7 Keys to Making a Value-Added Service Work
When collision repair shops offer services that add value to a customer’s experience, they can increase customer satisfaction, decrease cycle time and provide an additional revenue stream. Offering services like headlight restorations, paintless dent repair (PDR), glass work and detailing are all ways to do this, says Steve Trapp, North American services manager for Axalta Coating Systems.
Besides the benefits for customers, value-added services are also a way to drive business to your shop in a changing landscape for independent shops, Trapp says. For example, he says that he’s noticed many MSOs have invested in glass repair and many even have mobile operations.
“A lot of shops are getting consolidated, so being independent, we need to offer different values,” says Lonny Moore, owner of Lonny Moore’s Collision Repair in Park City, Kan. “By offering glass, we offer another way to get customers in.”
Before creating this additional business, however, it’s imperative to figure out the right service for your shop. Trapp and several shop owners who have diversified services offer their tips for making a value-added service a success.
Identify Demographic Needs
Mark Schumacher’s shop, Dave’s Auto Body in Omaha, Neb., sees hail from time to time. That’s one of the reasons that he decided to offer PDR services to his customers. Hail is also the same reason that Moore decided to offer glass repair. In 1992, there was a large hailstorm in Wichita and Moore realized that by subletting out glass repair, he was missing out on a potential revenue stream. For Schumacher and Moore, work that’s caused by hail damage makes sense to do in-house. Trapp adds that glass repair and PDR are services that are good bets almost everywhere.
“Go out in your parking lot at work. I guarantee over half the cars have at least one ding that could be repaired,” Trapp says.
Some services, like rustproofing, are more location specific. Trapp says that it makes sense for a shop in Minnesota to offer the service, but not necessarily for a shop in Florida that wouldn’t see a lot of rusted vehicles. Another consideration is the area that your shop is located in your city. Retail services make sense for shops that are in high-traffic areas, Trapp says, but not necessarily for shops that are located in industrial areas and work off of referrals.
Research the Market
Trapp says to also consider your market before investing. Is your market flooded with in-house glass repair? If so, that’s either not the best decision for your shop or you need to find a way to differentiate yourself against the competition, Trapp says.
Moore does this by detailing every car that receives glass work. Moore says that it is something that glass companies don’t offer and he says 9 out of 10 times, a customer will comment that they’re impressed by this service or give a future referral.
Make Sure the Investment Pays Off
Moore and Schumacher each say that the financial investment for equipment and training to do in-house glass repair and PDR was less than $5,000. Moore says that his shop has saved big when it comes to cycle time. According to him, by performing the glass work in-house instead of subletting it out, he saves roughly 24 hours per job. Moore suggests that shops that are considering glass repair should check to see what their collision guide charges for removal and installation of glass. That’s money that will be deducted from the total amount of the repair if you have to sublet it out. For shops that are able to do the work in-house, that’s money that’s added to the bottom line.
“We average 7–10 cars per week that we do glass work on,” Moore says. “Glass adds up fast.”
Consider Sales Culture
In order for value-added services to work, the staff needs to have the ability to sell. Trapp says that employees that haven’t been trained on this may not have the skills necessary to sell these services. Before investing, Trapp says owners should consider this and if they do not think their staff has the ability to sell added services, either go back to the drawing board or get them training on how to best sell added services.
Weigh Workload Capacity
For shop owners that are on the fence, Trapp says that they should take their current workload into consideration.
“If you’re feeling overwhelmed, you can’t take on much more,” Trapp says. “If you’re in a situation where your business is in a development role and you can foster the additional business, it’s going to work better.”
Trapp adds that shop owners that are feeling overwhelmed can delegate the work to another leader in the company. If there’s someone that can take the wheel and really lead the initiative, it can still work.
Examine Your Shop’s Capacity
At Dave’s Auto Body, Schumacher has a bay that’s dedicated to PDR work. He advises shop owners that are considering a value-added service to make sure that they have the necessary space in his or her shop to accommodate the extra work.
Hire the Right People
Schumacher has an employee that formerly performed stand-alone PDR work come in three days per week to do in-house PDR. Hiring a former independent contractor is a technique that Trapp suggests.
“It doesn’t always work well, but sometimes you can connect with someone that went out on their own but has found it difficult to maintain a clientele,” Trapp says.
By partnering with a shop, subcontractors can find more stability and shops can get someone on staff that already has the necessary skills.
Moore went a different route and decided to train someone for glass repair who referred from another shop. The employee had done a lot of rebuilds and Moore thought he would pick up on the process pretty quickly, which he did.
For shop owners that are unsure about whether or not they can hire another employee for the value-added service, Trapp has some advice:
“Take the salary of the person that you’ll have performing the service that you’ve decided on and divide it by 100 percent, desired gross profit and that will give you your gross sales number,” Trapp says. “You need to figure out if you have enough gross sales to warrant this person’s pay.”
Trapp goes on to advise that if you’re trying to decide whether or not to hire a full or part-time employee, to start tracking how much of the service you’re currently doing. For example, if you’re interested in doing glass repair, track how much glass you’re selling today. Schumacher hasn’t hired a full-time employee for PDR work because there’s not enough demand for it. Instead, the shop is able to schedule the work up front for the three days per week that the PDR tech is in the shop. Schumacher says that at least half of his customers that come in with a previously undetected dent end up getting the PDR work done.