Positioning Yourself in the
Collision Repair Industry
Presented by: Mike Anderson
April 2015
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.
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…
The Three Legged Stool
Sales &
Marketing
Finance & HR
Production
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…
The Future of Automotive
Collision Claims
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
Sales & Marketing…Virtual Steering
The Scenario:…….A consumer is in an accident…
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 %............
63 % will change vehicle brands when
they Sell or Trade in their Vehicle.
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”
Sales & Marketing…
Online Presence & Reviews
Sales & Marketing…The 3 C’s
CSI
Closing Ratio
Cycle Time
CSI
–
–
–
–
Kept Informed
Assignment Received to Estimate Upload
On Time Delivery
Vehicle Fixed right the first time
Closing Ratio
– Sales Scripts
– Sales Training
– Estimate follow Up
– Corporate Espionage
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
The Three Legged Stool
Sales & Marketing
Finance & HR
Production
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.
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 ….
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.
New Materials – Plastic
3-16
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 !!
Ultra-high-strength steel - Boron
3-13
New Materials - Aluminum

3-14
http://www.drivealuminum.org/
International Magnesium
The Three Legged Stool
Sales & Marketing
Production
Finance & HR
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.
Finance & HR
30 20 10 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…
What I see is ……
26-28 % Body, Frame, & Mechanical Labor
13-15% Paint Labor
7 – 9 % Paint Materials
40 – 42 % on Parts
The Rest Sublet.
Focus on ………………..
- Bringing Sublet in House
- Repair Versus Replace
- More Refinish Operations
- Paint Materials Invoicing
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!
Training Calendar
Additional Thoughts to Consider….
 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.
In Summary…..
For a Shop to THRIVE not just SURVIVE…
The Shop must Focus on ……..
Recent Visit with a Major Insurer
can
Speed
Accuracy
Service
Service
 Extraordinary Customer Service – Kept Informed
– Updating customers – phone updates, text updates, email
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
Speed
 LOR – Length of Rental 9 Days or less
Goal 2 days below Market Average
 Assignment Received to Estimate Upload - New KPI Heavily
Weighted.. ….
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
Top MSO-LOR Comparison
Accuracy
 On Time Delivery
 Minimal Supplements
 No Comebacks
It is a bright future in the
industry…Independent Shops can Succeed
and THRIVE not just SURVIVE!
Align yourself with WINNERS!
Questions & Answers
Thank you for your time
and attention!
Collision Advice Estimating Best Practices
For more information on Collision Advice Consulting Services
or speaking engagements, please contact:
Mike Anderson
mike@collisionadvice.com
Cell 301-535-3333
Tiffany Driggers
tiffany@collisionadvice.com
Cell 703-898-0715
Check out Mike’s New Consulting Calendar on our website!
www.collisionadvice.com