’ve just hired a new member of the team or you’re switching your entire staff over to a PCE, Batenhorst says it’s important to take a handholding approach.

“You can’t expect someone from a traditionally run collision repair shop to adapt right away,” Batenhorst says. “It’s up to the manager and the team to onboard the new person and help them understand exactly what we’re doing.”

will it be done? What are you working on next?’ After that, I find out if each department feels like they’ll meet their goal. If not, I find out what the rest of the team can do to help.” Batenhorst explains that these meetings aren’t a way to micromanage. They’re meant to be a reminder that nobody is alone and that the team is there for support. Batenhorst also does daily walkthroughs to make sure all of the PCEs are running properly. He takes pictures throughout and brings those photos to the daily meetings. “If I see that the trash wasn’t taken out, I’ll take a picture of that and I’ll show it at the meeting,” Batenhorst says. “We then have a group discussion about why this wasn’t done. It makes it a team thing rather than an individual thing because these are all processes that have been established by the team.”

QUALITY CHECKS

In order for PCEs to work, SOPs need to be created—from check-in to detailing. Batenhorst says that all of Pride Collision’s SOPs have a time frame associated with each step that all of the members of the team know about and are expected to meet. Before the vehicle is taken into the next step, it’s up to the team at the upcoming stage to decide whether or not the team ahead of them has done its part of the repair to Pride Collision standards.

“It’s a seamless handoff to the next department,” Batenhorst says. “A quality control check is done, and if it meets the standard, it moves on. If not, the job will not be accepted into the next department until it does.” Batenhorst is in charge of the final sign-off of the vehicle before it is handed off to the customer.

PLAN OF ACTION

Once the problem has been identified, the team figures out a solution. For example, a delay that lasts longer than 10 minutes in any of the PCEs is documented in what Batenhorst calls the delay tracker. That delay and what department it is in is noted. At the end of the month, the delays are discussed and the team lead from each PCE is responsible for creating a plan of action to make sure it doesn’t happen again.

“We have to make sure that we’re not making the same mistakes over and over,” Batenhorst says. CONSTANT REMINDERS

All of the technicians at Pride Collision are tracked on their labor hours, Batenhorst explains. At Pride, every department set a goal for how many hours they need to produce in their respective PCEs. This is how the shop tracks how each department is doing. Batenhorst says that he gives daily feedback to his staff, so it should never come as a surprise how they’re performing.

It can be easy to slip back into old habits. At Pride Collision, Batenhorst says that the shop provides constant reminders of exactly how each repair should and is expected to be done. The shop hangs up all of its SOPs and provides visual aids, including process boards, throughout each step of the repair process. In addition to photos, Batenhorst says there are physical examples of what is expected. There are panels, pieces of steel and other various vehicle components throughout the shop that show both a poor example and an example of what is expected by Pride Collision.

CHECK-INS

LEAD BY EXAMPLE

Along with checking in on a daily basis, Batenhorst says that the entire staff has two 10-minute production meetings during the day to update everyone else on where each department is at with each job.

As Batenhorst mentioned in the beginning, the decision to make the switch to PCEs is challenging, but if it starts with you and with an open mind, it can make your shop a better place. Batenhorst says the leaders within MSOs need to keep an open mind and be willing to learn. Employees will see that and will hold themselves to that same level.

PRODUCTIVITY CHECKS

“I ask the entire staff, ‘What are you working on? When

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BUSINESS BUILDING

7 Keys to Giving Back How to make charitable giving a company initiative “This past October, someone came into one of our locations and took our Toys for Tots box and filled it to the top,” says Rich Tanchyk, assistant vice president of H&V Collision Centers. “If you’ve ever seen one of the boxes, you know how big they are! It was pretty incredible.” Since 2010, Tanchyk has played a major role in organizing the charitable contributions that H&V Collision, the seven-location MSO based out of New York, has participated in. Tanchyk spent nearly an hour on the phone with FenderBender passionately de92

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scribing the positive impact that each and every one of these events have had on him and the entire staff. To list a few, the company has donated 16 cars to veterans, volunteered and brought the Easter Bunny to the Boys & Girls Club, fixed up and donated a van for a local veteran home, and participates in Toys for Tots all year long. Tanchyk makes sure to get the point across that the world of giving is not only about donations: it’s about time and effort. For many shop owners, taking time to find an organization and get involved may seem overwhelming, but it’s easier than it might seem.

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BY TESS COLLINS

CHOOSE A LEVEL OF INVOLVEMENT

SELECT THE RECIPIENT

Depending on what organization you choose to get involved with, If you’re working with an organization like Recycled Rides or the the time commitment varies greatly. For shop owners looking to Make-A-Wish foundation, a recipient will have to be selected. get involved for the first time, Tanchyk sug“We don’t just go into an organization and gests an organization like Toys for Toys that say, ‘Give us a vet,’” Tanchyk explains. “We get up goes year round and does not require a huge close and personal.” time commitment. All businesses need to do is Meet the recipients. That way, it’s more go online and apply to be a drop-off site. Once personal when the actual giveaway takes place, approved, a box is placed in the shop and the Tanchyk says. only maintenance required is dropping the box “You're already in off once it’s full. PARTNER UP partnerships with In order to get financial support for these multiple people— CHOOSE AN ORGANIZATION events, it’s often necessary to get sponsors or When Tanchyk started in 2010, he knew he create partnerships. Tanchyk says it’s much vendors and wanted to give back, but he had no idea where to easier than it sounds. suppliers. If you're a start. He started researching local organizations “Think about it,” he says. “You’re already in good customer, ask in the area and reaching out to ones that appealed partnerships with multiple people—vendors and to him. Through research and word of mouth, he suppliers. If you’re a good customer, ask if they’re if they're willing to found the Catholic Charities of Albany. Tanchyk willing to help.” help.” can’t stress enough that he didn’t pick just any or–Rich Tanchyk, ganization. There was one piece of criteria that he INVOLVE STAFF assistant vice president, had: The organization needed to be focused on In order for the goodwill to spread, it’s imporH&V Collision Centers helping people. tant that the entire staff of a shop is involved Tanchyk says setting a benchmark of what in one way or another. Tanchyk says that even he was looking for has helped him narrow though it’s an added time commitment, the down the list of organizations that he’s interstaff at H&V Collision is always willing to help ested in working with. He suggests other shop because the company has always been sincere owners make a list of the qualities that they are about what it’s doing and has communicated looking for in the organization that they select. the broader goal to its staff. Tanchyk adds that a passionate leader goes a long way. BE GENUINE

One of the first vehicles that H&V Collision donated went to a single mother who had been a victim of domestic violence. When Tanchyk went into the home, he realized that he needed to prove himself to the organization. “It can seem strange for some people to have a stranger come in and offer to give you something,” Tanchyk says when describing this awakening experience. “It’s important to come off as genuine.” By meeting with the recipient, listening, and sharing why H&V was interested in doing this, Tanchyk was able to earn trust. The recipient of that vehicle is now in the last stages of becoming a resident nurse. Tanchyk’s advice is to show the organization that you are doing it for them, not to get something out of it.

SPREAD THE WORD

In order to raise money or donations, other people in the community need to know what’s going on. Whenever H&V Collision is involved in something, whether it’s a vehicle giveaway or Toys for Tots, Tanchyk reaches out. It’s important to get certain people there. Tanchyk advises inviting public organizations, the media, and reaching out to officials—like the mayor. H&V also utilizes Facebook to get the word out. For instance, when the Marines dropped off the Toys for Tots donation box, H&V snapped a photo of Tanchyk and one of the Marines and shared it on Facebook, letting its followers know where they could drop off toys. THE MSO PROJECT

BUSINESS BUILDING

Four Ways to Improve Shop Communication Relationships between the front and the back of the shop can be improved by implementing different strategies throughout the repair process According to Armando Arvizu, general manager of Service King in Tolleson, Ariz., the biggest problem for collision repairers is a lack of communication in the shop. Arvizu describes it as a snowball effect. If a customer relays something to the estimator and the estimator doesn’t communicate that effectively to the technician, there’s no way that the repair will be done according to the customer’s satisfaction.

Arvizu says that the reason communication is so difficult in this industry is because every repair is different. On a typical factory assembly line, people can get into a groove and create 94

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a standard set of rules. In the collision repair business, almost every situation is unique—which is why communication is so important. Service King is working to eliminate miscommunication by bringing technicians into the communication process. Currently, Service King is beta testing a mobile application that will allow the front office and technicians to communicate in real time. The app should be available sometime in the first half of 2017 but shop operators do not have to wait until then to improve communication. According to Arvizu, there are a

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couple of different strategies that every shop can implement to improve communication.

Arvizu says that his shop usually has between three and four check-ins per day.

DON’T BE AFRAID OF TECHNOLOGY

KEEP A HARD COPY

Arvizu encourages shops to use all avenues of technology. From texting to email, there are so many ways to increase communicate in the shop. Arvizu says that, at facility he manages, emails are constantly being sent back and forth, and his team makes it a rule that nothing can happen before there is communication. This is important not only to the shop in Tolleson, but the entire Service King organization. According to Derek Kramer, CIO of Service King, the company has had longstanding use of technology and is building on it by reaching the technicians.

Technology is great—but sometimes it fails. That’s why Arvizu says it’s important to have a separate process for communicating what’s going on with vehicle repairs beyond technology. The Tolleson shop uses quality assurance (QA) cards throughout the repair process. When a customer drops his or her car off, that car is automatically given a QA card that follows the vehicle through every stage of the repair process. The cards have room for all the information that anyone in the shop will need, including a spot for special customer requests and even a place to show where customers were sitting at the time of “With technology, the accident. Once the QA card is filled out, it begins moving with the vehicle. At every step one of the things of the repair process, a staff member needs to that we noticed sign off on the car, indicating that they’ve done was absent was everything that was needed. The card (and the vehicle) cannot move on before it has been inithe technician tiated.

“With technology, one of the things that we noticed was absent was the technician population,” Kramer says. “That’s over half of the population. That’s a missed opportunity.” With the app Service King is readying for launch, technicians will be able to send repair status updates and let the front office population. ... know when a vehicle is ready for its next That's a missed step. The app has email access, calendars, USE VISUAL CUES access to repair orders, the components of Arvizu says that visual cues are another great opportunity.” the repair, a way to take photos of the repair way to keep everyone in the shop on the same –Derek Kramer, CIO, and notifications. Through the app, technipage when it comes to a vehicle’s repair. An exService King cians also will be able to access methods of ample of a visual cue that Service King uses is instruction, view KPIs and see how their the way it sets up its parking. Arvizu explains shop compares to other shops. that his shop has defined parking for every step Arvizu says that one of the most inefof the vehicle repair process. Drop-off vehicles ficient points in a day is when a technician are left in the front before they move along. is not in a stall. If a technician is leaving his There are designated spots throughout the shop or her stall to track someone down to communicate something for the various steps of the repair process including teardown, about the repair, work is not being done. By using technolwaiting for parts, paint line, and awaiting reassembly. By using ogy, a tech can send a text to the front office without ever these designated spots, anyone can walk through the shop at any leaving the stall. Whether it’s sending a simple text message, time and see exactly where a vehicle is in the repair process. downloading an app, or using a visual cue, there are a number Using parking spots isn’t the only visual cue that a shop of different ways technicians can communicate with the front can use. Arvizu says that he’s seen a number of different office without ever having to leave his or her stall. methods utilized; it’s just important to find one that works for your own shop. Arvizu says he’s worked at shops that use INCREASE FACE-TO-FACE COMMUNICATION a color-coded chart where moving a vehicle to green means Using technology isn’t enough. Arvizu says that his shop has mulit’s “ready to go” to the next step of the repair process. A tiple production meetings per day. He says that the meetings do large chart in the front, a map where vehicles can be moved not have to last very long, but staying in constant communication to various stages in the repair process, or color-coded folders is a great way to make sure that everyone is on the same page. that depict a step in the process are other examples of visual cues that work. 96

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