Robert Rick hears the same story too often from shop owners around the country.
As the senior business development manager for Axalta Coating Systems, Rick is often tasked with filling up empty bays. And the reason those bays are empty? Well, that’s where the story comes in.
“I’ll come into a shop, and people will be standing around. Phones aren’t ringing, the guys in the back are working on a couple cars or standing there,” Rick says. “[The shop owner will] sit there and tell me, ‘Oh, April’s always a bad month. There’s this going on and that going on, and the weather is this or that. There’s just nothing you can do about it.’ And I’ll just sit there and nod and nod until they’re done.
“Then I’ll tell them they’re absolutely dead wrong.”
The fact is, Rick says, there is always something a shop staff can do—and should do—to either fill up its bays or use its “down time” more productively—tasks and tactics that not only help to turn around slow sales periods but also allow your shop to improve its efficiency, profitability and a number of other key performance indicators (KPIs) critical to success in every aspect of your business.
It all comes down to having a contingency plan.
“We need to stop being so reactionary in this industry,” Rick says. “If you anticipate ‘regular’ downturns, or at least have a plan for the unexpected ones, you’re going to figure out how to really succeed.”
Rick and shop operator John Shoemaker of Bowditch Collision Center in Virginia helped break down a simple process of formulating a contingency plan for any event in the shop—and gave their suggestions on ways to increase sales, productivity and profitability during a slow stretch.
Making the Plan
Contingency plans are created in order to prepare for unexpected changes or events that can divert a business from its normal course. If created effectively, they can be used to mitigate risk and help businesses respond quickly to adversity.
Most often for collision shops, they are a great tool to turn around a lull in workflow.
“We always want to have a full shop and working at capacity,” says Shoemaker, who’s worked as an industry consultant for years before taking over operations at Bowditch’s 40-vehicle-per-week facility in Newport News, Va. “We staff and purchase equipment and operate with the expectation of having a full workload. Inevitably, though, every shop is going to have a slow period. For some, it can be a morning or a day; others it can be much, much longer. Either way, you have to have something in place to be prepared for it.”
Shoemaker says that creating a contingency plan for any risk in business is a relatively simple, four-step process:
1. Understand proper shop levels. You need to have a complete grasp of what your shop is capable of producing, and what it needs to produce in order to be profitable and efficient.
2. Understand each staff member’s role. Every member of the shop team should have a clearly defined role that includes clearly defined tasks they are responsible for. That includes management. And, as a manager or operator, you need to have a complete understanding of how all those roles would affect one another.
3. Set minimum thresholds. Whether it’s a more intangible rule that no employee should stand around with nothing to do or a more formal requirement of certain productivity numbers per hour, Shoemaker says you need guidelines that define when the shop is in fact “slow,” and when this plan should kick in. These can be for the team or shop as a whole, or for individual employees or managers.
4. Develop alternative work ideas. Create a plan for what that employee or the team as a whole should do when that minimum threshold is not met. In theory, this part is simple. In actuality, a lack of ideas is why many shops struggle with decreased KPIs when jobs get scarce.
Getting Back on Track
There are countless ways to increase sales, productivity and profit for your shop during one of these stretches, Rick says. “Too many to make excuses about it,” he says with a laugh.
He and Shoemaker offer the strategies they find to be most effective:
Increasing Car Count
Mine your customer database. Shoemaker has his team enter a repair order number into his shop’s database once a vehicle becomes in-process. All unsold estimates do not have a number. “So, I simply hit a button and it brings up all those without a number,” he says. “And we can get to work on calling those people.”
Reach out to fleet accounts. If your shop does fleet work, Shoemaker says slow times are an opportunity to reach out to those accounts. He tracks how many vehicles each account has, and every detail of work each needs. So, when times get slow, he says, he simply calls the company and lets them know he can get their vehicle in and out quickly for them.
Increasing Overall Productivity
Team up. Rick says a slow period should actually be an opportunity to improve certain KPIs like cycle time and touch time. If the back of the shop is low on work, he advises having technicians team up to push the vehicles through even more efficiently. “Too often, people slow down when there’s less work because there’s no rush,” he says. “While the front of the shop works on [increasing car count], the back should be pushing those cars through much quicker than normal.” This is also a way to improve profitability, Rick adds.
Ramp up your role. Don’t have as much time for engaging with customers? Rick says slow periods are the perfect time for owners and managers to get more involved. Make personal calls on unsold estimates. Get facetime with each customer that comes in to drop off or receive a vehicle. It will go a long way toward demonstrating you’re a customer-first company, and improving CSI scores.
Equipment repairs and maintenance. Keep a calendar of when each piece of shop equipment needs maintenance, Shoemaker suggests, and when technicians or other staffers have free time, get that work done. It may seem unproductive as far as workflow, but properly working equipment, in the long run, will help improve efficiency.
Training. In the same line of thinking as maintenance, Rick says that slow periods are the perfect time to ensure all employees are caught up on all their continuing education (or to work on the shop’s CE work with insurance partners). Again, it’s not contributing to workflow, but it is going to have a much larger impact on your shop’s performance.
Increasing Profit
Thorough inspections and upselling. This should always be done, Rick says, but, too often, it’s not. Regardless, he says to take advantage of the extra time and conduct an extremely thorough walk-through and inspection of the vehicle at the initial check-in. On the vast majority of vehicles, there are going to be items unrelated to the accident that can be turned into customer-pay jobs. “You have to remember that every vehicle is broken into two jobs: the one the insurance company is paying for and then the customer-pay job,” Rick says. “Always work on both of those. And, when times are slower, you can try to increase your chances of getting that customer-pay work by letting them know it can get done quicker—maybe even at a discount—and that work is usually on labor cost anyway. There’s a large margin on a lot of that.”
Always Be Prepared
Rick says that shops should always try to plan for every scenario they might face—a slow stretch is just one of them.
“Having an overflow of work can be just as harmful to a shop, if you’re not prepared to properly handle it,” he says. “What it comes down to is that if you’re planning appropriately, and have the right plans in place, there shouldn’t be many times that your shop hits stretches that hurt the bottom line.
“If you have a plan in place, you’re not reacting to situations and scrambling. You were proactive. You’re prepared. You’re ready for it.”
