In a town like Lancaster, Ohio, one of the best measures of success is market share. With a population of 35,000, Lancaster is 15 miles away from any other population center—and because few people will travel more than a few miles to get their car repaired, it means each of Lancaster’s 11 body shops is totally dependent on the community for business. For years, the biggest player in the market has been Kumler Collision. President Dean DeRolph declines to reveal the company’s exact market share, but he calls Kumler the “dominant” body shop in the market.
DeRolph credits much of the company’s success to its involvement in a journeyman program, overseen by the U.S. Department of Labor, which 15 of the shop’s 16 technicians have completed. Journeyman programs, which are more popular with electricians and plumbers than in the collision repair industry, combine on-the-job and employer-sponsored classroom training. The program that Kumler employees go through takes a minimum of four years—or longer if an employee needs extra time to demonstrate proficiency. “It’s a great marketing tool,” says DeRolph. “People walk in and they’re looking at 15 journeyman’s papers that are displayed on the wall.”
The journeyman program involves hanging out some carrots, DeRolph says. Salaries are paid according to a scale, with set minimum and maximum salaries. “The first two years when people are learning, they know better pay is down the road,” says DeRolph.
Kumler generally has two journeymen in training at a time. After the first year, trainees join one of Kumler’s three-man teams. Each team has a leader who makes decisions for the team and is generally the most experienced person—although thanks to Kumler’s low turnover rate, many other team members also have a lot of experience. “We haven’t lost a journeyman for nine years,” says DeRolph. “We could write the book on employee retention.”
One of a team leader’s responsibilities is to inspect the team’s work. After a team leader signs off on a job, another team leader also must sign off on it. “Team leaders are quality control checks for each other,” DeRolph says, adding that when the company first initiated the program, some team leaders had sensitive egos. “But once they realized it was helping them, they would go to the pickiest guy they could find. We don’t want a job to come back to us.” After two team leaders have signed-off on a job, it gets a final sign-off from an estimator. As a result, says DeRolph, “Our comeback rate is almost zero.”
DeRolph rewards employees with monetary incentives for productivity and for customer satisfaction, which are paid on a team basis. “The average bonus could be $1,000 per month per technician,” DeRolph says. “And once they hit 150 percent productivity, their pay jumps by a dollar an hour retroactive on top of their other bonus.”
Another bonus is paid based on the company’s customer satisfaction index (CSI), which is measured by an outside firm. That bonus is paid quarterly to every employee—including technicians, estimators and office workers—if the CSI is 98 percent or higher. “It can mean another $5,000 a year per person,” DeRolph says, adding that the program has been well received.
DeRolph recognizes that paying technicians on a salaried basis can be a large expense to carry during a potential slow period. “In the future we’ll weight pay more toward the bonus side,” he says.
Kumler Collision has a long history in Lancaster. The company was started in 1928 by Paul Kumler and later passed on to his son Keith. DeRolph joined in 1973 and bought a part ownership in 1986, then took over management when Keith was killed in an accident six years ago. The company sponsors numerous local sports teams and frequently donates to charities. “We support everything in this community,” says DeRolph. “That’s one of the things that sets us apart.”
Originally a farming community, Lancaster in recent years has become a bedroom community for Columbus. The entire county has been growing at a rate of 17 percent per year. That growth rate has been good for Kumler’s business, but the company also has grown through other means. In the 1980s, it expanded into the mechanical repair business, which is set up as a separate company—eliminating the need to use an outside supplier for mechanical repairs and enabling employees to do some cross-selling. If a car is in for a body repair and technicians notice that it needs new tires, it’s an opportunity to make a tire deal, DeRolph says.
The company also owns 40 rental cars. “We open at 7 so people can pick up a rental car and still be in Columbus by 8,” says DeRolph. The company also has a policy of not charging people for more than 30 days for a car rental, even if an extra day or two is needed. It doesn’t hurt profits to do this because, in comparison with several shorter rentals during the same time period, the company avoids the cost of several cleanings.
Despite Lancaster’s growth, however, residents still seem to have rural values. “We don’t have bad debt,” says DeRolph. “Everybody knows everybody.” Kumler also benefits from the strong work ethic many of its technicians learned growing up on farms, where there always seems to be a chore that needs doing. When you live in that environment, DeRolph says, “You don’t not work.”
Perhaps Kumler’s biggest challenge today is one that many other shops would like to have—how to grow when you’re already the biggest shop in town. Although he has some concerns about the possibility of managing two separate locations, DeRolph says he hasn’t ruled out the idea of branching out into a neighboring community.
SNAPSHOP
Name: Kumler Collision
Location: Lancaster, Ohio
Size: 25,000 sq. ft.
Employees: 30
Volume: 50-55 body repairs per week, 70 mechanical repairs per week