As an “old timer” in this industry, like many of us are, I started working for an independent body shop. That's all there was. Mom and Pop shops dotted the countryside, and that's how it seemed it would always be. I don't believe I had ever even heard the word consolidator. Time passed, as it does, and I found myself in the thick of the consolidation movement, even to the point of directing it to some degree.
For many years, I worked for large groups, helping them grow and expand. I learned a great deal about operating a successful business, and as a whole, the industry benefited from this movement and the infusion of knowledge and business acumen it brought.
Then I opened my own shop.
My feelings started to change as I began to try to grow my company. My many years of experience helped me overcome some of the daily obstacles that confront small shop owners, as the consolidators began to open more and more shops around us. But I could see that many of these once prospering shops were beginning to languish, and that was saddening. I have seen small shops, open for generations, dwindle to nothing, leaving their once proud owners wondering how to pay their bills and feed their families.
Let me be clear — I understand that sometimes evolution for good creates casualties. Shop owners who refused to change for the better suffered because of this. You have to be wiling to change and adapt in order to maintain your position. Today, the landscape is changing daily, with bigger companies gobbling up smaller MSOs one after the other, until it seems like no independents will be left when the dust settles.
Don't believe it. There will always be a place for well-run, professional shops in any environment. So how do you battle the approach of the consolidators?
There are several simple things that you can do to not only survive this onslaught, but thrive in it.
The quality difference
There is one simple answer to fighting back against consolidation: be better than consolidators are at everything. Do a better quality repair, treat your customers with more respect and run your shops with efficiency. I ran a lot of shops as a manager for MSOs. I worked really hard and did a good job. I can tell you this, however, as the owner, with skin in the game, I work even harder than I did as a manager. Remember that as the consolidators grow, they have to staff their facilities. One area that is very difficult for them is to make sure the proper people are hired in the proper positions. Often, people who aren't really a good fit in management can occupy that position. This situation creates a weakness that helps independents, if they are properly managed to be better.
I have mentioned in several previous articles that you have to step back and look at your shop and see it as a prospective customer would. What sets your shop apart from the many that surround you? If the answer is nothing, then you are in trouble. When a prospective customer walks into your shop, how do they feel? Is the shop office neat, clean and efficient looking, or is it filthy, looking like an afterthought thrown together just to have a place to write estimates? Today's customers are pretty savvy and generally own a car that is more expensive than in days past. Does the look and feel of your shop evoke professionalism, trust and quality? Really look. Chances are, it does not.
I understand that it is expensive to remodel. It doesn't cost much, however, to repaint and neaten things up. Clean up waiting areas, throw away old furniture and maybe buy some nicer stuff at auctions or flea markets. Get creative. Have you ever seen one of those home makeover shows on TV where they transform a room with some elbow grease, a few gallons of paint and a huge dumpster? It’s really possible to do if you apply yourself. Create an atmosphere conducive to capturing the jobs that come into your door. A clean, professional office will often sell the job before you even write one line of the estimate.
Treat your customers like gold because they are. Never let them know you are frustrated when they walk in the door five minutes before you are closing. Take care of them better than anyone else around you. Work to gain a reputation in your area that you are, without a doubt, the most customer-conscious shop in your town or market. If this word spreads, and it will, when customers get into a situation that requires your service, they won’t go where they are directed, they will come to you, because every one wants to be treated that way. This doesn't cost a thing, and anyone can do it.
Tighten up the repair quality in your shop. Tomorrow, pull one car out of your completed lineup and go over it with a fine-tooth comb. If you find it has flaws, and you will, don't allow it to be delivered, even if it’s late. It shouldn't be deemed completed if it has flaws, but it does happen more than you would think. I look at every single car that is done in the shop. I don't always see everything, but generally I can catch a few things that were overlooked that need some attention. Make time to do this — little details are really important. I am always amazed that my professional staff and I, who all have so much car knowledge, can look at a finished vehicle and not find a flaw. Yet when the customer arrives, who isn't a car expert, they look at it for 10 seconds and are pointing out issues. This should never happen, and you have to work daily to prevent it. Remember, quality is everyone's job, and it can’t just be corrected at the end of the repair. Quality has to be maintained throughout the repair process, so that when it comes to final inspection, everything is done better than your expectations.
Look at your equipment. Does it need a little sprucing? If it does, take a weekend and do it. A clean, well-equipped shop will go a long way to helping capture a job. When a prospective customer looks into your shop, do they see a modern, maintained facility? Is it cluttered, littered with parts and dirty? It is common sense, but that image does not invoke trust. Again, keeping the shop clean and neat costs very little, but can net a lot.
Think about Wal-Mart, which attracts droves of customers. I go there every week; it’s a great place. Considering all that they carry, Wal-Mart could have gobbled up many specialty stores around them (like the consolidators). And yet, there are numerous other stores that we go to. We enjoy the personal treatment and are even willing to pay more for the same item we could have bought at Wal-Mart — for less. Use this same philosophy for your customers.
Evaluate operations
Every MSO uses a best practices shop operation process across all areas to maintain consistent results. This is a must in any sized shop, independent or consolidator. If you don't operate with specific processes throughout your operation, you need to start. You absolutely have to standardize your operation, from the office, through the repair, until delivery and post-repair follow up. I know that every group works hard on this issue, so you need to work harder! Get your place humming and operating like a well-oiled machine. A smaller company can have the advantage here with owners at the helm to really stand vigilant that the process you put into place is followed on every repair. Following up on this is the most important part. Anyone can develop a process, but staying true to it is the challenge.
Monitor your market, and ask questions when adjusters come into your shop. Find out who is busy, and why. If anyone asks how you are doing, tell them “great!” Psychologically, this is a huge weapon. If prospective customers hear you are busy, they will want to come to you!
Insurance impacts
Be relentless in your attempt to land new insurance contracts. Even when you are told by an insurance company that they don't need another DRP, keep trying. You may just inquire at the right time, when one of the big guys has failed monumentally, and you will get a chance. When you get it, run with it. Believe that no other shop out there, no matter who they are, is as good as you. Keep doing these things and you won’t only survive, you will thrive.
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