Gene Crozat’s Opulent Shops
It was the air force that actually got me started in auto and body repair. I joined up in 1961, and by chance they put me in the auto repair training section in Merced, California. I was there for three years, and, nights and weekends, I worked for a place called Rich’s Auto Body, near where I’d grown up in Santa Rosa. After that, I opened and ran a Chrysler dealership that had autobody service.
In 1968, after selling my dealership, I went to work for a Chevy dealer as an auto painter, and in 1972, I opened my first store in Santa Rosa, calling it Gassel and Crozat, since it was a partnership between me and a guy named Leo Gassel, who’d been a blacksmith in Michigan.
I know that sounds kind of wild, but he’d really been a blacksmith, and when they got rid of buggies, he started working on cars. He’d been a commission body man in Los Angeles when I met him, and I’d never run across anyone who was doing body work on commission like that—I’d never seen anybody work so fast with such good craftsmanship, either. Immediately, I could see the sense in that strategy. You have heard it said that commission is bad because you get sloppy body work. Not true—on commission, when you screw a job up, you fix it out of your own pocket, not the store’s, and that’s a big incentive to work fast and do the job right.
Gassel retired a little while later, so I took over the store and changed its name to G&C AutoBody. We now have two stores in San Rafael: one in Petaluma, about 20 miles north; and our largest store—35,000 square feet—in Santa Rosa is approximately four acres of body and paint shop. We are preparing to build this winter, adding 21,000 square feet in Santa Rosa and another new 15,000-square-foot store about 20 miles north in Windsor.
FIGHTING FOR INDEPENDENCE
Not only are all of our technicians commission, they are also almost all independent contractors. You don’t pay them time and half for overtime, no workers comp, no employer taxes, etc.—it even affects the rates you pay for your garage keepers insurance. Most shops are open from 8 a.m. to 5 p.m. because to operate beyond those hours and pay time and a half is cost-prohibitive. But I’ve found that you just can’t make a reasonable profit in eight hours per day, so our stores are open approximately 14 hours per day, and they’re open on Saturdays. Having independent contractors helps us do that. Our technicians get 40 percent of the labor, and the house gets 60 percent, and when it’s a DRP job, they get 40 percent of any lower labor rate, which allows us to have DRP arrangements without hurting us because we are not paying the technician the top-dollar rate on one hand while on the other hand discounting the labor rate to the insurance company.
If you have independent contractors, you may get resistance from the state because it is a great deal for both the technician and the shop. G&C was in a five-year fight with the Employment Development Department in California as to the legality of using independent contractors. Needless to say, we beat the state, and if we can ever help anybody regarding independent contractors, we would be more than happy to do that. We seem to be doing very well, and I think it’s because of this model. It’s also this model that has helped us grow and allows us to have such a big place. We average about $1.5 million a month at our current stores.
Another thing that’s really distinctive about our shops is that they’re more like spas; they would put any lobby in Las Vegas to shame, and that’s because I realized early on that many, if not most, people who bring cars in for repair are women. And they don’t want to walk into some waiting area that’s full of grease and old magazines and maybe some stale coffee, and listen to the mechanics cracking jokes with each other. That’s not a place that they’re going to want to sit and wait, and it’s definitely not going to bring them back.
If a woman walks into one of my lobbies, we want her to feel like she just walked into the Waldorf. We want her to see that we’re serious about service and about making her feel comfortable. That’s one of the reasons that half my counter staff is women, and the women who work here know what they’re talking about in terms of repair, and they’re excellent with customer service. Many of our customers really like that.
The feeling of the space is also attractive. My lobby in the Santa Rosa shop is 3,000 square feet and generally stays pretty full. It seems like a huge lobby, but on Friday afternoons, there are sometimes 20 people in that lobby. Also, because we have independent contractors, we have people working here from 6 a.m. to 11 p.m., which is also appealing to customers.
We also have a service center in our Santa Rosa store where we service, lube, oil, filter and do alignments for our customers for free for as long as they own the car. Every couple of months, it brings our customers back to our store and keeps strong relations with our customer base.
Two of the biggest problems in the industry today are capping and steering—capping labor rates, capping paint materials and steering your customers away from your business. In California, many insurance companies will tell their insureds and claimants, “You can go where you want to repair your car, but if you choose to go to G&C AutoBody, their rate is higher than we are willing to pay, and you will have to pay the difference out of your pocket.” I would say eight out of 10 jobs are steered away from shops by that method—which is steering.
You may ask me how I counter that. Well, we spend approximately $35,000 per month in radio and TV advertising. We advertise insurance-deductible rebates of up to $500 off your deductible. We also have approximately 80 to 100 replacement rental vehicles—all makes and models. We advertise that if you get your car repaired at G&C AutoBody and you choose to use a G&C rental car, we will rebate you one half of the rental bill. So, basically, the customer is getting paid to drive our car, while we get the advertising benefit of having our cars driving all over Northern California with our name and logo on the doors. Some people are probably paying $400 to $600 per month for advertising on local public-transportation buses, but about 80 of my customers per day are driving around Northern California, doing it for me for free. You need to think out of the box.
Today, your biggest competitors are the insurance companies. They see the value of advertising and are willing to spend a lot of money on it, and their advertisements encourage your customers to leave the repair up to the insurance company—“Just leave it here, and we will handle it for you.” But you are not seeing advertising from other body shops. To give you an idea of our advertising spin, one of our ads goes something like this: “If your insurance company didn’t recommend G&C AutoBody, all it means is that we probably don’t have a deal with that insurance company—we have deals with many insurance companies but not all of them. Insurance companies make wholesale arrangements with body shops, and they receive large concessions of labor rate discounts, free towing and storage, etc. And there is nothing wrong with that; it’s good business: Basically they sell your name to that body shop for these concessions. G&C AutoBody is just offering you the deal that we would have offered them. So if you go to G&C AutoBody and make arrangements in writing prior to repairs, we’ll not only give you a top repair job guaranteed for 100 years or until you sell your car, but we will also give you up to $500 off your deductible for coming to G&C Autobody.”
DRPS AND STICKING TOGETHER
Another big issue, of course, is DRPs, and since our contractors agree to make their commission based on an estimate, if a DRP rate is $15 below street rate, they share in that, so we can honor the DRP rate and not lose. I would advise people to make good DRP arrangements where you can. There are good ones, and I have some good partnerships, but I don’t rely on them to carry my business. Body shops need to realize that this business is personal. They have to know their customers. They have to get up in the morning and have a passion for what they are doing.
And don’t be afraid to sue, either. If a shop doesn’t have a DRP with an insurance company, for example, I’ve found that the insurer will often steer people away from that shop. Right now, I’m in a big lawsuit with one insurance company for steering and capping; I just saw that they weren’t going to stop those practices, and I’d encourage any body shop to do the same. Shops that aren’t paid what they deserve need to think about taking insurance companies to small claims court. In some states, you can’t sue the insurance company, directly—you have to have the customer take them to court instead—and, in that case, I would offer to be a witness for the customer. I go to court regularly when insurance companies attempt to shove an unreasonable bill down a claimant’s throat or mine. We don’t automatically accept an insurer coming in and saying, “We don’t pay for that.” I look out for the claimant’s interest.
I think the most important advice I’d have is that we have to stick together. This is a time in the industry where you don’t want other shops as enemies. We all need to think out of the box and hustle for our business. If we don’t get innovative, we won’t stay in business. If you think body shops are going to stay around in the form that you see them now forever, you are wrong.