Lean as Business-Building Strategy

June 1, 2011
D-Patrick Body and Glass Downtown has tripled revenue during the past decade, despite being walled into a tiny urban space with no opportunity to expand. How’d they do it? Aggressive marketing, lean practices, and customer care that goes above and beyond.

If any body shop is an island, it’s D-Patrick Body and Glass Downtown in Evansville, Ind.

The shop, affiliated with a Ford dealership that has roots dating back more than half a century, is the last of the city’s urban collision repair facilities. In the heart of downtown, the 4,500-square-foot shop is surrounded by an urban ocean. It operates in a multi-use building that offers no room for growth.

But shop director Greg Hagan, an ordained minister who landed at the shop just over a decade ago after a stint managing a Walmart auto service center, has squeezed a surprising amount of productivity out of the space.

Since he started, the number of cars coming through the downtown shop each month has jumped to 60 from 10, boosting annual revenue to $1.2 million from $350,000. The staff has grown from two combo men to seven employees. And the shop, once a lone operation, has grown into the anchor of a three-shop D-Patrick network. A fourth location is in the works.

The growth, Hagan says, is the result of aggressive marketing, loyalty to lean practices, a focus on improving customers’ first impressions and attention to service beyond the repairs customers pay for.

Nobody Walks

“Greg, he doesn’t just let people walk away,” says Charlie Crabtree, one of the two employees who worked at the shop when Hagan started. Crabtree now manages one of D-Patrick’s other collision centers.

“That made a big difference,” Crabtree says of the early days. “Within a month or so, business doubled. Before Greg, we did a lot of standing around and then when Greg came, we worked all day, started staying late and worked some weekends.”

Hagan says the downtown shop used to simply wait for customers to show up, relying mostly on the dealership for business. That wasn’t OK with him, and he set out immediately to change the shop’s strategy. Here’s how he did it:

Appearance. Hagan’s first task was to clean up the cluttered, uninviting shop, which had been neglected for years. His goal was to wow customers from the moment they stepped through the door. Straightening up work benches, sweeping the floor and other basic cleaning went a long way toward making that happen.

“It’s not about what we see, it’s what the customer sees coming to your shop for the first time,” he says. “Why would they want to leave their second biggest investment with me if I can’t pick up cigarette butts?”

Marketing. Hagan launched an aggressive advertising campaign that included radio spots, email blasts and calls to insurance companies. The business’s DRP relationships grew from one to six because of that effort.

Hagan also packaged a letter introducing the body shop with a brochure about accident advice, and gave it to the dealership to distribute to car buyers.

“That’s the advantage a dealership has over a stand-alone [shop],” Hagan says. “We have built-in customers.”

And though the dealership is important to his success, he recently dropped its Ford connotation from the shop’s name and logo. The idea?

To emphasize that he repairs everything. Roughly half of his business is Ford, the rest is a mix of domestic and foreign makes.

“I want to take advantage of the dealership,” Hagan says. “But I want to establish the brand.”

Hagan has his own personal marketing tactic, too. He places business cards on damaged vehicles or those he knows have been the subject of recalls. He is always hunting for customers.

Customer care. Hagan says that merely touting quality work is not a good strategy these days because just about every shop does good work. His focus has been on meeting customer needs beyond the repairs they come in for.

He hired a couple of new employees who knew more about sales than body work and set them loose offering different customer services, from onsite estimates to discounted rental car arrangements. And these days, every car the shop services receives a full wash and vacuum at no additional charge. The shop will even make small fixes, such as paint touch-ups, for free.

“I want the car to go back to the customer cleaner than when they brought it in,” Hagan says. “It doesn’t take much longer.”

The shop also spends the extra time on vehicles because it works with the dealership to acquire them as trade-ins when a customer decides to buy a new car. Hagan says he asks employees to think of the vehicles as the company’s property, because they will be someday.

Lean principles. The shop’s additional attention to detail doesn’t take up much time because Hagan has created a streamlined workspace that allows for surprising efficiency given the size of the shop.

He’s invested about $225,000 in new equipment, including parts carts, a compression spot welder, plasma cutter, digital measuring tools, a mobile prep station and a no-bake clearcoat from Sherwin-Williams that he says reduces drying time by 20 to 30 minutes. All the new equipment helps employees do their jobs faster, as does an emphasis on teamwork, Hagan says.

Hagan also hired a full-time glass technician to work for all of D-Patrick’s shops, so cars no longer have to be sent out for glasswork.

A Catalyst for Growth

As the downtown shop maxed out its production, D-Patrick decided to build upon that success with two new locations on the outskirts of town. Using the marketing and management strategies that made the first shop a success, the newer facilities—each of them around 15,000 square feet in size—have helped D-Patrick’s collision repair segment bring in more than $4 million in annual revenue.

Hagan, who oversees all of D-Patrick's repair facilities, says the company is in the process of building a fourth shop, an 18,000-square-foot stand-alone store. But the downtown shop will continue to be the anchor, and a recent makeover of its nearby dealership coupled with growing development in the area should make for a bright future, he says.

He says he’s had some techs work evenings to keep up with customer demand and he’s considering adding a second shift to help capture new business. But the company’s main focus at the moment is driving traffic to its new locations on the outskirts of Evansville, which are positioned in growing areas.

“We can’t expand downtown,” he says. “But now we’ve gone to other sites to make up the difference.”

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