Looking to increase profitability? The answer is simple, right? Repair more vehicles. Out of space? Start repairs outside or build another building. Not getting enough cars? Sign up for another DRP. It’s easy.
Of course, it’s not. But information can help. This information includes your business data, your market data, and data about your competition — it can all help you understand your customers, your processes, and opportunities to improve your profitability. You can use data to:
- Determine the right target market
- Market your shop more effectively, to that target market
- Take advantage of consolidation
- Adjust internal processes for better efficiency
Understanding your market
You need to understand your target market and the needs of the market. Insurance companies have always sent vehicles to your shop, and any shop could repair any car, but can they properly and safely repair today’s more complex vehicles? Do you have the right training? Do you need to be OEM-approved to purchase parts? It’s no secret that vehicles are becoming more difficult to repair and OEM certifications are gaining more prominence and they provide a great opportunity to differentiate and market your business. Not every shop is certified by every OEM — nor should they be. Data can help shops understand their market and which certifications will be the best fit for their business. Data can help collision shops analyze their markets to determine the most common brand of car, their competition, certified shops in their area, and dealerships in their specific geographical area. This will help to define a business strategy and create opportunities to determine if an OEM certification could create a competitive advantage in the market.
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You need to market the right way to reach your target audience. You want to invest your money in getting the best customers — those that will return, send their friends, and promote your business. Data can help you learn about the population and vehicles in your market. For example, if your market is largely luxury vehicles, your money may be better spent on fewer, more prominent and appealing ads, versus mainstream vehicles, which are more highly available to the masses and can be owned by a wider variety of customer. Those car owners are better marketed to similarly to the vehicle availability — commonly and widely.
"Consolidation" is the buzzword of the 21st century
And for many small businesses, it’s the subject of nightmares. With data, though, shops can navigate consolidation to their advantage.
- Considering selling your business? How do you make your business desirable to a consolidator? Data can help you understand what differentiates you in the market and what the consolidator may be missing in the market. Do you need to fine tune your business model? Is your shop the only one certified by an OEM a brand where you can dominate the market in repairs to that brand of vehicles? Are you marketing that differentiator and can you demonstrate the value of that certification? Do you know where and how to find the data to demonstrate the values? Demonstrating that marketable difference with data can make your shop more desirable to a consolidator if you wish to sell.
- Looking to partner? Find a shop that complements your own. Perhaps you are already certified by luxury brands and don’t work on mainstream vehicles, but you know some of your customers also own mainstream vehicles that you want to accommodate. A complementary shop will bring in a different audience to your shop. Data can help you strategically identify a prospective shop in a nearby market, surrounded by luxury vehicles, that is certified mainstream brands and doesn’t have the equipment or training to work on luxury vehicles. If you partner together, they could market and send luxury vehicles to your shop and you could get more business by sending the mainstream vehicles to your new partner shop.
- Looking to compete with consolidators? Find your niche and differentiate your business to make yourself more competitive. Look at your competition, are they dealers, independents or MSOs? Are they OEM certified? Understanding this information will help you determine the business strategy that will differentiate your business in the market. You may want to consider an OEM certification program, and your data will help you evaluate the various programs and their fit with your business model. Data can be leveraged to show you how many vehicles are in your market, the dealers that don’t have collision centers and the number of shops certified to repair those vehicles. If you are considering certifications, look at the market data and your business data. What vehicles do you repair today? What is your competition doing? What would happen if you lost that brand? Take a look at the nitty gritty details with your business development manager and find the most commonly registered vehicle that does not have a nearby certified collision shop — that is your sweet spot. If there are 5,000 of a specific vehicle in your market, no certified shop within a 100-mile radius, and you have experience with that brand, becoming certified could practically guarantee you increased business with the right marketing plan. When a household has an exceptional customer experience at your shop, they will bring you their other vehicles when the time comes too.
Nothing beats customer service and high quality, trustworthy repairs
Once you have the traffic coming to your shop, the key is to keep it. The best customers are returning customers and those that refer your business to friends. Tracking internal data of CSI, cycle time, and touch time — and working to improve them — will leave you with happy customers. Tracking KPIs is an important first step in understanding the fine details of how your business truly operates. The BASF Vision+ Analytics software tool uses data that shops already have to identify pain points such as labor and paint profitability.
The more data you have, the more accurate your view of the operations is and the more accurate your fix can be. V+ Analytics also allows you to pull reports that can show influencers of your KPIs — you can see that cycle time was lower the first week of the month and see a correlation that your new prepper was on vacation that week, or your touch time was up when you hired a second prepper. These details can lead you to informed business decisions for the future of your business. Making changes based on data can lead to consistently lower cycle time and higher touch time, making your shop more desirable, which, in turn, leads to happier customers.
Another helpful aspect to all of this data is having the right industry partners to analyze and understand this data. Whether its your paint supplier like BASF or learning sessions put on by SCRS or other industry organizations or a Performance Group that you are involved in, more insight into your data can lead to better business decisions and improved customer satisfaction and retention.
The key to success is knowing your data, understanding your data, and knowing how to utilize the data. If you order parts, measure paint, capture supply use, and record timing during repairs, you have more data than you realize. Your next step is getting the data into an easy-to-use format and analyzing it to improve your shop processes and make your business standout in the market.