Car dealership's wide marketing reach, loyal customers negate need for DRPs

Jan. 1, 2020
Serving as The Niello Co.'s central collision repair facility for a 30- to 40- mile network of dealerships covering various car lines, the shop doesn't belong to any direct repair programs and has no interest in pursuing them.

Guyette ABRN auto body repair collision repair shop profile The Niello Co. Jeremy Wooten

Serving as The Niello Co.'s central collision repair facility for a 30- to 40-mile network of dealerships covering various car lines – Audi, Volkswagen, Mini, BMW, Land Rover, Jaguar, Porsche, Smart, Maserati, Acura and Infiniti – the shop doesn't belong to any direct repair programs (DRPs) and has no interest in pursuing any.

"We don't solicit any contracted work because the 11 dealerships and the loyal Niello customers tend to provide enough work to keep our shop busy," says Jeremy Wooten, Sacramento, Calif.-based collision center manager since 2007.

Wooten said he views working with insurance carriers as one of the most significant challenges facing the shop and the industry. Obtaining proper pay has become more problematic.

"In our market, insurance companies change what they say they're willing to pay for," he says. "For example, sublet markup is an argument consistently. We see insurance companies trying to pay the sublet companies directly – cutting us out of any markup, even though we orchestrated and expedited the sublet work. When we have the sublet on our estimate, many of them won't pay the industry standard 25 percent markup for handling the repairs. They are trying to cut us out all together or just pay a small fee that wouldn't even cover our administrative costs.

"I find it ironic that I've been told by insurance companies for years they couldn't pay for particular items because it's not industry standard. Yet when we ask for the 25 percent markup, which has been industry standard since long before I was in the business, they try to deny it."

Wooten is open to negotiating payment terms. Usually, it's with the adjuster in person, but sometimes it's the adjuster's supervisor. He makes those decisions on his own.

Any contentiousness isn't likely to be abated by belonging to a DRP, Wooten says, adding that Niello has chosen not to use DRPs because of their restrictions. Providing discounts on parts and meeting other conditions isn't a part of the plan given the steady volumes rolling into the busy shop.

"We have all the dealerships feeding us, so we don't need that work," he says.

Niello works with insurers and tries to be fair. It expects the same in return.

"We have no DRPs so insurance companies can't dictate how we do repairs," Wooten says. "It helps us maintain a higher standard of quality of repair versus having the pressure of constantly watching cost of repair, cycle time and being fearful if we're going to upset our relationship with any insurance company."

To keep the steady volume of cars, Niello markets to the motoring public by pairing up with dealerships to put small ads in their larger brochures. Collaborating with service departments, e-mail blasts and printed materials are sent to the existing client base. The shop also buys mailing lists from companies using demographics that are usually characteristics of the vehicles' manufacturers with which its working. These marketing efforts raise people's awareness that Niello is a full-service brand with a collision center. Most of the shop's customers come from word-of-mouth and repeat business. The shop doesn't do any other advertising.

In addition to these marketing efforts, an upgraded facility works to Wooten's advantage.

"For the longest time, we had a portable business trailer we used for all the administration and customer interaction," he says. "It wasn't pretty."

When Niello's management constructed a new Smart car center, space was allocated for the collision department's office and customer consultation needs.

"It's a nice building and a more appropriate representation of the Niello brand," Wooten says.

On the shop floor, Wooten is reluctant to describe the repair strategies as being within the lean realm, yet the operation consistently aims for continuous improvement amid ongoing problem-solving deliberations. For example, waterborne paint was adopted in November of 2007.

"We use it because it was presented to us as a great product and it's more environmentally friendly," he says.

Operational efficiencies have been enhanced greatly by having a specific individual, a blueprinter, conduct the teardowns. Once a car is torn down, the blueprinter reviews it and formulates a repair plan and does the supplements.

Five portable frame racks allow production flexibility, too. If a repair is delayed pending the arrival of parts, the apparatus and vehicle can be rolled out of the stall, allowing the technician to pursue other tasks in that space.

Wooten uses ideas he sees in the local market and throughout the country to improve Niello's business. He cites the collective wisdom provided by his DuPont 20 Group associates.

"We've extracted some of the things we can use from looking at shops that are more lean," he says. "We visit other shops and look at their processes. That's the benefit of a 20 Group, and most of them have been in the business for a long time."

When an idea is broached or a problem is presented, there's usually a colleague who has experienced that particular scenario in a been-there-done-that mode.

An additional source of inspiration and assistance is Rob Pane, the parts and service manager at Niello Volkswagen.

"You could call him my mentor," Wooten says. "I've never thought of him that way, but I've leaned on him for advice and direction over the years as a service consultant (Wooten's previous position). Even now we bounce business items off of each other. He's always believed in me, and I've always seen him more as a good friend."

Taking a roundabout career path, Wooten says that he took on collision repair with a bit of now-dispelled trepidation.

"Funny enough, I always made comments that I never wanted to work in the body shop because people are way too particular about their vehicles, and there's a lot of room for error in achieving a successful completion," Wooten says.

Wooten started in the car business when he was 18 because he needed a job. He washed cars at a neighbor's Jeep dealership in Southern California. He landed at Niello's VW dealership – still wielding a bucket and a brush – in 1995 when he moved back to Sacramento.

"I've held many positions there, and as I ascended in the ranks, I honed my skills to qualify for a management position," he says. "I had to look outside the Niello organization because the well-established management personnel weren't going anywhere soon. When I made my move into management, I wanted to look for a VW store where I could apply my knowledge. I figured that when I made the move to management, if it was with a product line I was familiar with, it would simplify the transition. So, I ventured down the road 40 miles to a competitor's VW store."

Six months later, Terry Caudle, the general manager at Niello VW, called Wooten to ask if he was interested in running the company's body shop operations.

"There was a lot of potential and it was closer to home," Wooten says. "I was comfortable with them, and upper management had faith in me. So, I hopped into it. And here we are 3.5 years into it, and I enjoy it – even more so than service."

About the Author

James Guyette

James E. Guyette is a long-time contributing editor to Aftermarket Business World, ABRN and Motor Age magazines.

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