Wednesday, 25 June 2014 16:31

Using an Outside Expert to Improve your Competitive Position

Written by

I received a call last month from a dear friend of mine on the West Coast. I’ll call him Paul here, but that’s not his real name. His voice was shaky and he was clearly upset.

Paul told me that one of the big MSOs had recently acquired a shop just down the street from him and at first he wasn’t too concerned, but now he was extremely concerned. My friend has always ran a very good shop, so I asked him what he was so worried about to which he replied, “I hate to admit it, but these guys are better than I thought and I am losing business to them!” You see Paul’s biggest DRP provider put his new big MSO neighbor on the same program even though they are only a block apart! What’s more, Paul was told by his DRP coordinator that unless his shop improved its KPIs, his new neighbor was going to be receiving the lion’s share of the business.

Paul’s story is not an isolated one. Knowing Paul, he will figure out a way to compete and win, but he is going to need some help.

Everyone in the collision repair industry knows how challenging it has become. DRPs are demanding more, Consolidators are growing faster than ever, and profits are shrinking. The shops that are serious about competing in this game need to quickly improve their position in the marketplace by performing at unprecedented levels. This document is intended to show the reader that many of the advantages provided to large MSOs can be afforded to any shop serious about transforming their business through using an outside firm to provide many of the services.

Organizations like Service King, ABRA, Boyd Group, etc. have systems in place that give them a very strong presence in many major markets in this country. These systems allow for consistent and predictable results in quality and customer service. These systems when combined with the footprint of the consolidators, gives them a very lucrative “seat at the table” with all major insurance carriers.

While each MSO is slightly different in their approach to centralized resources, this is a generalized list of advantages that large MSOs have over the rest of us…

■ Assurance of DRP affiliation when opening new locations
■ Centralized Human Resource Departments
■ Centralized Accounting
■ Centralized Customer Call Center
■ Centralized Load Leveling
■ Centralized Management of I-CAR Gold Class
■ On-line training, Learning Management Systems, and testing
■ Self-managed DRP with centralized audit teams
■ Marketing Teams
■ Safety and Environmental Compliance Teams
■ Proven workflow systems and accountability to make them work
■ Mass advertising and name recognition
■ Ability for employees to help other locations when needed
■ Stability and benefits are attractive to potential new-hires
■ Buying power
Most small collision repair businesses must attempt to perform many of these functions, but are rarely able to perform all of them well, if at all. To remain profitable typical shop owner/managers must perform many of the functions that shop managers at large MSOs don’t have to deal with. The time that a typical shop manager would spend performing many of these functions is spared to the large MSO shop manager thereby providing them time to ensure that processes are being followed, quality and cycle time standards are being met and in many ways acts as an “auditor.” With these disciplines in place, it becomes very difficult to compete with these guys.

In order to perform all these functions that are required, you would need to hire people that are experts in Insurance DRP Relations, HR, Accounting, Customer Relations, I-CAR Gold Class, Marketing and Advertising, Safety and Environmental Compliance, Admin Workflow Systems, Change Management, Lean, etc., etc., etc. I would bet in most collision repair businesses, at least one or more highly paid people would need to be hired to perform all of these functions which are currently not being performed well or at all. That could equate to $5,000 - $15,000 a month, plus benefits to hire who is needed to get all this stuff done! This of course would be considerably more if you have multiple locations needing these services.

Solutions can be provided by an outside firm at a substantially lower price and be performed by experts that will ensure these functions are performed precisely. So in other words, you could get many of these functions at your shop performed both better and cheaper than trying to do it yourself in-house.

A look at ROI

Is it actually costing you money by not using an outside firm? In many cases, yes! Training & Coaching has been proven to increase a shop’s Key Performance Indicators substantially. Coaching and Training provided by qualified outside sources can have an immediate positive impact on both KPIs and return on financial investment. Even a modest 5% increase in productivity at a shop producing $100,000 in revenue can yield an additional $2,000 in gross revenue which in many cases is enough to pay for the outside services. There are many cases of shops experiencing significant gains in productivity and profitability that never would have been possible with the assistance of outside experts. Don’t expect quality outside services to be cheap, but look at it as an investment with a favorable ROI.
Do your homework when hiring a business coach or any kind of outside service, these folks in many ways become a reflection of your business and will have an impact either positive or negative. You must be able to trust them much as you would a new employee, so don’t feel you need to hire the first one that comes along.
The old saying that the “Definition of Insanity is doing the same thing over and over and expecting a different result” is exactly what many shop leaders continually do. It doesn’t have to be this way. Quality of life for stakeholders at body shops doesn’t have to be so bad. We all need help, and there are resources available to provide support.

Resources Available:

Business Coaching & Consultants
● General Business Consulting
● Admin Workflow Processes & Implementation
● Learning Management System
● Leadership Coaching
● Training Clinics

Online Human Resources
● Hiring Programs
● Performance Evaluation Process
● Employee corrective action
● Legal Advice

Data Management
● CSI
● Centralized Call Center
● KPI Management & Reporting
Safety & Environmental Compliance
Marketing & Advertising Solutions
I-CAR Gold Class Management
Associations, Buying Groups &
Networks

If you would like more information, or a referral to a capable service in your area, feel free to contact me at dluehr@msn.com

Read 1423 times