Pursuit of education has body shop owner bringing in the business

Having bought the operation from his brother, who previously had purchased it from their late father, Mack Thomas Sr. in the early 1980s, it became apparent to Mack Jr. that something had to be done. "I knew I needed help and I had to get better educated," he recounts. "My father was very profitable, but it was a new era" of heightened complexities driven by repair technology, business strategies and the increased involvement of insurers in the entire process. 

Thomas set forth on his path of learning after taking up ARMS, a 3M program with a book entitled Automotive Repair Management Systems. "It's the Bible for auto body repair. I still refer to this; it breaks down the concepts and tells you how to do things," he says. "It tries to change body shop owners without a college education into business people."

Although Texarkana's local community college is a fine institution, it didn't offer the industry-specific information Thomas was seeking. There was a seminar being conducted in San Antonio – an eight-hour driving distance – "and away I went, and I've been going to different things for years." 

An overriding lesson throughout has been "you either have to raise your gross profit or lower your costs." Thomas aims to do both as he moves 26 vehicles through the shop each week while bringing in growing revenues.

Giving much credit to his colleagues in the DuPont Business Council IV 20 Group, collision repair sales have consistently been on the rise in each of the last four years by 6 percent to 8 percent. Overall sales posted an impressive spike during the past couple of years because of paintless dent repairs done after two hailstorms.

The 20 Group affiliation has helped Thomas become a better manager, he says. "The other shop owners or operators in our group have so much knowledge that they are willing to share to help anyone in the group. All of these people have become great friends and allies. I would not want to go through this journey as a shop owner without their support."

Boosting sales figures comes from a number of factors, including "good communication with customers and with our insurance partners, and the latest equipment to speed up your technicians and the front office." Reliable information service providers is important for sustained performance in the bays and growing the customer base.

"The most important thing to increasing your sales is do quality work in a reasonable time, which creates word-of-mouth advertising," Thomas says. "Our business was built off word-of-mouth."

Techniques include maintaining a friendly demeanor and "taking care of the little things." A ding, dent or scratch could very well have come from a previous encounter that the customer's car had with another object, yet "sometimes it's a lot better to spend $50 to $150 to make someone happy rather than have them fussing about it. We just do it – give the customer service."

Business also is attracted via an Internet presence, including a Facebook page, and running commercials on cable television. The TV spots are produced for the body shop industry by PreFab Ads of San Francisco. Viewers don't necessarily jot down the phone number flashed on the screen, but they do remember the professionalism portrayed by the images and the Texarkana banner when their needs arise.

Thomas observes that "98 percent of the TV commercials that are locally done look like they're locally done," which is why he's pleased with what PreFab provides.

"A visual advertisement is good for me," he says, "it might not be for others" with less appealing facilities. A 1999 upgrade "was built to appeal to women because we have more women coming in than men." The ambience is appealing and the restrooms sparkle. Just recently "we had someone come in and say, 'Excuse me, I was looking for a body shop,'" Thomas reports, "and we said, 'this is it, come on in.'"

The shop also has separate cubicles for the estimators "so they have privacy when dealing with an insurer or a vehicle owner."

Being on good terms with insurance carriers is another effective business strategy. "I'm DRP-friendly," says Thomas, noting that being selective when partnering with a direct repair program is important. "I won't jump into any DRP; it has to be a good relationship for both of us." He has ended prior arrangements with some insurers "because it was only good for them and we had to move on."

Thomas makes a point to deliver on what he promises, which frequently helps to ensure adequate payment. "We're going to color, sand and buff every part no matter what," he says. Insurance company representatives are aware of how much Texarkana strives for quality, and they usually respond accordingly as pleasing the customer is the ultimate goal for all.

Six DRPs comprise about 55 percent of the business, 35 percent comes through other insurers and 10 percent of the customers are self-paying.

"We are fair and honest with everyone, and that is all most insurance companies want. We also try to provide them with the information and services that they need when they expect it," says Thomas.

Enhancing cycle times is an ongoing endeavor. "We have done things to eliminate waste, which is the truest sense of lean – eliminating waste," he says.

One such improvement is the presence of a "collision mechanic" to handle an array of time- and cost-saving tasks. "I don't like to sublet, so we do all our own mechanical work on wrecked cars. I've never made any money sending something somewhere else."

Among the in-house skills are tires, glass, airbags and alignments.

"I can move more cars through the shop if I can do the alignment when I want to," Thomas says, reciting a litany of logistical hassles when trying to deal with an outside service provider. "I can do the alignment before I send it to paint," he says. "It's all about cycle time. It takes too long to sublet."

A disconcerting trend for Thomas is an increasing push from insurers to apply more aftermarket and used parts to the repairs. "It's really created a challenge for us."

The Texarkana area lacks a salvage yard, and most component orders of all types have to be filled from 150 to 300 miles away – which magnifies any mistakes. "You wait on the used stuff, and 80 percent of the time it's not usable," he says. "It's really killing the customer service for both the insurance company and us. The aftermarket stuff is way better than it used to be, but it's not where it should be. The more (aftermarket parts) you put on, the harder it is to make things line up and be correct."

Filling job openings is difficult. The community of Texarkana has a population of 61,000, consisting mostly of middle class and farm-oriented residents. "There is a lack of technicians in our area," says Thomas. A recent ad for an experienced body technician that ran in the local newspaper netted no phone calls and zero applicants.

"We train a large percentage of our work force," he says. "However, when you do lose an employee and replace them with a trainee it slows your production for some time."

The business carries the equivalent of an "extra overhead person" on the staff that allows Thomas extra time and energy to apply toward tending to the management aspects of the operation while also covering "quality of life" elements such as playing golf each Wednesday.

In addition, Thomas is both proud and confident that his 27-year-old son Jared has assumed the duties of general manager and front-end estimator.

Texarkana's down-the-road expectations are taking a positive route, though, as an interstate highway through town nears completion. Thomas anticipates a more vibrant future for the region: "I think it's going to bust out."

For more information, visit www.texarkanaautobodyworks.com.