If a random group of repairers were polled about the shop model they’d like to run most, it would be a highly profitable operation yet small enough to be manageable, growing and, most importantly, independent of insurer influence. But such shops typically are specialty operations that concentrate on high-end vehicles. They require an enormous initial investment that puts them well out of reach of most potential owners.
“Total-Lane Alley” is located behind the shop. Iacona’s evaluates totals to ensure customers are paid their true value. Click here for more photos.
So is it time to quit dreaming and build a more conventional business? Not if you’re Iacona Collision Specialists, a Chester, Pa.-based shop that has found a creative way to build that ideal model.
A waterfall helps create a relaxing atmosphere for customers. Click here for more photos.
First, appearances matter. At first site, it’s clear Iacona’s operates differently. Situated in a heavily blue-collar town outside Philadelphia, the third-generation shop looks much like it could be conducting business in an affluent neighborhood. Following a $750,000 renovation, the shop sports an elegant stone front leading into a towering vestibule that opens into a customer area adorned with granite and marble finishes; dark, plush leather furniture; and a waterfall. Owner Joe Iacona believes the atmosphere in the workplace should be as attractive and comfortable as one’s home.
The shop’s work area is stocked with some of the most up-to-date repair equipment available, including a spot welder, an extended downdraft paint booth and a waterborne paint system. While the shop is well-suited to handle luxury vehicles, the bulk of Iacona’s work is main-stream, high-production vehicles.
If all this wasn’t unexpected enough, Iacona is surprising in another area – it has no DRPs, a feat it manages using a combination of business leverage and integrity.
The leverage comes from the successful towing and rental-car operations that share the shop’s sprawling property and are owned by Iacona, though maintained under a completely separate corporation. The two operations complement the shop’s business. Towing customers have the opportunity to view the shop when they have their damaged vehicles released. The rental agency provides customers with a low-cost alternative to larger car-rental companies. Iacona says his agency can extend special rates to meet the low daily rental allowances provided by some insurance policies. If the time for a repair exceeds the maximum rental allowance by a day or two, he can provide customers a rental at no cost from his 16-car fleet during this period.
Because both operations feed into the shop’s business, they permit Iacona to avoid taking part in DRPs. Iacona says he wouldn’t run his business any other way because that kind of independence allows him to repair vehicles the way he wants. That philosophy has sustained the shop since it was first founded.
“Since my grandfather owned the shop, we’ve always sold ourselves based on the quality of our repairs – the workmanship and safety,” he says. “We’ve always brought in our business based on word of mouth from that.”
Because Iacona is completely independent, it has the customer’s best interest in mind. Meeting that best interest means providing what the shop calls invisible repairs - ones that are so well done another shop wouldn’t be able to spot them if the vehicle were to be involved in another accident. The invisible moniker grew out of an incident in which Iacona discovered shoddy work and areas where required repairs weren’t performed on a vehicle repaired by another shop.
The shop reserves an area for heavy hits. Click here for more photos.
“We want cars leaving our shops looking just like they came from the manufacturer,” says Romeo Karalis, manager of general operations.
Beyond appearances, Karalis says the repairs must not detract from the vehicle’s value.
“This is what we’re doing for our customers, putting the full value of the repair put back in the vehicle,” he says. “Our repairs won’t devalue a vehicle. We’re going to ROI everything.”
“A DRP obviously isn’t going to be happy if one of its shops starts fighting it on a total’s value,” he says. “We can.”
Iacona is working diligently to inform a growing pool of potential customers about this benefit and the other services it provides. While word-of-mouth advertising still will be central to the shop’s business, Iacona has started employing other marketing efforts – including a website and a prize-winning classic restoration service that creates customer awareness via car shows – to generate new business.
All these efforts are bearing fruit, Karalis says, citing an increase of business from four vehicles a week to six. Iacona projects 2010 revenues will increase from $600,000 to $750,000. From there, Karalis expects business to grow even more. Iacona says his operation has the capacity to generate $2 million to $3 million annually.
“We’ve built the Taj Mahal, now we’re working to bring more people to it,” he says.
When those customers arrive, they’ll find Iacona performing work as it’s always done – on their own terms for the customer’s benefit.