Like many in the industry, Larry Peotter appreciates the value of a good referral.
Quality work and customer care is what built his family’s shop, Peotter’s Auto Body Inc., into a Summit, N.J., mainstay; it’s the reason that after 29 years in business, the shop is one of the region’s premier high-end collision repair specialists.
Specialist is the key word here, because, as Peotter puts it, that’s where one of the industry’s best modern referral sources comes from: manufacturer certification.
“People want the best qualified person working on their vehicle,” Peotter says. “Who’s better to tell them than the person who made the vehicle?”
Peotter’s has a number of certifications, its newest being from electric-vehicle maker Tesla Motors.
Tesla was founded in 2003 by PayPal co-founder and billionaire Elon Musk. It released its Roadster sports car in 2008, and has since come out with its Model S and Model X sedans.
And the company is growing significantly. A Reuter’s report last fall said Tesla’s overall value rose 470 percent in 2013 to just over $23 billion. With Musk’s commitment to advancing the company’s electronic technology (Tesla announced last October it will have a series of “affordable” vehicles on the market in either 2016 or 2017), many believe Tesla is going to continue a steady rise in the industry.
It’s a trend many collision shops are looking to take advantage of. Tesla has its own mechanical service centers located throughout the country, but has adopted a certification model for its body repair services.
Two shops shared their experiences of joining and working in the Tesla program with FenderBender.
The Backstory
Just a year ago, skeptics often dismissed upstart Tesla as a novelty—high-end sport vehicles that priced themselves out of mass-market appeal.
KEVIN MARVIN
Body shop manager
Criswell Collision Center
Annapolis, Md.
Size:
44,000 square feet
Staff:
25
Annual Revenue: $4.7 million
Kevin Marvin understands that thinking. Heck, he felt that way himself until he got a call from a Tesla representative in early 2013.
“We were already certified for Audi to work on its aluminum A8,” he says. “And [Tesla was] looking to fast-track a shop to work on their vehicles in our area.
“Honestly, I didn’t even know about the Model S yet. All I heard of was the Roadster.”
The Decision
Criswell Collision had only been open for four years when Tesla first came calling, but the shop had already developed its reputation for its aluminum work from working with its Audi dealer.
Marvin began researching Tesla vehicles and saw the opportunity.
Tesla was looking to quickly establish a body shop partner in Marvin’s area, so the certification program would develop as Criswell Collision went through it.
Marvin and his team had many of the prerequisites already locked down: a clean room and the equipment, tools and basic training for aluminum work. The shop had already invested roughly $300,000 into its Audi certification, Marvin says.
To get on the Tesla program, Marvin was required to send at least one technician through three, five-day training sessions at Tesla’s headquarters in California. He also had to make roughly $30,000 in additional equipment purchases for a Böllhoff riveter (Tesla requires two different kinds) and certain fixtures for his frame bench.
The Aftermath
Marvin says he got word of his shop’s Tesla certification on a Friday. The next Monday he had seven Model S vehicles at the shop.
On average, Marvin says his shop has seen four or five Tesla vehicle seach week since. And, he says, these are high-ticket jobs, similar to what his shop does for the A8s it works on.
“I mean, you put a quarter panel on a Model S, and that’s going to be an $18,000 job, compared to, what, $5,000 for the average [domestic] vehicle?” Marvin says. “That’s a pretty big difference.”
While certainly not the only factor contributing to success, Marvin says the Tesla certification has played a role in the shop’s 11 percent growth in the last year.
The Takeaway
The return on Criswell Collision’s investment in the Tesla program was quick, Marvin says. Granted, that comes with the rather large caveat that they were already well prepared due to their Audi certification.
“Certification is a big investment. It’ll take a number of years to break even on the Audi one,” he says. “But you have to look at it that if you don’t do it, you can’t work on those vehicles. Period.
“Overall, you look at the industry and how so many shops are working to break away from [insurer direct-repair programs], and manufacturer certification is a great way to do that. You’re giving yourself a new source of work, and you’re becoming an expert to a customer base that is going to really want that.”
EXPERT TAKE
Adding Value Through Certification
Steven Feltovich, manager of business consulting services for Sherwin-Williams, discusses what manufacturer certifications can do for your shop.
I’m a big fan of certifications and what they can do for the independent shop. Because you often have to be nominated by a local dealership, it gives you an automatic new (or expanded) avenue for more jobs. But the benefits go beyond that. Here are three key ones:
Customer Perception. The status symbol of being a part of a manufacturer’s program essentially gives you a new brand all on its own. Most true certification programs come from higher-end brands, and those customers are looking for those designations. It gives them an automatic sense of confidence in that their vehicle maker has put its name behind you.
Staff Improvement. There is a lot of training that’s required to be part of these programs, and that’s a huge benefit for your technicians. Also, the amount of repair information that certified shops regularly get is an enormous advantage over other shops.
Internal Auditing. The majority of these programs do a very thorough audit of your shop before certifying you. They look at facility, processes, people, customer service, aesthetics, tooling equipment, everything. It gives you the chance to regularly focus on overall business improvement.
The Backstory
Since Larry Peotter’s parents founded Peotter’s Auto Body 30 years ago, the shop has always focused on putting itself at the cutting edge of repair technology.
LARRY PEOTTER
Co-Owner and manager
Peotter’s Auto Body Inc.
Summit, N.J.
Size:
10,000 square feet
Staff:
18
Annual Revenue:
$3 million
The unique three-story shop has specialized in high-end vehicles for decades. When Tesla came calling a year ago, Peotter’s was already certified by BMW, Volvo and Jaguar.
“They reached out to us, and, really, it was something we were already thinking about,” Peotter says. “It just sort of seemed like it would fit.”
The Decision
Peotter had already noticed the emergence of the Model S in his area. Tesla had opened a mechanical service center just two miles from his shop, and there was a Tesla store in a local mall as well.
“You combine that with the fact that there were only about two or three other shops in New Jersey that were certified for Jaguar aluminum work like we are, and it was something I really wanted for the shop,” he says.
Peotter has 12 technicians on staff but chose to take the Tesla courses himself to gain the shop’s certification. Not only did that help prevent a loss of productivity that would’ve occurred sending one of his techs, but it has allowed Peotter to train his staff on the additional information he’s picked up.
The classes, Peotter says, are $1,500 a piece.
Similar to Marvin, Peotter only needed to purchase the additional riveter and a handful of fixtures for his bench.
The Aftermath
Peotter says his shop sees six or seven Teslas each week—nearly a fourth of the business’s weekly car count. Eighty-five percent of those Teslas, he says, come straight from the service center or from the mall showroom.
Factor in that the average ticket has been roughly $10,000 per Tesla vehicle (and Peotter says he has yet to have a “hard hit” on one yet), and the certification has been a lucrative investment for the shop.
“Well, and you look at the fact that this is an up-and-coming company, not one that’s going anywhere any time soon, and it’s really promising,” he says. “They’re very good to work with. Because of the way they’re structured, and they’re lack of true dealerships, you’re always working straight with their headquarters. You’re talking directly to them.
“This is a company that doesn’t have to answer to anyone but their customers, so they’re extremely focused on quality. That’s all that matters to them.”
The Takeaway
The move to Tesla’s program has coincided with Peotter’s transition to running the day-to-day operations of the shop. He moved into the role last year when his father passed away.
The goal moving forward, he says, is to position the shop as the foremost expert to all of its customers. Specialization and certification are the keys to doing that.
“You have to give customers that assurance in their minds that you are the best person for that job,” he says. “That’s what this does for you.
“Whether you’re a high-end shop or not, you need to be giving customers that peace of mind. They need to know they can trust in the work you’re going to do.”
