Building a Dynamite Dealership-Shop
JMK Autobody opened in 1965 as a small, independent mechanical shop, and six years later was transformed into a dealership called JMK Auto Sales. The next transformation, which led to its current status, came in the late ’90s, when JMK became the first BMW Certified Collision Repair Center (CCRC) in the nation. It remains one of just a handful of BMW-certified shops in the New Jersey, New York, Connecticut tri-state area and one of only 40 nationwide, growing to more than $4 million in annual sales along the way. Tom Gillespie joined the team in 1997, first rising to assistant manager, then manager of the dealership’s autobody shop.
Now approaching 15 years of experience at both independent and dealer body shops, Gillespie understands what it takes to be successful in each of their very similar, yet very different worlds. Probably the most significant differences, he notes, arise from divergent management structures.
In an independent shop, for example, the owner/operator makes his own decisions based solely on the plans and goals of the shop and its employees, Gillespie notes. In a dealership shop, however, decisions and actions must be based on what’s good for the entire company and all of its departments; so, in many cases, this means that an even higher priority needs to be placed on satisfying every single customer—even those who may be of little or no value to the body shop itself. Otherwise, Gillespie says, “You stand to lose business for three other departments.”
get the customer into another car
What goes around comes around, though: While each individual dealership department has its own independent manager, a common partnership mentality works for common benefit. The sales and service departments, for example, will refer customers to the collision repair shop, and, Gillespie notes, “When we have a total loss, we try to get the customer into another car here.”
Gillespie sees other advantages to being a dealership shop as well. “Today, with the way vehicles are constructed, they’re very difficult to repair without having the necessary guidelines from the manufacturer,” he says. Private shops don’t have access to these specific manufacturer guidelines, except through third-party programs. So being a part of a dealership can take a body shop to the next level in flagship-vehicle repair, and Gillespie lists JMK’s authorization as a BMW CCRC a major key to the company’s success.
Certified Shop, Certified Value
When BMW began its CCRC program eight years ago, Gillespie says, “They approached us to be the pilot.” The primary goal was to provide JMK customers with complete BMW-authorized, one-stop shopping—from purchase to service and major repair. As the BMW CCRC brochure states, “Hopefully, you’ll never need collision repair for your BMW. But in the event of an accident, you can take comfort in the fact that BMW [CCRCs] are dedicated to … restoring your vehicle to pre-accident condition according to BMW factory specifications.”
Even though JMK Autobody was a dealership shop before becoming certified, “It changed everything. We had a private-owned shop philosophy and it changed to a corporate owned,” Gillespie says. The shop, for example, had to adapt to corporate processes, become technologically adept at inter-office mail and Internet use, and conduct personnel training. In addition, managing a certified shop can give rise to different standards of success than those of a private shop. For instance, JMK does not put a great deal of weight on cycle time.
“The huge percentage of our customers want quality. They don’t care about time as long as they get quality—and thus begins the battle with the insurance companies,” Gillespie says.
He describes this as, “Some pencil-pusher who has never stepped foot in a body shop figures that if there are 40 hours on an estimate and eight hours in a day, the car should be done in five or six days. This doesn’t take into account any inaccuracies in his estimate, parts delays or test fitting panels. We don’t make money by letting cars sit around at idle.”
Gillespie lists the following beneficial certification trade-offs:
Equipment. “We made some pretty expensive investments in equipment and the facility to bring it up to speed,” Gillespie recalls. The expenditures were required because only BMW-mandated equipment and original BMW parts can be used in any repair. In making the investment, the shop also gained access to equipment, tools, training and backing exclusive to BMW-certified shops.
The investment was high because of the quality of the equipment, which is designed from vehicle blueprints to enable body tolerances of one millimeter or less. One example is the Celette framework equipment, featuring a fixture system instead of a measuring system. The system is designed to eliminate all human error and is made to be so simple, a 15-year-old could use it, Gillespie says. However, the piece takes a lot more time for vehicle set-up to enable the tiny body tolerance.
In its 12,000-square-foot facility, JMK also has two downdraft CMC spraybooths, one drive-on Dataliner machine, a detail center, an aluminum repair center, three Celette dedicated frame benches and a 17-person staff—seven repair technicians, two painters, three detailers and five office staffers.
Technician Training. To earn certification, BMW technicians undergo more than 100 hours of specialized training. “This makes it difficult for private shops to compete because they don’t have access to the training,” Gillespie explains.
BMW-certified shops also have access to an online system that provides step-by-step guidance to specific repairs; they get consultation visits four times a year; and managers attend conferences two to four times a year to get updated corporate information and a chance to network with other certified shop managers to discuss issues, challenges and best practices.
“Money is not made in the shop anymore as much as it is made in the office,” Gillespie says. “The more information my advisors have and the more familiar they are with the BMW line, the better we can get paid for what we do. This is the whole key to our philosophy. Thousands of shops out there that do a ‘good’ job, but can they fix it the way the manufacturer wants it done and can they get paid for fixing it that way?”
The Certification. To apply for certification, a shop must be associated with a BMW dealer. The shop must be inspected by a BMW field-service engineer and be approved by a BMW consultant. The shop also must invest in BMW-required facility and equipment improvements and purchases. Once certified, CCRCs are completely backed by BMW, with a guarantee on all work performed by a certified center.
The payoff of such stringent requirements has been worthwhile, Gillespie says.
During the past four years, for example, JMK Autobody annual sales have increased $400,000 through November 2007, with successive increases each year before. Its repair order count has decreased, effectively demonstrating that the shop is writing more accurate and more detailed tickets; and the shop has three fewer staff members. JMK’s BMW business alone has also increased $300,000.
Meanwhile, JMK has a two-to three-month backlog year-round for drivable repairs and thus carries only a 50- to 60-percent closing rate on its estimating. Gillespie is working toward shop expansion to increase JMK’s close rate. The shop includes 12,000 square feet, but the entire JMK dealership is growing. “I would like to double our size within the next two to three years,” Gillespie says.
Universal Success Secrets
While certification provides advantages in the repair of flagship vehicles, Gillespie knows it’s not the only road to success. In fact, despite the differences between private and certified shops, some secrets of success are universal. Adequate and ongoing training prevents mistakes. A dedicated staff overcomes countless stressors. And taking care of the customer is essential.
That’s a lesson Gillespie learned early:
“As a child, I absolutely hated cleaning my parents’ cars. I was terrible at it. But I guess once you start getting a paycheck, your outlook changes, because I am now an absolute fanatic about keeping my cars clean, and I try to instill the same values at JMK for our customers’ benefit. We go above and beyond when detailing our customers’ cars. This is the first thing people see when they come to get their vehicle. They can’t see the perfect welds or the corrosion protection, but they sure see when their car is clean and shiny.”