A potential crisis is looming, Scott Biggs says. Shops need to understand the technical complexities of vehicles coming down the road. In about five to 10 years, facilities that haven’t kept up with rapidly advancing automotive technology will be in trouble.
Biggs is CEO of the Assured Performance Network (APN), which recently announced a new shop certification program. The program—in which 1,500 to 2,000 shops will be certified by year’s end—will set high standards for a shop’s repair practices, training requirements and business activities, readying repairers to fix even the most complicated vehicles. It will lend a new kind of credibility to shops, and it will create rebates so shops don’t have to pay to be certified.
Biggs launched APN in 2004, knowing this would be an eventual goal.
“It’s not something we decided to do overnight,” he says. “It’s literally been decades in the making.
Biggs recently spoke with FenderBender about the new program and how he hopes it will change the industry.
How did the certification program begin?
When we built APN and founded it in 2004, we built it on the foundation that some day we would be able to help these shops identify and be identified for what they are. There are a lot of shops that do all the right things—they invest in equipment, they invest in their employees, they invest in training, they have all the right everything. But unfortunately, they’re paying the same door rate, and they’re identified as body shops just like everybody else—even those that don’t make the same investments. That’s a fundamental flaw, and we built our co-op into a stratus where we could identify such shops. We literally founded APN on establishing which shops could meet those standards. Then it was a matter of, how do we make this affordable, and how do we open this up to everybody else?
What will shops need in order to get this certification?
That’s the best part of the story, in my opinion. We spent a long time, through the 1990s, identifying what we call the collision business of the year. We set standards to show what makes one business better than the rest, and the minimum requirements. During a 15-year period of time, we identified the best practices and minimum requirements. We of course compared that with what others do in the industry, especially technical practices.
The cars have advanced, and as the regulatory requirements have advanced, some of those requirements have changed. The I-CAR training has evolved with it as well. All along the way, we built on that original foundation, and kept improving it and refining it, and testing it in the market if you will. So we set out in 2006 with those criteria in mind, and we said, ‘OK, there’s best practices, and there are real requirements. We didn’t want it to be filled with cosmetic gimmicks. We wanted it to be totally fundamental – only those things that were required to provide the customer with that white-glove treatment, and to make sure that repair business had everything that they needed to repair that vehicle back to manufacturer specifications.
When we first started the company, we needed a method to build this machine without it costing shops a lot of money. We set out to say, “What if we give rebates from manufacturers from shops who can be best in class?” So we set up rebates with companies so shops can make money for being best in class. In 2006, we said, “OK, it’s now time to identify best-in-class shops everywhere.” That’s when we started our big push. We literally spent between 2007, 2008 and part of 2009, identifying the top 3,500 shops in the country. That was an enormous undertaking. The next process was to build up financial reward funds so that they have these rebate funds in their accounts. Ultimately, we didn’t want certification or the road to certification to cost our shops anything. This gave the shops a funding mechanism.
By 2011, we had literally thousands of shops that had built up positive reward funds that could more than offset the cost for them to actually get certified. Then we went a step further by physically going out and had someone inspect the facility and insure they have everything. The idea was to have a higher level of credibility.
How is the industry reacting?
We’ve had overwhelming support. Already we’ve had several companies that have reached out to us and said they want to participate. So we will actually be having one shop get certified, and they’ll actually have at least four different organizations that will be recognizing their certification. And the original equipment manufacturers will be announced individually as they come on board.
What are the benefits of getting certified, and how can shops do it?
We’ve spent years developing an online process that makes it very efficient for a shop to apply, fill out the questionnaire, upload proof of how they comply with all these requirements, and apply for a physical on-site inspection. Once they pass all of that they move on to promote their business.
Somewhere along the way if they don’t have everything it takes, we’ve actually built in a business development process. This lets them see where they are compared with where they need to be. And then that lays out a plan for them in how they can improve their business. We even took this concept to I-CAR, and I-CAR has developed a program now called Road to Gold, which is the methodology or a training plan that shops can follow to get their shops to the Gold Class status. It is literally a business improvement plan, which includes purchase of equipment, training that’s necessary, and every other element. They have a method and a plan to get there if they’re not there already. We want to lead the shops through the process, to the end zone, which is to get the certification.
Once the shop is actually certified, they’re able to take advantage of more co-op rebate programs that are open to them as a certified shop. So financially it pays. It also can’t be a well-kept secret because otherwise it doesn’t do them any good. So we give them a complete set of marketing and promotional tools that they can use to reach out to their customers, educate their customers, and promote and market their business and certification.
How much does it cost?
It really will never cost a shop any out-of-pocket money. However, there are a couple of things we’ve done. Because we got all these organizations to collectively participate, they’re subsidizing up to 60 percent of the cost of the program.
That combined with the fact that we’re using economies of scale, and our non-profit administrative capacity to keep the price down, if the shop was a full-blown package, it could be anywhere between $500 and $2,000 of out-of-pocket costs, compared to the real cost of the program, which is $5,000-$6,000. But again, it’s being subsidized by $3,000 or more by all the participating companies, as well as using the economies of scale to get the cost down to next to nothing.
Here’s the key: all of our members and those shops wanting to participate will be able to generate rebates that will far exceed the few hundred or several hundred dollars the certification costs out of pocket. So ultimately, it won’t cost them anything out of pocket, and they’ll actually make money on it.
What kind of rebates will shops get?
We have rebates that several of the car manufacturers get when shops repair using 100 percent OE collision repair parts. They actually get a 5 percent rebate back from the manufacturer, through the co-op. So the more often a body shop fixes or repairs a vehicle using 100 percent OEM parts, they actually then get a financial reward for doing the right thing in the first place. That 5 percent—across most of the big six brands—adds up to a lot. That more than offsets any cost of the certification.
There are a couple of other things that are really innovative about the program. When shops repair a car using 100 percent OEM parts, they also can provide the customer with a certificate of authenticity that that car was repaired using 100 percent new, OEM collision repair parts. That’s huge for a consumer to have the certificate, which they get to keep. With the customer’s permission, the shop can report that to Carfax that the car was repaired using 100 percent OEM new collision repair parts. These are huge elements the shop can have to be in a league of their own.
How do you think this is going to change the industry?
It is our vision that two things will happen:
One, consumers will finally be able to have a choice, a certified choice, a choice of a repairer who can return their vehicle back to manufacturer’s specifications and assure the safety, the fit, the durability and the value of their vehicle. That’s critical.
Number two, when consumers have that choice, they’ll make that choice, which starts to ensure that instead of consumers being steered to low-cost providers that put on imitation parts that devalue their repair or the vehicle, consumers will have a superior choice. Then it puts pressure on everybody else to put the consumer back in the first slot, so that quality and safety are important in the future.