Thursday, 22 September 2011 16:15

It’s a Perfect Pair: Honda’s Collision Select Program & OEC’s CollisionLink®

Written by Ed Attanasio
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Memorable partnerships make for great history: Hope and Crosby; Mantle and Maris; Jobs and Wozniak; Donny and Marie; Tom and Jerry—to name but a few. American Honda and OEConnection’s (OEC) CollisionLink® program can now be included on that renowned list of successful alliances.

Since 2009, the automaker’s wholesale parts program, Collision Select, has connected a large number of body shops to their Honda and Acura dealerships’ parts departments via OEC’s CollisionLink parts procurement system. Through Honda’s program, the carmaker enables its participating dealers to assist body shops in enhancing their cycle times, alleviating shop returns, and streamlining parts ordering, but most importantly for repairers and parts managers, it allows shops to incorporate more Honda and Acura Genuine parts into their repairs.

To further support an already healthy working relationship, American  Honda is providing additional support  to its dealers, through an aggressive promotional campaign known as “A Perfect Pair,” designed to provide further exposure and ultimately sign up additional collision facilities nationwide.

OEC’s Director of OEM Program Management, Bill Lopez, 47, has seen the collision industry from disparate perspectives over the past 22 years. After college he worked as a Claims Manager with Farmers Insurance, where he learned estimate writing, the importance of cycle times and the issues common to insurers, body shops and their customers. He also worked in business development with a paint manufacturer, an online estimating company and even joined an internet startup for a time in Silicon Valley.

Lopez manages all of OEC’s OEM relationships which include alliances with major nameplates such as Ford, GM, Chrysler, Nissan/Infiniti, Volkswagen, Southeast Toyota and the aforementioned Honda/Acura. Of this group, Honda/Acura, Ford, Nissan/Infiniti and Volkswagen have exclusive agreements with OEC, which means their original parts programs can only be featured on a site such as CollisionLink, according to Lopez.

Lopez cites several major reasons why OEC has grown at a steady rate since it re-launched CollisionLink in 2006: “Since we have data access agreements with virtually all automakers, we’re able to scrub the parts to determine that in fact they’re the right parts for that damaged car Lopez explained. “CollisionLink is built on parts efficiency and order accuracy, which leads to fewer returns. And the end result is improved customer satisfaction, between the body shops and the dealerships. Those four things make up our core value proposition.”

According to OEC statistics, approximately 4,500 to 5,000 body shops use CollisionLink on a daily basis. “There are somewhere between 35,000 to 40,000 body shops in the United States currently,” Lopez said. And we know that roughly 12,000 of them do the lion’s share of the business. So we work with almost half of these major players and continue to add more all the time.”

Lopez knows the ongoing struggle that exists between insurers and body shops based on his extensive experience. That's why he says he knows the value of CollisionLink for companies like American  Honda and their dealerships throughout the country.

“One of the major metrics that insurance companies look at closely is parts utilization. A shop can either use an OEM part, a recycled part, an aftermarket part, or a re-manufactured part. When an estimate is written, a percentage is assigned to one of these categories. It’s called ‘part content’ and it’s one of the many metrics used by insurance carriers to rate their DRP’s performance.

“If a shop has a 95% OEM parts content, an insurance company looks at that and says, ‘this shop is using a lot of OEM parts and it’s costing us money. They’re not doing a good job of managing their average repair costs, so I have to go in there and scold them.’  Of course insurance companies like to see more recycled, aftermarket, and remanufactured parts in their estimates, because the perception is that these parts are cheaper to purchase, but OEC’s CollisionLink is challenging that paradigm.”

Says Lopez, “Body shops are now telling their insurers, ‘sure, I’m using a lot OE parts in my repairs, but I’m not costing you any more, because my costs are in line with my peers. So, don’t worry about my repairs, because CollisionLink helps take advantage of all these OE programs, where I can essentially buy original parts at aftermarket prices.”

Educating insurance companies of CollisionLink’s core value proposition as well as its ability to administer OE discount programs is an important role for Lopez. “A large part of my job involves educating the insurance companies about CollisionLink... I tell them to take a look at our software, because they can get more OE parts on their customers’ vehicles, thereby increasing their policy holders’ satisfaction while managing their repair costs.”

Getting dealerships to jump onboard is also a huge part of the equation. Says Lopez, “It’s contingent on the dealership relationship. If the dealer responds quickly, [CollisionLink] works well and the body shop will use it. The dealerships pay for it, but it’s free to the shops, so hopefully the dealer is continually touting it and educating them about it.”

Once they take the time to look at CollisionLink and the OE programs it administers, body shops see the value and will at least consider it. “When the shops realize that they can use an OE part instead of an aftermarket part at the same price and retain the same margin, now they’re listening and the light goes on,” Lopez said.

Lopez is pleased to be working with American Honda for a wide range of reasons. “Honda is an awesome company to work with, because they’re very methodical and everything they do is carefully planned and strategically positioned. We’re very fortunate to be an exclusive partner with Honda, because they are definitely in a class by themselves when it comes to collaborating with us and innovating with them. They’re world-class and sincere in their efforts to provide optimum service to the marketplace that helps them to sell more parts, but in the end, everything they do is fair and well-thought out.”

The data shows American Honda is number one when it comes to selling parts utilizing CollisionLink. “Their program parts are converted at a higher rate by more body shops using Collision Select via CollisionLink. Honda has a field service team that’s 100% dedicated exclusively to the success of their Collision Select Program and that’s why they hit great conversion numbers consistently.”

One Honda Parts Manager who believes in the power of CollisionLink is Ron Shaw, 49, who has been with AutoWest Honda in Roseville, Calif. since 1991. He runs a department employing 19 people and sells approximately $7 million in parts annually. Although Shaw does not personally implement CollisionLink every day, he delegates those duties to a select group of his counter people.

“I have key people I rely on to coordinate a lot of the computer duties around here and they’re very good at it,” Shaw said. “Yes, there’s no doubt that CollisionLink is a useful tool. Once our body shops decide to use it, they definitely like it, but there are a lot of smaller mom and pop shops in this area that aren’t completely onboard for anything involving the computer. We try to educate all of the customers we’ve got, to let them know that if they sign up for this program and use it, they’ll be able to use more original parts. I’m sure they’re all game for that, because they want to use OEM parts whenever they can, as a rule. It’s absolutely a benefit to them, especially since they don’t have to pay a dime to use it.”

AutoWest Honda Roseville is adding more body shops to CollisionLink all the time. “We have something in the area of 30–40 shops that we’ve signed up. Traditionally, the big box body shop chains sign up and use it enthusiastically, while many of the smaller shops have resisted using the tool. We’re able to convert aftermarket or recycled parts to OE parts about 96% of the time,” Shaw said.

How is Shaw able to get body shops to use CollisionLink, especially when they’re reluctant to try it? “Our outside sales person Suzie Troth is constantly visiting body shops to tell them how much CollisionLink can benefit their business. Then it’s just a matter of them perceiving the value. We also try to educate them over the phone, stressing the ease-of-use and the fact that it takes all of the guesswork out of the process. It quantifies precisely what the parts are and what the prices are—so we can be sure we’re comparing apples and apples.”

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