Positioning Yourself in the Collision Repair Industry. Presented by: Mike Anderson

Transcription

1 Positioning Yourself in the Collision Repair Industry Presented by: Mike Anderson April 2015

2 ANTITRUST / COMPETITION GUIDELINES In today s workshop, we will not discuss any issues that would violate antitrust guidelines. Surveys of prices, discounts and costs are permissible, but only under strict guidelines and only if they are not part of a conspiracy to fix prices or to otherwise restrain trade. Remember, the prices charges must be calculated and determined by the business owner alone. These prices should take into account the costs of doing business and include allowances for reasonable profit. All content of this program is based on standard economic and management principles. Profit margins, labor rates, etc., used in this presentation are to be taken as examples only. The intent of this workshop is to provide attendees with basic human resources management skills that will enable them to determine their own individual rates, profit percentages and other operation aspects of their businesses strictly on an individual basis, using generally accepted management principles.

3 In order for a Business to THRIVE not just SURVIVE They will need to focus on the Three Major Areas of a Business..The Three Legged Stool! Sales & Marketing Finance & HR Production Let s talk about what will impact Shops in each of those areas

4 The Three Legged Stool Sales & Marketing Production Finance & HR

5 Sales & Marketing Virtual Steering I recently attended a Conference where there were several OEMs present. They said that within two to three years vehicles would notify the OEM when a vehicle was in an accident as well as to if it were Non Drivable! The Scenario:.A consumer is in an accident

6 The Future of Automotive Collision Claims

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8 The OEM : Mr. Anderson, your vehicle has notified us you have been in an accident are you okay? The Consumer: yes, thank you very much, I was in an accident swerved to miss a deer. The OEM: Mr. Anderson would you like us to send an Ambulance or the Police? The consumer: No, I don't need an ambulance but I would like the police? The OEM: Mr. Anderson, your vehicle is telling us the air bag deployed and your radiator is busted, your vehicle is not drivable do you know of a towing service or would you like us to recommend one? The Consumer: No I don t if you can send one that would be great. The OEM: Mr. Anderson a tow truck is in route. Mr. Anderson, do you have a shop in mind? The Consumer: No I don't know of any The OEM: Mr. Anderson we have five certified shops within a 30 mile radius, is your dashboard display working? The Consumer: yes it is... working The OEM: We will send you the names of the certified shops in your area, as well as their online reviews. If you would like to choose one, we will ensure that your vehicle gets towed there. The consumer: I see the names now and I select ABC body shop The OEM: Mr. Anderson, we see you have ABC insurance on file is that correct and if so would you like us to notify them for you? The Consumer: Yes that would be great The OEM: Mr. Anderson is there anyone that you would like us to notify for you that you are okay or any appointments delayed? The Consumer: If you could call my wife that would be great... The OEM: Mr. Anderson do you need a rental car? The Consumer: yes I do, The OEM: Mr. Anderson we can have a rental car delivered to you in 20 minutes. I think by now you get the point... Stat to consider

9 Sales & Marketing Virtual Steering The Scenario:.A consumer is in an accident

10 WHY are the OEM s so interested in Body shops 60 % of all consumers who have to return their vehicle to a body shop for a problem will sell or trade their vehicle within one year Of that 60 % % will change vehicle brands when they Sell or Trade in their Vehicle.

11 Sales & Marketing Virtual Steering Virtual Steering thru the vehicle... think OnStar on Steroids Several OEM's said they already have that built into their vehicles but have to build their vehicle networks first... One of the major insurers was there, and laughed and said good luck building your network and managing the claims process.. A Major European OEM said, We have been doing it for 3 years in Europe... Some Major Insurers are already in talks with OEM's to be the " Certified Carrier for that OEM brand..." DRP's are NOT going away however, I do believe that we need to set our customers up to win and this OEM Trend needs to be clearly Considered

12 Sales & Marketing Online Presence & Reviews

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15 Sales & Marketing The 3 C s CSI Closing Ratio Cycle Time

16 CSI Kept Informed Assignment Received to Estimate Upload On Time Delivery Vehicle Fixed right the first time

17 Closing Ratio Sales Scripts Sales Training Estimate follow Up Corporate Espionage

18 Cycle Time Length of Rental Reporting Utilizing Enterprise ARMS Report Focus Needs to be 2 Days better than Market Avg. It s all about the DATA and being Pro Active Enterprise Forecast Report

19 The Three Legged Stool Sales & Marketing Production Finance & HR

20 Getting More Production Labor Gross Profit Shops will need to retain more GP to offset the cost of Training and OEM Certification Equipment Requirements 65-70% Labor GP will be required This will be accomplished thru bonus based pay plans, team systems, tiered approach, labor rate increases, etc.

21 Getting More Production Again LOR I can t re-emphasis this enough Cycle Time Is Key!!!!! Thru Put HPD More hands on Vehicle Estimate Quality - NOT included Operations Roll out Three Items EVERY Quarter.

22 Getting More Production Thru Repair vs. Replace Repair vs. Replace Opportunities Front and Rear Bumpers & Headlights Nitrogen Welders, Hot Staplers, etc. More training clinics needed specific roles in shops.

23 New Materials Plastic 3-16

24 Production Aluminum Help your shops make educated decisions What OEM certifications to strive for How many of a specific type of vehicle are in those Market Areas? Demographic Studies.. G MAPS.. At a Minimum Shops will need Repair Equipment for straightening Steel manufacturers are not going to sit around and lose market share Shops need to stay Educated in Real Time!! As a Jobber EDUCATE YOUR CUSTOMERS Be a CONDUIT of Information!!

25 Ultra-high-strength steel - Boron 3-13

26 New Materials - Aluminum

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28 International Magnesium

29 The Three Legged Stool Sales & Marketing Production Finance & HR

30 Finance & HR Data is and WILL remain Key! Shops need to be on Accrual Accounting NOT Cash Shops need to know how to manage cash flow and determine ROI on investments such as equipment Parts GP will decline or even disappear. - GM no list price will be of interest to watch. If this disappears or shrinks (i.e. price matching) then the GP will need to be made up thru labor GP capturing more not included operations.

31 Finance & HR Sales Mix 30% of Sales Body, Frame & Mechanical labor 20% of Sales should be Paint labor 10% of Sales should be Paint Materials 36-38% of Sales should be Parts 2-4% of Sales should be Sublet This Sales Mix will help to achieve maximum gross profit

32 What I see is % Body, Frame, & Mechanical Labor 13-15% Paint Labor 7 9 % Paint Materials % on Parts The Rest Sublet. Focus on.. - Bringing Sublet in House - Repair Versus Replace - More Refinish Operations - Paint Materials Invoicing

33 Finance & HR Shops will need to get people from ZERO to HERO in a shorter amount of time. Training matrix will be important After hours training clinics The jobber or equipment company will be needed GREATLY! Practice during practice and play during the GAME!

34 Training Calendar

35 Additional Thoughts to Consider.

36 Align yourself with people who can grow help them to find those acquisitions who is the next Service King, ABRA, Caliber, Gerber, the next.?? Pro Forma s Start Up Costs, etc. Think Like Real Estate Agents who help clients find foreclosures.

37 In Summary.. For a Shop to THRIVE not just SURVIVE The Shop must Focus on..

38 Recent Visit with a Major Insurer can Speed Service Accuracy

39 Service Extraordinary Customer Service Kept Informed Updating customers phone updates, text updates, updates 63% preferred text updates but that is demographic driven Using Technology to communicate Greeting the Customer Delivering the Vehicle How about After Hours Emergency Answering machine Good Nuff is not acceptable..!!! Uniforms, Office appearance IT is CRITICAL

40 Speed LOR Length of Rental 9 Days or less Goal 2 days below Market Average Assignment Received to Estimate Upload - New KPI Heavily Weighted...

41 Cycle Time LOR if you are NOT in the 7s or 8 s = You are loosing the game!! MSO s that have conference calls every single day to review their LOR report

42 Top MSO-LOR Comparison

43 Accuracy On Time Delivery Minimal Supplements No Comebacks

44 It is a bright future in the industry Independent Shops can Succeed and THRIVE not just SURVIVE! Align yourself with WINNERS!

45 Questions & Answers Thank you for your time and attention!

46 Collision Advice Estimating Best Practices For more information on Collision Advice Consulting Services or speaking engagements, please contact: Mike Anderson Cell Tiffany Driggers Cell Check out Mike s New Consulting Calendar on our website!