Your Plan for 2017
“The Perfect Storm” has already begun to swallow up shops—and Bob Gibson witnessed it firsthand.
“I had a friend who just sold his shop. He just got to the point where he hadn’t moved along with the industry. He hadn’t bought new equipment, hadn’t invested in training,” Gibson says. “With all the changes in the industry, he figured he’d have to flip his business upside down, so he just retired. I think there’s a lot of guys who are, unfortunately, at this point.”
Gibson, on the other hand, has been no stranger to change since taking over Total Auto Body from his father in 1989. Over the past 27 years, Gibson has focused on continuous improvement, adapting to a lean model, expanding his facility, and investing in new training and equipment for his Grafton, Wis., shop, which now pulls in just over $2 million annually with eight employees.
Gibson is also always trying to improve his repair planning process—that crucial 20 percent—and he says his biggest challenge today comes with the rising importance of OEM certifications, which he believes could replace DRPs. And with that alternative, he’s in the midst of making one huge shift that could become reality for all shops: on-demand scheduling.
Essentially, OEMs could eliminate insurance as the middleman. And without the back-and-forth that comes with insurance companies and authorization, Gibson believes shops will need to accommodate an increasing number of walk-ins, as OEMs will automatically recommend nearby certified shops.
“With OEMs setting up networks through CCC DRIVE and phone apps, I think that the days of planning two weeks out are going to be gone,” Gibson says. “Cars are going to show up every day because you’ve networked with all these companies and gotten their certifications.”
The “networks” Gibson is referring to are programs—such as CCC ONE, ALLDATA, Mitchell—that present OEM data to estimators by offering visual cues and prompting them when OEM information is available.
It also involves vehicle systems and apps that present a list of certified shops after an accident. OEMs partner with repair information providers and in some cases have their own apps. By utilizing these systems, Gibson brings in customers he would have previously never landed.
“We’ve had people drive their cars 100 miles to have their cars repaired here because we’re Honda certified,” Gibson says. “There’s value to it and the shops that aren’t seeing that are missing out.”
If you’d like to focus on OEMs over DRPs, Gibson says to chip away at your scheduled-to-walk-in ratio. Determine the number of hours your shop is capable of producing in one day—in this case, let’s say it’s 100 hours—and then reign back scheduled work. So if you’re scheduling 50 hours of work now, slowly reduce it to 20 over the next few years as you establish more OEM certifications.
Gibson has assigned one estimator to handle all walk-ins and perform the check-in, create the blueprint, and write the estimate. The estimator can then immediately communicate with the parts manager and get the vehicle onto the repair floor.
“[The estimator] can do two or three cars a day,” Gibson says. “We’re almost to the point where we need a second person.”