When it comes to obtaining OEM certifications, Lupe Hererra doesn’t see any wiggle room.
“If you’re not OEM approved and you do not have all of the proper equipment, at some point in the future, your doors will not be open,” he says.
During the Ford National Body Shop Program rollout, Hererra, business development manager for the collision equipment supplier Challenger Agency, was instrumental in educating, equipping and assisting over 20 Texas, New Mexico and Oklahoma body shops to be compliant with Ford’s requirements for the 2015 F-150 military-grade aluminum-body truck.
This trend isn’t exclusive to Ford—to assure quality repairs on their vehicles, major OEMs (including General Motors, Fiat Chrysler America, Hyundai, Ford, Nissan, Infiniti and Honda) have created programs to train shops on achieving these certifications.
While it’s an obvious move for OEMs, the time, money and effort put into obtaining those certifications can actually pay off and boost business for shops, as well. Hererra has now become an inspector for the Assured Performance Network for shops throughout the southwest and continually stresses the importance of OEM training and its advantages.
One of those shops was Barrett Collision Center in Abilene, Texas, where owner Rocky Champion has invested heavily in several OEM certifications. Both Hererra and Champion talk about the benefits and factors one should consider to ensure certifications are worth the investment for your shop.
Weigh the Costs
Tracking the ROI on certain OEM certifications is crucial to deciding whether it will be beneficial to your business. Start with the costs to your business:
Training. Most OEMs require shops to be I-CAR Gold certified, Hererra says. I-CAR provides training for many certified repair networks, and you can visit its website to peruse available courses. In fact, your technicians may not be far from obtaining the credit for a certified program. If you’ve already achieved several of the necessary training requirements, then the additional steps to earn another OEM certification would come at a lower cost. “If I wanted to get Acura certification, I’ve already met most of the qualifications through Assured Performance,” Champion says.
Equipment. Research the equipment required for a particular manufacturer. Since some of the equipment is specialized and needs to be purchased from a particular source, Hererra says to go directly to the company for all equipment costs. Champion saw OEM certifications as a convenient means of updating the shop’s aged equipment. “We needed a new frame machine, plus the heating element on our paint booth was wearing out,” he says. “It just wasn’t worth it to spend time repairing something that old.”
Ongoing fees. Champion says a typical certification costs between $2,500 and $5,000 annually, but Hererra says several OEMs provide rebates based on grades and performance, and will assist with marketing the certification. “I’ve seen several shops use rebates to repair equipment that breaks down or purchase new equipment,” he says. “They want to continue the process because they see what it’s driving, the work it’s pushing through the front door.”
When it comes to improving your bottom line, Hererra says it’s better to view all of these “costs” as investments for improving your business.“If their employees are trained, if their processes are developed, if they have all the right equipment, it’s going to increase profitability altogether, just because they’re going to be so much more efficient,” he says.
Research the Market
“Doing your homework” is the most crucial step in determining the potential ROI for achieving OEM certifications, say Hererra and Champion. Knowing your market’s vehicle saturation and customer demographics aids in understanding which repair networks will bring in the most work.
“Do I primarily do a lot of GM or Ford, or is it a combination of all?” Hererra says to ask yourself. “Within that program, you can pick and choose which ones you want to do and receive the certification. You may just want to do strictly aluminum because all you’re working on is Ford vehicles and you don’t need to worry about the rest.”
If any one manufacturer is making up anywhere near 15 percent of the local market, then it’s probably safe to invest in that certification, Hererra says. With a healthy mix of vehicles in Texas, he encourages most shops to obtain all domestic certifications.
A good way to begin determining whether an OEM certification is right for your shop is to survey shops in the area. If most of them are concentrating on a certain certification, then the market is more than likely there.
In fact, Champion flipped that approach on its head—when the local Nissan dealership eliminated its body shop and he saw no other area shops with a Nissan certification, he invested.
“With them being out of the picture, almost everything Nissan goes to us,” he says.
There are several ways of tracking the market. For DRP shops, Hererra says to capitalize on your insurance relationships in order to retrieve data about your workload. If you’re diligent about tracking your customers, your management system should provide this data as well.
Hererra also suggests utilizing organizations that track vehicle demographics in your area, such as the Department of Transportation. He says partnering with a body shop organization, such as the Assured Performance Network, can aid in achieving several OEM certifications at once, which is crucial in several areas where there’s an even vehicle mix.
Work with OEMs
Ultimately, a high return on your investment comes down to how much extra work you obtain through a certification, which you will weigh against overall costs of achieving the OEM’s approval.
“If you’re paying $5,000 a year for a program, four customers will easily pay for that,” Herrera says. “It’s a very minimal expense. It’s more of an investment in yourself, in your company and what you’re doing.”
Upon joining a repair network, Hererra says an OEM will handle a good portion of the additional marketing you’d have to perform to receive repair work from specific makes. Not only will more work flow through your shop, but those repairs are also typically higher-ticket jobs.
“[OEMs will] say to car owners, ‘These are your premier shops,’” he says. “It has a huge impact on their bottom line if they’re getting referrals from OEMs. It’s going to drive profitability in that shop.”
Promote the Certification
Your shop can do plenty of its own legwork, as well, to ensure it receives work through specific makes.
Hererra says to be sure to boast about your certifications in the customer waiting area, and improve your SEO by promoting the certification on your shop’s website. He says this can pay off in a huge way if you’re looking to use OEMs as an alternative to DRP work.
“If a customer just bought a brand new F-150 and they get in a minor accident, they don’t want to report that to the insurance company. They’re going to [pay to] repair it themselves,” he says. “If the dealership they purchased the vehicle from has no collision center, at that point, they get on the Internet and find one that can repair their vehicle. Those shops are going to be listed on Google and on their OEM’s site for approved centers in the area.”
Beyond the Repair
The value of being a “certified collision repair center” extends beyond receiving more work. OEMs are looking to control the customer experience from purchase to repair to trade-in, and body shops can reap the benefits from the latter two stages.
Carfax reports will indicate whether a vehicle has been repaired at a certified shop, increasing the likelihood that future customers will visit the same shop. Also, it benefits the customer for the vehicle’s trade-in value, which increases when a report states a car has been repaired at an OEM-approved facility.
“I know it’s not an immediate return on investment,” Champion says of his many certifications. “It’s going to be a while, maybe as long as five years, to see a dramatic return. But I did that knowingly because this is the future of the business.”