Call it job security for the runners: although the body shop at Paul Miller BMW gets about 90 percent of its work through the Paul Miller Auto Group in Wayne, New Jersey, it’s not only five miles away, it’s actually in a neighboring town. The distance between the shop and the dealership group wasn’t an idea out of an innovative management handbook. Instead, it was the result of town rules.
“It’s really tough, actually, to find a town in New Jersey that will let you build a shop, because everyone seems to think they’re toxic waste dumps,” says body shop manager Al Grazioli. “So, you have to find a grandfathered shop, and one of the closer ones was five miles away. I think the town of Wayne doesn’t even allow these kind of shops.”
So in 2001, the shop moved to Pompton Lakes—and the logistics haven’t been as tough as some might think. The dealership already employed a number of runners to drive their body shop customers to work and home, so the added component of bringing the car from the dealership to the shop “wasn’t a big deal,” Grazioli says. In fact, the distance has helped keep operations running smoothly, a task Grazioli has been perfecting for the last 25 years.
Much like many car enthusiasts, Grazioli started to tinker with autos when he was in high school, and he attended vocational school to learn how to be a mechanic. “I’ve always had a love for cars, and when I was 16, I started detailing cars after school,” he says. He worked his way up the ranks quickly, becoming a painter, estimator, parts manager, and finally a general manager of a body shop in the early 1990s. He’s been at Paul Miller since 2003, arriving shortly after the body shop moved.
Today, the body shop at Paul Miller BMW is facing the same challenging economic times as others, but it’s thriving rather than sputtering. Here’s a glimpse at some of the top reasons this independent-minded shop is smooth and successful.
Reined-in receivables, tighter teams
When Grazioli signed on at Paul Miller BMW, he found that the shop was faltering, and badly. It needed to be turned around quickly, and he decided that the problem was in receivables. The shop didn’t ask its customers for full payment, and waited instead for insurers to compensate them for the work. The system created long gaps between completed projects and payment checks.
“A lot of shops wait for money, so we got that out of the way,” he says. They put a program in place that required full payment once a job was completed. “It’s amazing,” he recalls, “how fast insurance companies get the money to customers when it’s them waiting and not the body shop.”
He also trimmed down on the number of employees, but not as a way to cut expenses. Instead, he saw it as an opportunity to improve overall productivity and efficiency. “We got rid of the ‘cruisers,’“ he notes, “those guys who just sit around waiting for work.” The team now is a solid unit, he says, and if their job is done, they’ll help others, making the shop into more of a group effort.
Those two actions, changing receivables and giving the pink slip to a few technicians, was just the strategy shift the shop needed and it’s still helping the business today.
Formalized sales and shop relationships
An on-site dealer body shop usually has a different relationship with car salespeople, Grazioli believes.
“If you’re a body shop on-site, you might have a salesman say, ‘Mrs. Jones is going today, can you do this fast while she’s waiting?’ and that just messes with the schedule,” he says. “The distance alleviates that. You can do it the right way, instead of just right away.”
Sales treats the body shop as part of the dealership group, but because of the physical distance, it’s seen as more of a separate entity than a department. Grazioli thinks that’s a huge reason that the relationship between the two teams works so well.
There’s a formal process, he notes, that requires scheduling and written requests. Mrs. Jones may not be able to get her car turned around immediately, but Grazioli has found that customers are often fine with waiting a few days. “People don’t like to be lied to,” he says. “A shop might say they’ll have it in a couple hours, and it turns out they need another day. That’s what customers hate, because they feel like they’ve been deceived.”
The formal arrangement also keeps body shop schedules more streamlined and efficient, he says, and keeps technicians from burning out. Too many rush jobs tend to force technicians to “run on the ragged edge,” Grazioli has noticed. The more organized the system, the better things go for everyone.
Dominant dealership focus
The shop does some nondealership work since it specializes in high-end vehicles that include Rolls-Royce, Porsche, Bentley and Audi. But the majority of its customer base comes from Paul Miller, and Grazioli believes that the system works because it allows the shop to turn around dealership jobs quickly, and creates consistency for customers.
“It’s all about customer retention,” he says. “The dealership wants a shop that takes care of its cars, and that makes sense, because you know what to expect. The customer knows what to expect.”
No DRPs, not now and not ever
There wasn’t any kind of traumatic incident in which Grazioli was chased by a crazy DRP and now flinches at the mere mention of the term. However, don’t expect a DRP in place at his shop as long as his name is on the manager’s office.
“They just don’t work for us,” he says. “I don’t want to be controlled. There are a lot of programs, and I’m sure there are some good ones, but the ones we’ve found want us to cut corners, like putting in aftermarket parts, and that’s just not going to happen.”
In some cases, the use of those kinds of parts would conflict with the agreements that the shop has with car manufacturers. For example, BMW and Bentley don’t allow used components to be installed in repairs.
“We follow manufacturer guidelines, the way they want it to be done. To do anything else just seems like too much of a nightmare,” Grazioli says. But that doesn’t mean insurance companies get huffy when he talks to him.
Grazioli notes that when it’s “presented intelligently,” most companies are understanding. He still doesn’t do what they might ask, of course, but at least they know that up front.
A good niche
There are plenty of body shops in the area, but Grazioli doesn’t fret about another shop luring away customers. Because of its dealership relationship, there’s a steady amount of work, and the focus on high-end cars also helps. The shop is the only BMW-certified collision repair center in North New Jersey, and it’s established a reputation for quality work done on the types of cars sold by Paul Miller.
“If you have a Porsche, a BMW, or a Range Rover, this is where you bring it,” Grazioli says. “There are very few shops in the state that can cater to those, so we have kind of a niche.”
Protected against the economic slowdown
Car dealerships across the nation may be feeling the effects of a softening economy—and turbulence from U.S. automakers certainly doesn’t help. But Grazioli doesn’t watch the news with a sense of anxiety. If anything, the slowdown might actually help the shop, he believes.
“If you have a gentleman that drives a $120,000 car, he’s not going to turn around and buy a $20,000 car in order to economize,” says Grazioli. “He might take it down a notch or two, though.” For example, someone driving a BMW 7 Series may downshift to a BMW 5 Series, which might make a difference in the dealership’s bottom line, but not the body shop’s.
Grazioli expects, too, that more people will hang on to their cars for longer and put more money into repairing them rather than buying new. “Basically, people with higher end cars can’t get rid of them now, because of the economy,” he says. “So, instead, they’re maintaining them for longer than they might have during a great economy.”
The “disposable era” has come to a halt, he thinks, and that’s good news for every type of body shop: “Sales might be off at dealerships, but service departments will start picking up.”
Another protection is that the shop runs “lean and mean,” Grazioli adds. Body shop margins are notoriously thin, and his shop is no exception. So, as other types of businesses in the area are trying to figure out ways to cut expenses, increase operational efficiency and retain customers, the Paul Miller collision shop can just draw on its expertise, Grazioli says, since they’ve been doing all of those things from the start.
Quality crew
When Grazioli notes that the shop runs lean, he’s not kidding. Within 8,000 square feet are five body technicians, two painters, a parts manager, a detailer, an assistant and the manager himself.
Doing repairs with just 11 employees can be challenging, but Grazioli isn’t looking to expand anytime soon. He’s pondering the next level—now it’s finding a bigger building—but significant staff increases aren’t part of that strategy.
Keeping staff numbers below a dozen has helped to increase retention, he believes. Most of the employees have been with the shop for at least 15 years, and Grazioli attributes that to the shop’s family atmosphere.
“Everyone works together,” he says. “One guy will help another, so we’re all on the same team.”
When an employee does leave, Grazioli hires someone new based on how that person “clicks” with current employees: “A lot of it is chemistry. Can they work toward the same goal? Do they love cars, and can that passion be nurtured? The fact is, you can be the greatest manager in the world, but your skills will be wasted if you don’t have the right employees. And, fortunately, I have a wonderful staff.”
