DRPs. Supplements. CSIs. Consolidators. These are just some of the daily business pressures that make it tough to keep up with the work of actually repairing cars. “I know how to repair a car inside and out,” says Tom Palermo, owner of Tom Palermo’s CRASH1 shops in Crystal Lake and McHenry, Ill. “But outside of that box—marketing, financial services, corporate sales—I don’t know everything. Especially how to open those corporate doors. Insurance companies don’t want to talk to a single, small body shop.” Palermo, with 31 years in the business, isn’t alone.
In 1997, he became one of the first locations of CRASH1, a network of 40 independent collision repair centers located in Wisconsin and Illinois. Formed in Rockford, Ill., by three former locations of the CarStar franchise (based in Overland Park, Kan.), CRASH1 combines its locations’ resources to help shops improve their businesses and provide a more powerful marketing presence for insurance companies
The CRASH1 Story
Bill Wynkoop and Dave Replogle, collision repair shop owners in Rockford, first banded together in 1997 to create CRASH1 Collision Centers when their CarStar membership ran out. Business groups in that franchise drove the insurance relationships and marketing efforts, but Wynkoop and Replogle decided they could replicate those roles themselves, without the franchise fees. Successful in growing their businesses together, they attracted other friends in the state—such as Palermo—to join them informally, says CRASH1 President Jim Keller, AAM, who owns a multiple-location shop in Milwaukee, Wis.
A few years later, in 2002, Keller and Troy Gates, who owns several collision shops in Madison, Wis., joined them. “We got to talking about the powerful concept of shops working together and combining resources,” says Keller, a past chairman of the board of the Automotive Service Association (ASA), as well as a 2003 Body Shop Business magazine Collision Executive of the Year and inductee into the Collision Industry Hall of Eagles. “We came up with the mission statement that we were a group of independent shop owners [who were] going to combine resources to create better business performance, market our businesses as a group, and create efficiencies that come form that.” They decided to invite all the shops they knew that were insurance friendly and dedicated to improving and growing their businesses. “We had 15 locations after that meeting,” Keller says. And a new name: the CRASH1 Collision Repair Network.
To save money for its locations (fees are proprietary), CRASH1 uses some of the tools already at its disposal through partners such as the DuPont Performance Alliance, the collision coatings division of the Wilmington, Del.-based chemicals company. For example, CRASH1 uses DuPont’s Customer Satisfaction Index (CSI) and other tools designed to market to insurance companies, for referrals and claims.
CRASH1 is looking to grow its network of shops. Besides Illinois and Wisconsin, CRASH1 will look for locations in Iowa and Minnesota, Keller says. But it’s not interested in national growth, since decisions about car repair and coverage by insurers are grounded in local and regional relationships. Likewise, Keller says, CRASH1 won’t acquire any of its locations; rather, it’s interested in promoting the growth of its independent operators so that the whole network is stronger. Putting it in perspective, Keller says, “It’s a bad time to be alone in this industry.”
Shop size doesn’t matter to CRASH1, but attitude does. Prospective shops have to be “well managed, insurance friendly, and interested in growing as a business and improving performance,” Keller says. “We run into some shops that think they have plenty of business, but are not interested in making themselves better. That’s not the shop for us. They have to be serious about growing their market share, profitability and performance.”
Here are the goals CRASH1 lives by:
• to improve the customer satisfaction and performance of its businesses through standard operating procedures, which are designed and established by a qualified third party (DuPont’s “Performance Alliance”™)
• to develop quality relationships with insurers
• to be the market leader in effectively and efficiently processing auto collision repair claims
• to be the preferred company in their market area by striving to constantly improve the process through best practices, high levels of management, technical training and meeting the high standards of the CRASH1 Network.
• to provide responsive and ethical service that delights customers
• to do “whatever it takes” to build the trust of our customers to earn referrals.
CRASH1 leaders take a tour of prospective locations and interview the owners. Then they ask existing network locations if there’s any reason not to admit the new location. “They’ve tried to gather the market leaders in their areas,” says Jamie Gelting, owner of Pesicek Collision CRASH1 in Oconomowoc, Wis., which joined CRASH1 in late 2003. “And that’s great, because I’ve always believed you have to surround yourself with people you aspire to be like in order to grow.”
Benefits to Collision Repair Centers
CRASH1 seems truly to give as good as it gets, offering its network shops leverage with insurers, marketing help, training opportunities and a sense of camaraderie.
Unified marketing message. One of the most attractive features of being a CRASH1-affiliated shop is the network leadership’s ability to represent the group to insurers, who bring in the majority of business to collision repair centers. “Shops gain exposure they wouldn’t on their own,” Keller says. Keller and David Kwasny, CRASH1’s vice president of insurance relations, spend two to three days a week meeting with all the insurers in Wisconsin and Illinois, making sure they’re speaking to each insurer at least quarterly. They also hit five insurance shows a year, displaying the outside and inside of each location’s shop on a flat-panel screen at their convention booth.
“The amount of times we’re (collectively) in front of the insurance industry really goes up compared to a single shop operating on its own,” Keller says. “We’re carrying the message on a daily basis.”
What is that message? CRASH1 demonstrates the consistent high-quality performance of its shops through the data it tracks, Keller says. “We can break it down by insurer. We show them the customer satisfaction ratings tracked by a third party. We can show those scores for the network overall, or break that down to the shop level, so they can compare our network performance versus the national average scores.”
Insurance companies are also interested in other data the network tracks, such as parts percentage usage, repair versus replace ratios and cycle times. “There are probably 20 different numbers they’re interested in looking at, and we can compile that data and share it back with them,” Keller says. CRASH1 also advocates for its locations at these meetings, he says, discussing how its shops could earn even more business from existing relationships.
The conversation flows both ways. Insurance companies also call Keller, he says, to “get a sense of what’s going on with shops,” for example, to find out which estimating system is most liked by collision repair shops.
In response to a growing customer-pay portion of the collision business—where customers might pay a $1,200 bill themselves rather than activate their $1,000 insurance deductible—CRASH1 is in the process of rolling out a direct-to-consumer marketing piece. But it’s too early to say what that piece will look like, Keller says.
Single point of contact for insurers. Besides carrying the marketing message, in some cases CRASH1 takes on the paperwork headaches for its locations, particularly those of applying for the many different direct repair programs (DRPs).
“Instead of having to take that time to apply for all of those DRPs and attempt to analyze their performance for each, we can do that on behalf of our shops,” Keller says. “And if an insurance company has an issue with a shop, where they’re trying to get something resolved from a performance standpoint, they contact the network and we go and work with the shop. Shops agree to a “single point of contact” when they join the network.”
Dedication to continuous improvement. CRASH1 location owners meet quarterly and annually. The annual meeting is a big two-day event, often held in scenic Lake Geneva, Wis. Training, customer satisfaction and shop efficiencies are regular topics. For example, a meeting might include specialized training on collision-related model updates, damage analysis or reducing cycle time. “We try to keep training on the leading edge to help our shops operate smarter and more efficiently,” Keller says.
Annual meetings often feature nationally known speakers, who fly in from around the country. “We’ve had sessions on LEAN concepts and implementing them,” Keller says. “We had a national relations manager for DuPont give a ‘state of the industry’ for a couple of hours with a global perspective, complete with specific examples and statistics, of what’s happening in the insurance and collision world.”
Hands-on learning. Many CRASH1 meetings are held at Bill Wynkoop’s shop, CRASH1 of Perryville in Rockford, Ill., which has earned industry accolades for its curb appeal. The 28,000-square-foot shop is an inspiration to the shop owners in the network, Keller says, because of the efficiencies designed into the space. “Every body stall has a hoist in it, and water, electric and air are pumped into each so a guy doesn’t have to chase around for extension cords, air lines or water,” Keller says. “In the double-wide spray both, the refinish tech can spray two cars at a time instead of one. Everyone learns a lot from that shop.”
Camaraderie promotes growth. Palermo likes the positive effect the CRASH1 training programs have on his staff. “I can preach to my staff about how I want things done, and they believe in it,” he says. “We won a staff award last year for CSI, so they get what drives the bus.” But going to meetings and hearing from someone else is always a more powerful motivator, he says. “If you’re a smaller shop and you’re struggling, and your employees see what another one like you has gone through and where it’s at, they see that it can be done.”
Gelting says the CRASH1 programs and its dedication to regular location communication have made all the difference for his business. Gelting is opening a second, 4,500-square-foot, auto body shop this spring in Watertown, Wis. “We wouldn’t be opening up this second shop without these cutting-edge programs,” he says. “Networking with the other shops is my favorite thing, because we wouldn’t have been able to come up with all the ideas (ourselves) to grow and expand.”
There’s nothing in the collision business that a CRASH1 location hasn’t seen, Palermo says. That in itself is highly valuable, he says. But trust elevates the value of CRASH1 even further in his eyes. “I just had one of our other shops refer a customer to us this year when that customer moved into our area,” Palermo says. “They sent me the claim and the whole thing. That’s a great feeling, knowing that they felt they could rely on us. We know the philosophy is the same.”