Forming Shop Partnerships to Keep Pace with Repair Technology
It’s safe to say that a potential collision isn’t at the forefront of most people’s minds when they purchase a new car. Most buyers are calculating costs and admiring shiny paint jobs. But when someone has a wreck, Todd Stadler, body shop manager of Luther Collision & Glass in Hopkins, Minn., knows that where the consumer bought their car plays a huge part in where they go for a repair.
“Luther dealerships have customers that have been with them for years,” he says. “Vehicle buyers trust the place they bought their car. After a collision, it’s often the sales associate they’ve known for 15 or 20 years that they call for a shop recommendation.” And when the car is a new model, it becomes even more important to customers to find a shop that has the technology to do the repairs right, meeting OEM standards and keeping warranties intact.
Luther Collision & Glass does all that and more to capitalize on the dealership connection. Namely, they keep technology at the forefront. By consolidating its five collision centers, the group has taken advantage of the close relationship Minnesotans have with the Luther dealerships, and Stadler’s shop—located in the Luther Hopkins Honda—has become an example of what the newly formed group is doing right. It’s not just the massive investment in updated facilities and new equipment that’s boosting sales by up to 7 percent this year, even in a soft market—although that helps. Rather, it’s the way the collision centers partner with the Luther dealerships to educate customers and get them back through the body shop doors when they’re in need of a repair.
The Technology Challenge
Anyone who lives in the Land of 10,000 Lakes knows the name “Luther.” The company is a major player in the Minnesota auto market, with 26 dealerships throughout the state. (They also have several locations in Fargo, North Dakota, and Hudson, Wis.) Before the consolidation, Luther’s five collision repair facilities worked in harmony, but operations weren’t synched up—training, procedures and day-to-day operations were handled independently. The consolidation left the shops physically independent, but operations are now under the Luther Collision & Glass umbrella.
The Hopkins repair shop was built from the ground up five years ago when Luther decided to move its Honda dealership to a busier stretch of road in the Twin Cities suburb of Hopkins. “The old building was off-site in an old little dark dungeon,” Stadler says, only half joking. “When they rebuilt, they knew they needed a bigger shop,” he says.
—Todd Stadler, body shop manager of Luther Collision & Glass Hopkins location
The new facility measures 16,000 square feet and now employs 22 people who handle between 225 and 250 cars a month. But size isn’t everything. In fact, much of the shop’s success can be attributed to what’s inside the structure. At the time of the consolidation, the then-general manager (Stadler was not yet with the company) made a decision that would reap benefits for years to come: He prioritized the acquisition of updated equipment. When Stadler came aboard, he took that philosophy and ran with it, making sure his shop kept pace with the demands of newer car repairs. “Since I’ve been here, we’ve added quite a bit more new equipment and remodeling just to meet the standards of the OEM repairs that need to happen nowadays,” he says.
Steve Weisenberger has been the director of Luther Collision & Glass since the beginning of the consolidation in 2005, and he says the heavy investment in equipment was a calculated risk. “The hybrids were coming,” he says. “Cars were evolving with new technology and different materials. We made a conscious decision to upgrade and improve the facilities.”
Things are changing very rapidly in the industry, he says. “The Chevy Volt is on the horizon, Honda has a prototype with hydrogen, and recently Volkswagen added a new OEM program with a lot of strict requirements on welding. Some of these pieces of equipment are quite expensive, and we’ve had to make a lot of long-term adjustments to be able to handle those cars.”
However, he says, the alternative is providing subpar service, or worse, unsafe repairs. “Not everyone is going to be able to do these complicated repairs,” he says, “so we’ve chosen to get into the game and make sure we’re properly trained and equipped.” (For more on current repair standards, check out our January 2011 Q&A with Susanna Gotsch, of CCC at fenderbender.com/Susanna-Gotsch.)
Keeping Pace with Technology
Because Luther Hopkins services so many recent-model-year vehicles—”We fix more new and almost-new cars than most places out there,” Stadler says—the need for cutting-edge technology is even greater. So what have they invested in?
Frame Upgrade. “One of the biggest additions that we’ve made in the last four years is updated frame equipment,” Stadler says. Perhaps his most prized acquisition to date is his Blackhawk Power-Pro 3000 frame rack. “It’s one of the best frame racks out there for pulling any type of vehicle,” he says.
Another worthwhile investment? Two Blackhawk Shark measuring systems that use sonar to measure vehicle frames. Stadler has also acquired new squeeze-type resistance welders for his operation. “They’re becoming required more and more for replacement technology,” he explains. “Plug welds and MIG welds are just not accepted in certain types of applications anymore.”
Prepared to Paint. As environmental restrictions loom, the five repair centers have begun a complete overhaul of their booths. “Our Brooklyn Park store upgraded three years ago, our Plymouth store has new paint booth equipment, and our Hopkins store is in the process of being upgraded,” he says. “We’re ready to switch to waterborne when the time is right.”
All the Latest Data. To guide the shops as they move into the future, Luther Collision & Glass has turned to a computerized data management system called Collision ARS & CollisionConnect from ALLDATA. “I think having information at your fingertips is important,” Stadler says. “Having information that links directly to most OEM manufacturers is a major advantage. Our technicians aren’t guessing anymore. The generic guidelines that used to be out there for repairing vehicles no longer apply in most cases. You have to be OEM-specific just for liability and the safety concerns.”
To ensure their staff interprets the information they get online correctly, the group has hired an independent third-party contractor called VeriFacts Automotive to come once a month to inspect operations and certify their quality. The inspector gives management a detailed report on what he sees in the facility, and, if needed, provides training on the spot.
Bringing in Dealership Customers
An updated shop is important, but there’s also the not-so-small matter of attracting customers. Here again, the consolidation has been a game-changer, allowing all five shops to form stronger relationships with the 26 Luther dealerships in the state.
Compelling Marketing. Now that the shops are unified, the company is able to brand the five collision centers as one, bringing their image and customer service under one umbrella and making it easier to promote themselves within the dealerships, says Weisenberger. They’ve put more resources into their website, and given their personnel training to help them present a unified image.
The shops now pool their marketing budget to create pamphlets and signage in the dealerships, better capturing the value of being in front of so many eyeballs. The pamphlets may be small, but they carry targeted information. The group puts out five of them, with subjects ranging from “10 Advantages to Using a Luther Shop” to a “Know Your Rights” brochure that explains that customers have the right to select the collision shop of their choosing. Another runs down all the services—glass, paintless dent removal, wheels, touch-up and more—that the group offers.
As for television and radio, well, they don’t use them much, Stadler says. “We don’t need to, really. We market directly through our dealerships.” There’s no question the approach has been profitable. “We’ve done well as a group,” he says. “We’ve been up anywhere from 3 to 7 percent, even with the declining market out there.”
New Car Clinics. One way the Luther team is trying to expose dealership customers to the collision centers is through new-car clinics. These gatherings for new-car owners let Luther employees educate customers about their cars, the dealership itself, and services like the collision and glass division. “When you buy a car,” says Weisenberger, “there’s so much to go through with all the paperwork, all of the options—it’s a bit overwhelming. At the car clinics, the consumer is in a better frame of mind.”
Excellent Technicians. And once drivers are in the door, they can expect top-of-the-line technicians, thanks to an increased emphasis on training and certification designed to draw in dealership customers. All five shops are certified I-CAR Gold Class Professionals, and the Plymouth store recently became Jaguar certified—a real draw in a part of the country where very few shops are able to perform repairs on the high-end brand.
Finding Strength in Unity
So is it worth trading autonomy for higher sales? Stadler thinks so. “I’ve been with independent shops before, and I think corporate structure can be good as long as it’s not overbearing,” he says. He credits Luther’s management for allowing each shop to chart its own course. “We have enough freedom to run our facilities the way that we feel is right for our customers as long as we work under the umbrella of the guidelines that are set up for us,” he says. “And I don’t think there are too many.”
Stadler goes even further: “It’s been not just the consolidation, but also the effort and the time put into changing the vision of what a dealership body shop can be. Luther has made a very focused effort to make sure that we’re doing things to [our brand] standards, not just an ‘industry standard.’”
Working closely with the dealerships has been the best way to achieve this, he says. “That’s the main reason for our growth staying consistent, and [for] the consumer loyalty. We try to give our customers the best service and product possible.”