Running a Shop Finance Tools Technology Education+Training

Would You Do It All Again?

Order Reprints
FB_Topical_0621

Go to the Relentless Collision web page and you’ll be greeted by a large headline: “Modern High Technology Collision Repair.”

A smaller one follows: “The most advanced equipment and personnel for luxury vehicles.”

Scroll a bit further and there’s another message.

“Multiple OEM certifications means we are trained experts. We research and confirm the proper procedures every time,” the web page says. Relentless is certified by BMW, Mercedes-Benz, Tesla, Kia, Fiat, Chrysler, Nissan, and more.

Is its founder and CEO, Todd McGowan, leaning into certifications as part of his year-old shop’s identity?

“I think that’s exactly what we wanted to do,” he says. “Focus on certification programs and insurers who want to support that as well.”

A number of shop owners, OE representatives, and collision repair industry watchers alike say that OEM certification programs are the future of the industry.  While some programs are decades old, other automakers launched theirs more recently, pushing the topic of certification to the fore.

Are shops that have invested in certifications seeing a return? And would they do it all again?

So far, says McGowan—who retired after growing and selling an MSO, only to unretire out of self-described boredom and to fill a gap in the Raleigh, N.C. collision repair market—he’s pleased with his ROI.

“We’re definitely getting a return on it now,” he says, noting that Relentless Collision, six months into business as of this spring, was bringing in $300,000 per month.

Of course, the aim of OEM certification programs isn’t profits—especially when viewed through the lens of ever-advancing safety and driver-assistance technology—reminds Mark Zoba, manager of collision network growth and strategy for Nissan, whose certification program is administered by Assured Performance Network.

“Repairing these vehicles today is not the same as repairing vehicles 20 years ago,” says Zoba. “Shop certification helps ensure that a collision repair shop has the right tools, equipment, and advanced training to repair vehicles back to manufacturer specifications.”

The specificity of the tools, equipment, and the level of training required for repairs now, and into the future, says Jeff Peevy, I-CAR vice president of technical products, programs, and services, is raising the bar when it comes to OEM certification. 

“In my opinion, those that repair the vehicles are simply going to have to make a business decision” about certification, says Peevy. “You’re making a decision if you don’t make a decision.”

Shop: Dents Unlimited Owner: Marc LaFerriere Location: Columbia, Mo. Size: 17,000 square feet Staff Size: 5 technicians for collision repair business (3 body techs, a painter and a helper) Annual Revenue: $1.56 million  (2020, COVID impacted, collision repair work only) Number of OEM Certifications: 11 Seeking More Certifications?: No

Shop: Relentless Collision Owner: Todd McGowan Location: Raleigh, N.C. Size: 16,500 square feet Staff Size: 14 Annual Revenue: $3.6 million (based on spring 2021 monthly revenue) Number of OEM Certifications: 10-plus and counting Seeking More Certifications?: Yes

Shop: Schoonover Body Works Owner: Mike Schoonover Location: Shoreview, Minn. Size: 14,000 square foot Staff Size: 14 Annual Revenue: $2.8 million (2020, COVID impacted) Number of OEM Certifications: 0 Seeking More Certifications?: No

‘Technical Tsunami’

Still, there’s a tension between the investment to become OE-certified—it can cost tens of thousands of dollars in time, training, and equipment—and the return from that investment, alongside the fact that any collision repairer worth his or her salt is striving for proper and safe repairs, certification or none.

According to the 2020 FenderBender Industry Survey, 56 percent of responding shops said they held no certifications. According to the 2021 survey, the balance shifted: 51 percent of responding shops said they hold no certifications, though 8 percent of those shops said they plan to become certified in the future.

It’s the march of technology that’s all but certain to force the issue, says Peevy. He argues the familiar strategy of tackling issues as they come up is obsolete.

“I take the position that the whole, ‘We’ll take on anything and figure out how to repair it, while we’re in the middle of the repair’—those days are over,” he says.

Peevy says the automotive industry is in the midst of a “technical tsunami,” and even his organization, with its focus on information, knowledge, and skills, is working hard to keep up. 

I-CAR’s recent investments, such as creating ADAS and EV labs, far outpace those of what Peevy characterizes as “traditional years.” Providing instruction on how to repair EVs, he says, includes high stakes technician safety training, such as how to approach the vehicles to ensure they are safe before being brought into a facility, as well as disconnect, zero potential, and bonding checks to ensure high voltage systems are safe before the repair process begins.

The pace of change is also altering the organization’s technical strategy.

“Even with the focus I-CAR has on technology,” he says, “we’ve really had to challenge the way we do everything.”

While Peevy stresses that body shop owners need to make their own decisions as to whether or not OEM certification is best for their business, and that I-CAR can support decisions with training and other resources, one constant in today’s vehicles is change.

“The speed that technology is changing is what will keep people that do not have the necessary tools, equipment, and training from being able to properly repair these cars,” he says.

The rate of ongoing technological change could even be fatal for some shops, says Eric Mendoza, Toyota’s manager of collision operations. 
Advanced driver-assistance systems are already altering the nature of collisions—he says further automation of vehicles will limit the number of  accidents, putting a squeeze on the industry.

“I think we’re going to see fewer and fewer shops,” says Mendoza. “There’s no doubt—even COVID couldn’t stop the forward motion of autonomous vehicles and electric vehicles and all that’s happening there.”

Will OEM certifications help shops of the future stand out by being tied to specific manufacturers? 

Says Mendoza, “I think with less competitors, certification is going to do that even more.”
 

‘The Rest Will Come’

Toyota, which requires collision repairers to be 15 percent dealer-owned to be part of its certified network, stresses better repairs over return on investment as a reason to become part of its program.
That’s according to Toyota’s manager of collision operations, Eric Mendoza, who says the program’s end goal is to help shops “get their heads out of the sand so we can make them better collision centers.”
“It’s going in and showing them how to read our repair manuals, interpret and pull all the necessary documentation that says how we want our vehicles fixed, and how to educate the insurance partners that they’re working with,” he says.
Generally though, Mendoza says, certified centers outperform eligible centers that are not certified in terms of profit, fixed absorption, and average dollars per repair order.
“It seems to be the most effective way of us helping them,” he says, noting the program is also not advertised as a means of centers gaining referrals.
“We’re not looking to replace DRPs, we’re looking to improve the quality of a collision center and the rest will come,” Mendoza says.

Waiting On the Return

Marc LaFerriere, owner of Dents Unlimited in Columbia, Mo., says he expects his many OEM certifications to help his shop stand out right now.
Featured in a 2016 FenderBender story on the certified-shop landscape, at the time, Dents Unlimited held five certifications and had brought in $1.48 million the year prior. 

LaFerriere said back then he was all-in on the training and tools aspect of certification, while he still had other questions.

“There’s the whole other part of it: Will it gain me customers?” he says in the 2016 story. “That has to be an important part, right? We went from PDR to full, certified collision repair. Will customers recognize that?”

They did—or at least someone did.

“Our business is growing a great deal. The [influx] of work we get through these programs is a huge part of that,” he says in the 2016 story. 

Half a decade on, and Dents Unlimited has 11 certifications. Speaking recently, LaFerriere says his shop is now the only that’s Volskwagen-certified in the state of Missouri. He added the German automaker’s certification alongside Subaru’s in recent years, atop his existing programs with FCA, Honda, Nissan and others.

The shop, impacted by COVID, had an annual collision repair revenue last year of about $1.56 million.

“I really went after a lot of certifications,” says LaFerriere. “I wanted to be the first to market with as many as possible.”
“It’s a big return to get back,” he says.

LaFerriere says he focused on getting into programs that were less specific about their equipment needs—he says he’s still paying off certain items—and chafes at the specificity of some programs’ requirements.

“Why does one manufacturer say you need to use a Celette frame rack, another one says Car-O-liner is just fine. … As long as they do the measuring properly, does it really matter?” he asks. 

Beyond the continuing equipment costs—he estimates he’s spent six figures there—LaFerriere says he spends $30,000-$35,000 per year on dues for his 11 certifications. He says the numbers don’t make sense for him to get into higher-end programs like BMW or Tesla.

“I think I’m probably to the point now where I’m not looking at any new certifications,” he says.
 

Certification and ‘Regular Cars’

Profiled in the March 2021 issue of FenderBender, Mike Schoonover, owner of Schoonover Body Works in Shoreview, Minn., told the story of how his shop dropped out of all its direct repair programs, and his numbers showed he was better off for doing it.  
Not mentioned in that story was what his shop did with all its OEM certifications—Schoonover estimates at one point he held 15 or so, most of them through the Assured Performance Network. Now? None.
“At the end of the day, it doesn’t matter if you’re OEM-certified or not on the regular cars,” he says, explaining his breaking point was a near total lack of referrals based on his certifications.
While representatives from both Nissan and GM note drivers can find a directory of shops certified to repair their vehicles on their respective websites,  Schoonover—based on a Facebook poll of those who are engage with his shop online—says his customers aren’t looking toward their vehicle’s manufacturer for that information. They’re asking friends and family.
“We are taking care of our customers,” he says. “My belief is if we’re taking care of our customers … they will make the decision to come back and will make the decision to refer their friends and family.”
Schoonover says his shop has an Autel system for pre- and post-repair scans, and that he sublets advanced driver-assistance systems calibrations. The shop pulls OEM repair procedures on a day-by-day basis for jobs and bills for the cost. He says the daily downloads of procedures are easier to bill than having an annual subscription.
He says, however, that it’s a different ballgame when it comes to higher-end vehicles and certification.
Todd McGowan, owner of Relentless Collision in Raleigh, N.C., says he’s banking on owners of makes in which he specializes—BMW, Mercedes Benz, Tesla, and others—to hit their OE’s website and then to find his shop.  
“[Those drivers] are more prone to search the internet ...” McGowan says. “The newer, the more expensive, or the more special the customer believes their vehicle is, the more likely they are to seek out a specific shop that caters to their vehicle.”
Schoonover says he’ll stick to his chosen niche.
“We made the decision we’re going to be the Average Joe Collision Repair Shop and just take care of the people,” he says.

Future and Current Features

The future of safe repairs, underscored by I-CAR’s electric vehicle laboratory, will involve more and more EVs. 

General Motors recently said it intended to only manufacture electric vehicles by 2035. Chris Blackmore, GM’s collision program manager, says the company’s certification program, its Collision Repair Network, will play a key role in backing up that goal.

“With GM’s vision of a world with  zero crashes, zero emissions, and zero congestion, in addition to the many new models scheduled for introduction over the next few years, our CRN strategy acts as the catalyst for safeguarding proper, safe repair of both the [battery electric vehicle] and [internal combustion engine] vehicles going forward,” he says. 

While internal combustion vehicles will remain on roads, Blackmore says EVs will be a driving force behind how GM’s network evolves, as well as other OE certification programs in general.

“Electrification is going to play a key role in the network’s evolution from a tooling, training, repair, and customer experience perspective,” he says. “Certification programs must adapt as well, and the solution must be flexible from a workflow, training, and repair perspective.”

Another coming shift that will push networks’ evolution, says Nissan’s Zoba, will be vehicles’ ability to communicate with the rest of the world. 

“The increasing prevalence of connected cars on the road is leading to a shift in first notice of loss, and we are preparing our network for that future,” he says.

One of the key benefits right now for Nissan-certified shops, says Zoba, is training not offered elsewhere in the collision repair industry, which can benefit shops on the business side.

“We offer training on how to write comprehensive initial estimates to help shops reduce cycle time by capturing most repair procedures from the start,” says Zoba. “We also recently launched a scanning and ADAS calibrations course, allowing shops to bring calibrations in-house.”

The representatives from both Nissan and GM say they have marketing that pushes drivers of their company’s vehicles toward OE websites, which route drivers toward certified shops. The sites feature locators and repairer information. 

GM, says Blackmore, has systematic oversights that “measure CRN  repairs and customer handling on every repair and report on our facilities’ status.”

Nissan, Zoba says, recently added functionality to its website so customers can submit a photo of a damaged vehicle for an estimate from a certified shop, should the shop support the feature.

Growth and Expectations

The representatives from all three automakers who participated in this story say their respective certified programs remain works in progress. 

Less than half the roughly 500 shops eligible for Toyota’s program are part of it, says Mendoza, adding, “What we’re building towards right now is getting any eligible collision center into the program that isn’t already.”

Blackmore says there are about 500 active certified shops in GM’s Collision Repair Network, noting it’s still in a growth phase, as GM looks to grow strategically. The automaker, working with Mitchell, launched its Canadian Collision Repair Network last year. 

There are more than 1850 Nissan-certified shops in the U.S., says Zoba. 

“On one hand, from a size perspective, yes, the network is more or less complete,” Zoba says. “On the other hand, based on our vision of the future of collision repair, we see a lot of potential with the network and try to consistently push the boundaries. … Certification of repair shops is an evolutionary process that we continuously work to improve for our certified shops, our dealer network, and our owners.”

Shop operators say collision repairers should make certification choices based on which brands land the most on their shop floors, while some OEs limit the number of certified shops they allow in a given market.

McGowan, who founded Relentless Collision last year, has three more shops in the works, slated for Cary, Durham, and Charlotte, N.C. Each market will dictate which programs the shops are part of.

LaFerriere, the shop owner who is no longer seeking more certifications, says he’s optimistic his current programs will provide his shop more of a boost, and soon.   

Further advances in technology, he says, including the possibility of telematics telling drivers to take their vehicles to certified shops, should in the next three or four years bring a stronger return on his investment.

For the time being, he says his shop's certifications act as solid marketing, an assurance to customers “that we’re doing safe repairs.”
Asked if he’d do it all again—11 certifications—LaFerriere offers a measured response.

“I believe I would—I would go about it differently, I don’t think I would have done it so aggressively,” he says, circling back to the knowledge that his shop is doing safe and proper repairs.

“I think I’m further along in that regard than had I not done it,” he says, “and I think that alone makes it worth it.”
 

Related Articles

Best Workplaces 2021: Do It Right the First Time

You Can Always Do More

Do You Have the Right Curing System?

You must login or register in order to post a comment.