Reinventing with Bold Management Decisions
When Ben Nolan, joined the body shop at Robberson Ford Lincoln Mercury Mazda as an estimator in 1999, it was in sad shape. The 2,500-square-foot space was dark and dingy, had minimal and antiquated equipment—old cross-flow booths, and no frame measuring equipment to speak of—and high staff turnover. “It was 15 years behind the times,” Nolan says. Whereas the rest of the Bend, Ore.-based dealership was progressive, with a service department that was open until midnight, a large parts department and excellent sales, “the body shop was just lacking,” Nolan says. The dealership’s owners knew it, too. “The industry had moved forward and we hadn’t kept up,” admits Jeff Robberson, the dealership’s president. It was time to make a tough decision: revamp big-time in order to compete—or concede and close the shop’s doors.
That dilemma is one that dealerships face now more than ever, says Butch Hollister, a National Automobile Dealers Association 20 Group consultant. NADA has about 160 of the 20 Groups, which bring dealers in noncompeting markets together to share information and discuss issues just like the one Robberson faced. “Many dealers are not sure whether it’s worth the investment,” Hollister says. Indeed, according to a recent NADA report, only 36 percent of new-car dealerships had body shops in 2008.
The Robberson family made a bold decision: Rather than close down the body shop, they opted to invest in shaping it up for the future, starting by promoting Nolan to shop manager. Ten years later, the Robbersons’ investments have come to fruition. With the addition of a new 14,000-square-foot facility, state-of-the-art equipment and techniques (the shop began spraying waterborne paint two years ago), a top-notch staff and a diversified business plan that includes custom work, the shop has grown to become the largest collision repair facility in central Oregon.
A Man and a Plan
For Robberson, there were two main considerations in making the decision to keep the collision center open. The first related to his business philosophy. “This dealership has always been a full-service dealership,” he says. That in itself can be a competitive advantage, says Paul Massie, Powertrain and Collision Product Marketing Manager for Ford Motor Co. Having a state-of-the-art, best-in-class body shop “is a true benefit to the dealership,” Massie says. “It offers the dealership a tremendous advantage in retaining customers for life.” (While Ford doesn’t have an official policy or operating standards for its dealerships regarding body shops, it does suggest the names of independent consultants to dealerships that come to the company looking for guidance with a struggling shop. “The body shop is a very complex business,” Massie says, “and we found that it works better when we send in consultants who specialize in that area … rather than being prescriptive.”)
The second consideration was the financial reality of revamping the shop. Did it even make sense to stay in the collision repair business? Nolan showed him that the answer was yes. At Robberson’s request, Nolan developed a business plan, including a 10-year projection, and estimated costs for building a new facility. “A very key part of our decision in building a new body shop was [the fact that] we were unable to produce the quality out of the existing facility, and if I wasn’t able to get quality, I didn’t want to be in the business,” Robberson says. “That mandated a huge investment.” Robberson ultimately spent $1.3 million on the new facility and another $300,000 on equipment.
Nolan also took Robberson to several other area body shops and facilities, showing him that in order for the shop to make a profit, it needed the right tools.
Given the chance to build his dream facility just a half-mile down the road from the dealership, Nolan set to work, designing a shop to eliminate bottlenecks. To equip the facility, he went to different paint jobbers and put it out for bid; he ultimately chose Automotive Paint Specialties (APS). The PPG distributor recommended the equipment: two Nova Verta downdraft prep stations, a 30-foot downdraft Nova Verta booth, two Blackhawk frame racks on each side of the body shop to enable easy access, and a computerized frame measuring system by Shark. “It gave us the most state-of-the-art facility in central Oregon,” he says.
Using conservative numbers, Nolan had estimated that the new body shop would break even in two-and-a-half years. In fact, it turned a profit after just 18 months. In 1999, the body shop brought in $850,000 in revenues; last year it earned $2.4 million.
The Right Staff
Improving the quality of Robberson’s collision repair shop started with the staff—and that began with Nolan. “Ben came to us with a lot of experience from a much larger organization, where he’d overseen a number of other body shops,” Robberson says. “He brought to us a wealth of experience that we didn’t have … and he assembled a team of techs that was a huge step up from what we’d had before.”
Thanks to his former employer, Nolan also had experience in the building, opening and staffing of new facilities. He got to work on staffing even before the facility was built, hiring a body technician, Brian Osbon, with whom he’d worked for 20 years. “That was crucial—having someone out there who understands what I expect, what my definition of quality or customer service is. He was the first guy I brought on, and was a huge part of us growing so successfully,” says Nolan, who also hired three more body techs and a paint tech. Today, the shop employs 12 people, all Nolan’s hires.
A Bold Business Plan
In Nolan’s view, part of the problem with staffing the body shop came from the seasonal nature of collision repair in the area. “Winters were very busy and that was it,” he says. “People used hope as a strategy—hope the weather was bad.”
In order to ensure that the new shop, which opened in March 2001 as Robberson Collision Center, stayed busy and retained top talent, Nolan devised a business strategy heavy on diversification. The shop pursued large fleet accounts and began custom-painting BMC choppers (roughly 40 per month) and working on fuselages for Cessna airplanes (about eight per month). That strategy helped allay fears about getting enough work to justify the investment in the new shop, and it’s one that Jeff Robberson would recommend to shops that are in the same compete-or-concede mode today: “With collision repairs down nationwide, you really need to know, is there a capacity in your market to do enough business to make this financially solvent?” he says. “What made me comfortable was, when there wasn’t enough collision work Ben found other things [to do].” In fact, Nolan estimates that 45 percent of the shop’s business came from fleet and custom work in those early years.
“Custom work is a good way to get the word out, and it was a good stepping stone for us,” Nolan says. “We were able to build our own loyal customer base without relying on insurance companies to do it for us. It was the best marketing we could have done. But we didn’t allow it to affect our core business, which is collision repair.”
Jeff Robberson puts it this way: “Here’s our business model: Build [the shop] on quality and reputation, and not by signing up as a DRP for every insurance company out there. That was a scary way to go; it was a lot slower way to build a business. But then [the insurance companies] come to you and want you to be a DRP. It was a gutsy move on Ben’s part and required patience on my part, but in retrospect it was a great way to build the business.”
Indeed, moving the collision repair shop off-site (and marketing it as an all-makes, all-models body shop) helped contribute to the overall growth of the dealership: The body shop’s revenues started to grow, and the old shop space was turned over to the service department, enabling the land-locked dealership to expand.
Today, Cessna has moved out of the area, and custom work represents just 5 percent of Robberson Collision’s revenue. But the shop still looks for ways to keep an edge. Most recently, it switched to spraying waterborne paint.
It also offers continuing education to local insurance agents, both online and in the facility, through a company called Fifth Gear, and hosts I-CAR classes. “The more exposure we can get, the better,” Nolan says. “Our slogan is, ‘Come See The Difference’ and there definitely is a difference in our facility than others in our area.”
While Nolan does see opportunities for future growth, both in terms of an expected consolidation of competitors and by focusing more on internal work, his plan for the next two years is to “sustain where we are right now. We definitely have the room to grow, it’s just a matter of the economy.”
And while Jeff Robberson had some initial worries about the gamble he took—one that was shared by some of his friends in the industry—the response from customers has been positive. “Even people who drive competitive brands [have been] impressed with the quality work we do,” he says, “and it spills over to the dealership. Someone who had never done business with our organization before recently had a collision, had a fantastic experience [with the shop], and said, ‘If the rest of your organization treats people the same way, I want to buy a car for my wife from you.”
Thanks to experiences like that, Robberson has no regrets about his decision to compete in the collision repair business. Well, maybe one. “The only thing I’d do differently,” he says with a laugh, “is name it Ben’s Body Shop.”