Expanding Washington collision repair chain gains sales through service

At 21 shops and counting, Washington State's Precision Collision Auto Body remains in full acquisition mode as it engages in hot pursuit of additional direct repair program (DRP) affiliations while delivering top customer satisfaction ratings.

The chain anticipates bringing in $40 million in gross revenues by the end of the year.

"We're a little different than the other companies out there," says President Greg Wright, whose career background stems largely from the retailing arena. Scott Hensrude, who owns the enterprise along with his wife Christy, has long had a passion for the property investment marketplace after starting out as a collision repairer.

Because each new shop is remodeled by an in-house design and construction team upon completion of a purchase, the structure's location, the circumstances surrounding the owner's decision to sell and local demographics play key roles in the decision process.

"Our ability to acquire new businesses has been driven by our ability to buy the real estate that they're sitting on. That's been an important advantage for us," says Wright, describing the desired customer demographic as simply being a place populated by "people that can drive."

"We like to go into underserved markets and markets where there are less-sophisticated businesses," he said. Prime acquisition candidates are shops where the owner lacks a succession plan and is wishing to exit the industry. "They get themselves in a pickle: 'How do I retire?'"

Wright eschews the notion of "blue sky" reputational value, contending that a purchased shop's prior penchant for attracting customers has little impact on its true worth. Outside of the collision repair industry, typically "you're buying a reputation and a place where people are accustomed to coming, but we don't get any of that."

The transaction voids any existing DRPs that the previous owner had cultivated, and the potential customer base usually lacks a preferred provider due to the rarity of having to utilize such services. "It's not like, 'Every time I get in a wreck I go there,'" he says.

"It's very hard to finance 'blue sky,'" Wright says. "Banks do not give you money to finance a reputation. We have a physical thing that we're getting – real estate."

Thus every acquisition is reconfigured within the property's footprint. "We've never opened one up without remodeling it. We do this so much that we have our own internal team that does this type of work."

The layout and size of each structure is different, obviously, and the design plans are adjusted to fit within basic operational parameters. "We don't run a production line like we're making a Ford or a line of canning jars," Wright says, "but from a process standpoint we're pretty standardized. We've become pretty consistent. We're centrally focused with everybody on the same page."

And the critical passages on management's page revolve around a company-wide adherence to top quality repairs, satisfied customers and a pronounced pattern of nurturing the company's 28 DRPs.

Maximizing DRPs

"What really happens in our business is that if somebody wrecks their car, the first call they're going to make – after they see that everybody is safe – is to their insurance company. You really don't know the process, and you're probably closer to your insurance company (than a given repair facility)," Wright says. "The insurance company says, 'Do you have a shop in mind?' And most people say, 'Not really.'"

Referrals via the DRP element – which account for 80 percent to 85 percent of the repair orders – work to ensure sales success. "What we have, which many people in the industry don't have, is good relationships with the insurance companies," he reports.

"The key word is communication. We communicate with high frequency at the highest levels that we can," continues Wright, noting that regional managers at the carriers are routinely contacted with updates.

"I reach out to them with results, and they appreciate it. We're not waiting for their report card – we're issuing a report card."

If a situation happens to arise with a cycle time or customer satisfaction index (CSI) issue, "we take a proactive approach. When we have a problem we fix it," Wright says. "Typically we've gone to them (the insurer) first and said, 'Here's a copy of the action plan that we've initiated.' Before it hits the next level in their organization it's fixed."

Because of the value placed on volume, disputes with insurers are deliberately kept to a minimum and disagreements over minor money amounts are avoided. "I'm not going to arm wrestle and kick sand on somebody's feet – I'm after the next job," he explains.

"I'm looking for a way to say 'yes' and not looking for a way to say 'no.' I'm not a fan of saying 'no.'"

Wright disagrees with what he sees as a prevailing industry pattern in which body shop personnel "feel like they're doing the best thing for the company by arguing with the insurance company." Not so at Precision, where a system of consistent training conducted in-house and through Gold Class I-CAR, Mercedes-Benz, Toyota and Lexus, plus performance-based payments and promoting from within ensures that the desired management methods are carried forward. Bonuses and paid vacation time are awarded for achieving CSI, sales and cycle time goals.

"Our employees are of the utmost value – same as our customers – and are treated with respect, resulting in high retention and little employee turnover. We've done a very good job of growing people internally – there's real continuity," Wright says.

"Our leadership team implements modeling multiple shops and applies rewards by constantly measuring results. We operate in a family environment with values that promote upward mobility and develop career growth from within," he says. "Roughly two-thirds of our shop managers have been promoted to their current positions. Kevin Caruso, one of our recently promoted district managers, started as a detailer, estimator and manager, and now he oversees seven of our North End Seattle area collision centers."

Retailing expertise

Scott Hensrude, the owner of the chain along with his wife Christy, started sweeping floors at a local car dealership while still in high school and gradually worked his way up to collision repair and painting until he bought his first body shop in Bellevue, Wash., in 1985.

Wright's background includes corporate positions at multi-location retailers such as Costco, Fred Meyers and JoAnn Fabrics. "I'm a retail- and service-oriented guy," he notes.

When a recruiter representing a competing body shop chain came calling, Wright came on board. After a couple of years at that position he connected with Hensrude, who was eager to pursue his passion for real estate ventures rather than handle daily operational duties. Wright's skill set presented a perfect match for Precision; both men are expansion-minded. The 11 existing locations were soon augmented with nine more, and additional acquisition efforts are ongoing.

Wright's initial challenges involved honing the company's infrastructural and personnel attributes to steer a steady and profitable growth pattern.

Developing lean production strategies is also on the agenda. "Lean is something we're just beginning to scratch the surface of," he says. "In a lot of cases it varies according to the facility, and you can't run them all the same. We are students of the lean process."

Waterborne paint is universally applied, and the system's benefits are used as a selling point. "The decision was made to convert in order to protect our employees and environment. It is the right thing to do. The PPG Envirobase High Performance paint line was introduced in 2010," Wright says, and "this product contains lower VOCs than solvent-based paint and proves to be an added value to our organization. While we require employees to wear standard safety equipment, the harsh odors and damaging solvents in the air are virtually eliminated, thus being healthier for employees and the environment."

The customers "have continued to rate our service above the national average at 98.5 percent. Our streamlined vehicle assessment process and parts ordering system, coupled with highly skilled technicians" helps to ensure that the repairs are "done right the first time, on time."

Precision is one of Enterprise Rent-A-Car's largest customers in the state, and several shops have convenient on-site rental offices.

Word-of-mouth advertising and a high percentage of repeat customers is another marketing plus, and the company places ads in local newspapers and airs spots on a popular country music radio station. A full time marketing staff handles outreach programs to the community and insurance agents.

An informative website, Facebook and Twitter are utilized, and the company belongs to 10 Chambers of Commerce. A large amount of civic and charitable activities also are conducted, including vehicle donations and participation in Recycled Rides, firefighter Jaws-of-Life events via First Responders Emergency Extrication (FREE) and the Distracted Driving Initiative (DDI) at high schools.

"We have attended local car shows with our marketing vehicle, we offer free detailing certificates on occasion and currently have a unique program offering free gas to local Microsoft employees," Wright says.