By Jeff Sanford
Toronto, Ontario -- October 19, 2015 -- Owners of independent collision repair centres will want to take note of an event the Society of Collision Repair Specialists is putting on at this year’s SEMA event in Las Vegas. As part of the organization’s Repairer Driven Education Series, well-known Tennessee-based collision repair consultant David Luehr will deliver a presentation explaining how independent shops can compete with the consolidators.
The biggest trend in the industry over the last several years has been the ongoing wave of consolidation that has swept through the collision repair industry. For some owners the offers to sell have been welcome, but there are many owners who want to stay in charge and in the business. For those owners, it’s more important than ever before to figure out how to compete against chains that benefit from economies of scale.
In a recent conversation with Collision Repair magazine, Luehr discussed how independents can compete with the consolidators. Step one is getting over the fear that one cannot prosper outside of the big corporate environment.
“Fear drives consolidation. As independent collision repairers, if we don’t think we can survive because of our limited beliefs, we might bail out of the industry. How I’ll start the presentation is looking at these limited beliefs and offer practical advice on dealing with that fear,” says Luehr.
Luehr says that once the fear is managed, the way forward is actually fairly clear. “What I’ve done is study what the best of the best of the independents are doing in consolidating markets and found out how it is they’re still kicking butt,” he says in his warm-sounding southern drawl.
Luehr has deep experience in the industry. He has been chairman of Middle Tennessee’s award winning I-CAR committee. He has over 30 years experience in the collision industry. He’s held leadership positions with several MSOs and is a former president of the Oregon Auto Body Craftsman Association. Today Luehr runs Elite Body Shop Solutions, a consultancy that helps independents tune up their business and stay in front of the corporate stores.
“What the presentation will focus on is what it is shops have to do to create a new normal for the way the customers experience the repair process. For the most part, I’m seeing pretty mediocre customer experience. We’re trying to be as good as the guy down the street, but sometimes they’re not that great either. How do you get a customer to go out and be a promoter of your business? That’s what you have to get clients to do. What a lot of independents don’t understand is that they have an opportunity to outshine the consolidators when it comes to customer experience,” says Luehr. “The differentiator is, you’ve got to take advantage of the opportunity to show integrity. During my presentation I give an example of my favourite restaurant. It has good food and good service. It’s not Wolfgang Puck’s restaurant. But when I go, I get the same exact food quality, the service is consistent, and if they tell me it’s going to be a fifteen minute wait, it’s a fifteen minute wait or shorter. The experience is the same every time. The independents who are winning are showing me integrity and consistency.”
How does a centre build these qualities into their business? “Due process. People are feeling victimized as if it were some sort of Wal-Mart effect that consolidation brings. But the independents have got all the advantages. This is not a Wal-Mart industry. We’re not moving huge amounts of stuff. This is a service industry. Who does service better?” asks Luehr.
“In collision repair, no one does process better than ABRA (a major US chain – Ed.) … and the other guys aren’t too far behind. But they’ve got processes. If you can take what they’re doing right, and combine it with great customer service, you’ve got them beat. Independent shops are horrible at this. Only one out of ten clients I visit have procedures that are written out. So every time they hire someone new there’s no telling how things are going to be done. The chains test people. They don’t assume their people know everything. Then they audit the hell out of those systems. That’s where the rubber meets the road. But independents can do this too. And they can do it better. Not everyone knows how to go about putting processes in. That’s what I can do. That’s what my business is about. Helping independents believe in themselves and get over their fear. Build a winning culture. If the independent has a passionate owner, they are going to be much better off than a corporate-run ABRA store. They’re going to be a winning team. You have to combine the processes with the passion.”
Often the thing that independents lack is the scale and size that the chains offer. But Luehr says that scale and size can be found in other ways. There can be a relationship with a wider group of independents. Or there are chains that offer franchising opportunities. Interestingly, Luehr mentioned that he likes the Fix Auto model, which is a franchise model. Owners don’t have to sell out. But can remain the owner of their shop and have access to a wider network. The idea of ownership and the preservation of entrepreneurial attitudes at a store level is one of the benefits that Fix Auto head, Steve Leal, emphasized in a conversation earlier this year with Collision Repair magazine.
“Fix Auto, I think that is a wonderful opportunity. Instead of selling out the owner can still be the owner. But they have that help from head office. For companies that haven’t done a great job branding, that’s a great opportunity. It’s not for everybody, and there are other franchise opportunities that allow you to keep your name front and centre, but that is a good option. The best of the best independents, all of them are affiliated with some type of a group. It doesn’t have to be a franchise. It could be through an association or 20 group, for example. It gives them a view outside of the office walls,” says Luehr. “Independent collision repairers have many advantages over consolidators that many are unaware of. Sometimes you just need to have to have a way of seeing beyond your own walls. Maybe that’s through an affiliation with some other independents.”
Catch the full presentation November 3, 2015 between 9:30 am and 11:30 am in the Las Vegas Convention Center, Upper North Hall.
For more information on the SEMA Show, please visit semashow.com.