An Eye Forward: Does Specialization Give Shops an Advantage?
Published in Hammer & Dolly – Thomas Greco Publishing
“Back in the day.”
“When I opened my shop.”
“Years ago.”
Attend any collision industry event, and you’re sure to hear stories that begin in one of these ways and which proceed to lament the technological advances that have made it so much more challenging to run a successful auto body shop in the present day and age. After all, properly repairing vehicles requires investing in specific tools, equipment and training – all of which vary drastically depending on the vehicle make and model.
But those challenges also present a unique opportunity when it comes to specialization. Because modern vehicles are so complex, many shops are recognizing the benefits of specializing by obtaining certifications from specific OEMs instead of trying to repair everything that comes in their doors.
So, what does it mean to specialize, exactly? The Merriam-Webster dictionary primarily defines specialization as “to concentrate one’s efforts in a special activity, field or practice,” but an alternate meaning makes even more sense when talking about specialization in the collision industry: “to change adaptively.” After all, that’s precisely what shops need to do to stay at the forefront of the field these days – change and adapt in keeping with the technology that constantly does the same.
Change is never easy, but as shops around the country adapt to the reality that repairing every vehicle make and model may not be feasible, many see specialization as the path to future success.
“Cars are more advanced now, so it requires us to be specialized since you can’t be everything to everyone anymore,” says Kris Burton (Rosslyn Auto Body; Alexandria, VA). “When it was my father’s business 25 years ago, we fixed every make and model, but the majority of what we repair now is the vehicles we’re certified in.” Rosslyn currently has OEM certifications from Maserati, Mercedes-Benz, Tesla, Ford, Subaru, Volkswagen, Honda/Acura, Rivian and General Motors.
Sean Robinson of Dulles Coachworks (Sterling, VA) agrees that it’s just not realistic to properly repair every vehicle that comes into the shop. “Between parts restrictions, paint restrictions and the need to repair each vehicle to its pre-accident condition, it just makes sense. OEM certifications are like the new DRPs; we’re working directly with a dealership that provides the work instead of an insurer directing work to us at discounted rates. The biggest thing is that we need to do it right, and being certified gives us access to procedures that other shops may not have. The emphasis on proper repairs also means we’re not dealing with time constraints or pressure to use aftermarket parts. We get to restore the vehicle back to the OEM specifications using OE tools, parts and trained technicians. Following the OEM’s instructions is the only way to do it.”
Dulles Coachworks specializes in “the automotive industry’s most discerning brands,” according to the shop’s website, which goes on to say, “The majority of these certifications are highly exclusive and only available to a select few repair facilities.” Currently, the shop is certified for Bentley, Aston Martin, McLaren, Lucid, Rolls Royce, Ferrari, Maserati, Tesla and Mercedes-Benz, and Robinson is working on his certification for Rivian, Porsche and Audi.
Not surprisingly, repairing such elite brands carries a heavy price tag. “The cost is definitely one of the main drawbacks of specialization,” Robinson acknowledges. “It can be hard for most people to get a grasp on the cost of the equipment required to stay certified. Just because you get certified doesn’t mean you can stay certified…it requires ongoing investments to upkeep the equipment so it continues working properly, attending training to understand the right way to repair and even comes down to strenuous requirements for the shop’s lighting. As the owner of a shop that specializes, my full-time job is taking care of our OEM certifications and making sure everything stays up-to-date.”
“Because you need to disassemble the whole car, it also takes a lot of space,” Burton points out. “Plus, you need to store the special tools for removing panels and other specific processes, and performing calibrations requires its own area. In major metropolitan areas, space is largely unavailable, making it really expensive.”
Although it’s undeniable that OEM certification is costly, there is definitely a tradeoff when it comes to the rates that certified shops command. “If you follow through wholeheartedly like we have, it will pay off in the end, 100 percent,” Robinson insists. “Equipment purchases are not necessary every year, but you cannot try to justify each individual purchase. You’re never going to make $170,000 back on a frame machine, but it’s required, so check the box, get the certification and charge appropriately. We charge a much higher rate than other shops in this market, but they can’t fix the same cars that we repair because only certified shops can get the parts. With seven technicians, we’re averaging $800,000 to $850,000 a month in sales.”
“OEM certification can cost a lot, but shops that specialize need to charge accordingly,” Burton concurs. “Every shop may not find specialization worth the investment…it truly takes a different mindset and a different approach than most of us are accustomed to, but vehicle owners need shops that specialize so that their cars are repaired correctly.”
And that becomes another tool in many shops’ marketing arsenal. In fact, Mike Anderson (Collision Advice) often stresses that capitalizing on OEM certifications is vital to success in today’s marketplace. He warns against the false assumption that getting certified will automatically bring customers to their front door. “Many shops expect work to show up at their door just because they’re certified, but you have to put the work in, position your OEM certifications and leverage them to the best of your ability.”
One way of leveraging OEM certifications is to educate customers on how choosing a certified shop benefits them directly. “Since the majority of what we repair is five vehicle makes, we’ve been able to refine our process,” Burton explains. “It allows us to speed up certain parts of the repair process since we know which types of repairs require which types of parts. We’re familiar with the tools and processes, and even though we research OEM procedures on every repair, we generally know what will be required in certain situations which enables us to better allocate our resources.
“In turn, that allows us to complete the repairs quicker, and by refining our word tract, we help the customer gain confidence that their vehicle will be repaired correctly. Customers are already contending with a stressful situation, and most find it reassuring to deal with a shop that knows what we’re talking about.”
Fortunately, many vehicle owners seem to understand that it takes a little something extra to repair their rides these days. “The majority of our clients are pretty educated because they know they’re driving something special,” Robinson says. “But at the same time, 99 percent of the work is insurance-based. Few of our clients are spending money out of their pocket, so we have to educate the insurers.”
For Robinson, that involves a straightforward conversation about what is required to repair these vehicles. “We have access to information they don’t, such as the OE procedures, parts systems, warranty times and so forth, so we’ll spend a little time having a conversation to educate the insurer, and if they ask, we can show them a copy of the procedures; however, if they don’t like the invoice when we give it to them, we’ll go the route of pursuing the Appraisal Clause to ensure our clients are properly indemnified for their loss.”
Burton recognizes that insurance companies are running a business with “different objectives than ours, so we try to educate instead of alienate, as Mike Anderson has always told us. Of course, some insurers want to learn, and others don’t, so all we can do is try our best. Our shop has chosen to work directly with the client because it’s not our car; the vehicle owner needs to be involved in the decision-making process, and sometimes, that means we find customers who are okay with things that don’t fit our business model. When that happens, we have the ability to say ‘no’ to the job. We’ve learned to accept that there are some situations where we just can’t help.”
Although strictly adhering to OEM requirements and guidelines may mean turning down some work, certified shops often find that there’s more than enough opportunities to offset those losses.
“Specialization has definitely allowed us to be more sustainable and more confident moving forward than if we just stayed on the path of repairing everything that came in our door,” Burton believes. “Focusing on specific makes and models allows us to get better at those processes which positively impacts profitability and makes it more predictable.”
Robinson sees certification as a way to maintain his independence and sustainability. “I’ve never wanted to be beholden to any single entity. I don’t have to worry about being told we’re not repairing vehicles fast enough or we’re charging too much. I’m completely independent from any insurance company, so I’m able to fix cars correctly. And because we’ve invested in multiple certifications, it won’t impact us too greatly if any one manufacturer were to go out of business. Overall, it creates more profit and security which makes the business much more sustainable.”
There’s another, rarely mentioned benefit to certification, according to Burton. “Since we mostly repair EVs and high-end cars, we’ve found that it’s a good marketing technique to attract more kids into the industry. Kids think technology is really cool, so we’ve attracted a lot of new talent to our shop just by promoting what we repair. We don’t have enough space for all the potential apprentices who are interested in doing this type of work!”
If these experiences have your shop leaning toward specialization, you may be wondering what else you need to consider. Robinson offers some advice: “Make sure you’re following what the OE says explicitly. Learn the p-pages, figure out what you’re truly owed, and charge for what you’re doing. If you don’t, the money you spent on certification will be a waste when you get audited and lose the certification. I’m also convinced that there’s no way for a shop to participate in a DRP and be certified; I just don’t see how the two can work in concert.”
But it is important to realize that your shops will have to partner with a local dealership to sponsor each certification.
“Find the makes in your area with the most value, team up with a local dealer and grow your relationship with them,” Burton suggests. “Don’t waste your time on the wrong stuff. Do the research so you’re focusing on what works within your market, and get local businesses to refer cars to you. Own your market by working with your local dealerships and rental car agencies.”
Robinson agrees that successful specialization is all about cultivating relationships. “Certifications take a lot of money, but it also takes a lot of people. The OEMs have to trust you, and that starts with getting sponsored by a local dealership. And you need to have a good relationship with them, or they won’t send you any work. Everything is about the relationships, not just tooling and training. If you don’t develop supportive relationships with the dealers, the money you invested is a waste because you will get nothing in return.”
