RECESSION-PROOFING YOUR SHOP

Dennis McCarron shares industry insight on how to protect your business

By KACEY FREDERICK

SINCE THE PANDEMIC, Americans have feared another recession on the horizon. Dennis McCarron, a partner at automotive brokerage firm Cardinal Brokers, spoke to FenderBender about what a recession would mean to shops and how shop owners should respond.

It’s assumed that the auto industry in general tends to be resistant to economic downturns, as most consumers will always need transportation.

“When the economy goes down and people pull back on their spending, they still have to go to work, they still have to pick up their kids, they still need a mode of transportation,” McCarron says.

With a lack of adequate public transit and a long-standing “love affair with independent transportation,” as McCarron puts it, most Americans will not, or cannot, choose to give up their vehicle. This also means people hold onto vehicles for longer amounts of time, resulting in more repairs needed and profit for auto shops.

Though the auto industry remains an essential service for most people, shop owners will still see the effects of a recession with more people skipping out on necessary repairs.

Most people do not budget for automotive repairs and maintenance in the United States, McCarron points out. It’s typically something that comes out of emergency funds or money stowed away for vacations or other nice things.

In the case of a recession, as the cost of everyday essentials increases, people are not as willing to pay for repairs if they feel it isn’t urgent or necessary. Businesses will see their average repair orders decrease as people put off minor repairs due to financial issues, resulting in less profit for shops.

There are things that shops can do to help themselves before a recession hits: they must take care of their customers.

“You have to develop a reputation as an honest, dependable, reliable business [so that] people will feel comfortable coming to you even when money is tight,” McCarron states.

McCarron says that one of the best things someone could say about a business is, “they’re expensive, but…” The worst thing a business could hear from the customers is “every time I come in here, it’s a thousand dollars.”

“To someone not in the industry those two things may sound like they’re the same type of sentence, but they’re not,” McCarron says. “One is representative of ‘that business charges a lot of money, but they always do good work.’ The latter is a representation of very aggressive over-selling: trying to force sales onto a customer.”

And that is the worst thing a shop can do: become pushy with customers. Mc -

Carron says it’s “never a good thing for a shop to do.”

The job of a shop is to inform the customer of the state of their vehicle. They need to decide from that point. Shops must know how to accept “no” as an answer and not let a potential rejection stop them from telling the customer about issues with their vehicle.

“My job is to help keep you informed and then educate you on how to properly maintain this vehicle, but I’ll never cross that line and tell you things like ‘you have to do this,’ or use safety as a weapon,” he warns.

Shops must make their customers feel they are in control. Interactions cannot simply be transactional. The biggest way to gain attention is through word of mouth, which is why taking care of existing customers is essential.

There are more initiative shops can take on their end to attract new customers, too.

Getting involved with the local community will spread the business’ name and associate it with being a positive influence.

McCarron has plenty of ideas for such involvement, such as “local community projects like Girl Scouts, Boy Scouts, [events with] the town, maybe a church or a synagogue—any kind of local grassroots event.

“... I think you need to get involved and just make people aware that you exist,” he adds.

If shops are confident that they are offering quality service at a fair price, they shouldn’t be concerned with cutting their prices and should especially not consider cutting valuable technicians. Doing so would be “cutting off your nose to spite your face,” McCarron says.

Instead, they should focus on maximizing efficiency and productivity. Systematizing and finding the “rhythm” of the shop, as McCarron describes it, helps move business along faster, such as telling customers specific pick-up times instead of vague phrases like “end of the day.”

When people come in, shops should “interview the customer.” When they bring a vehicle in and they’re asked questions about the problem, if it’s a problem that the shop is not equipped to resolve, they can avoid wasting valuable time looking at a vehicle that they can’t even work on.

Systematizing the process, community involvement, and customer outreach: these factors can help a shop establish a growing customer base, even if times are rough–because people will always need cars fixed. Remind your community you’re there to take care of them and have systems in place to ensure every customer is satisfied.

THIS MONTH’S FEATURE story is about mentorship, specifically the kind that comes from fathers and grandfathers who established their family’s tradition in collision repair. Legacy stories in the industry are nothing new.

However, according to the results of the 2022 FenderBender Industry Survey, they’re the minority.

Collison repair equipment provider CarO-Liner has announced it is celebrating its 50th anniversary this year, according to a press release.

The company will celebrate with a temporary celebratory logo design, with plans to celebrate in other ways throughout 2023 as well.

Founded in 1973, Car-O-Liner specializes in providing “alignment and straightening systems, joining and heating equipment, measuring systems, workshop solutions and testing and calibration systems” as well as training for those in the collision repair industry.

Tim Garner, Car-O-Liner’s market development manager, is proud of the success the company has seen throughout five decades.

“From alignment and measuring equipment to state-of-the-art ADAS calibration, Car-O-Liner continues to lead the industry as we enter our next 50 years,” Garner stated. “We thank employees past and present and our loyal customers for being part of Car-O-Liner’s successful journey.”

CCC Intelligent Solutions Inc. (CCC) has released its 28th-annual Crash Report detailing “trends impacting the P&C insurance economy,” Business Wire reports.

The report was created based on “more than $100 billion in transactions processed annually through CCC’s solutions by its 30,000 customers,” and “more than 280 million claims-related transactions, 50 billion driving miles of driving data, and millions of bodily injury and personal injury protection (PIP)/medical payments (MedPay) casualty claims.”

The report outlines how the industry is experiencing a lot of technological advancement while also going through economic difficulties related to “inflation, supply chain constraints, and labor shortages.”

With the shortages in labor and supplies, it poses a challenge for the industry as a whole to keep up.

Jason Verlen, CCC’s vice president of product marketing, said that economic issues are “putting pressure on an industry that is simultaneously managing through major advancements in vehicle technology, including the growing popularity of advanced driver safety systems (ADAS) and EVs.”

Verlen cites this as the reason for the report’s subtitle of “The Era of Experience:” to reflect an industry that is faced with a wave of change and doing its best to work through it.

Crash Champions has opened its 25th Ohio location, according to a press release.

The Avon, Ohio, shop at 38401 Chester Road opened its doors to the public on March 20.

The company first entered the area in 2020, according to Crash Champions Founder and CEO Matt Ebert, who said that since then, the company has wanted to make an effort to be involved in communities while providing good service.

“ … Crash Champions has made it our mission to deliver high-quality collision repair service while also engaging with local communities,” Ebert stated. “The opening of our Avon repair center is part of this important effort.”

Crash Champions’ 25 Ohio locations are part of the company’s over 600 locations spanning 36 states and the District of Columbia.

Chariot Collision Center, located in Kokomo, Indiana, has joined the 1Collision network, according to a press release.

The shop is a part of north central Indiana’s Chariot Auto Group. In November 2022, Chariot representatives met 1Collision President and CEO Jim Keller at the SEMA Show in Las Vegas, where they felt that joining the network would be beneficial for their business.

Ric Pugmire, Chariot’s director of collision operation, has stated that the company values “providing world-class customer service and investing in employee education and training.”

“To accomplish our goals, we knew we would need access to the kind of resources and relationships the large MSOs have access to,” Pugmire said.

As a 1Collision partner, Chariot now has connections through 1Collision’s network of industry experts. Pugmire said that it’s beneficial for their business to connect with other shops in the 1Collision network that are experiencing the same obstacles they are, and “to work cooperatively with our peers as a network because we aren’t competing.”

Following the decision to become partners, Chariot plans to meet with the 1Collision field operations team to discuss “collision repair business systems.” Chariot also intends to reach out to others in the 1Collision network about issues such as “certifications, training, front office tasks and staffing.”

Fix Auto USA has announced the opening of a new location in Tujunga, a neighborhood in Los Angeles, according to a press release.

Fix Auto Tujunga, located at 7001 Foothill Boulevard, is owned by Kevin Tarverdyan. The 4,500-square-foot facility will employ four individuals, with more to be hired in the future. It is an I-CAR Goldcertified shop, and will soon be I-CAR Platinum certified as well.

Owner Tarverdyan has nearly 20 years of experience working in the insurance industry and has a passion for automotive work. He became interested in pursuing a career in the automotive field when someone close to him that worked in the auto repair industry recommended that he pursue it.

As a shop owner, Tarverdyan said that he will ensure every vehicle worked on is treated with the utmost care.

“I treat every car that comes through our door like my own car,” he stated. “I take pride in being ‘too picky’ in order to ensure our team is fulfilling requests to the best of our ability.”

Two CARSTAR Collision Clinics located in Edmonds and Bellevue, Washington, have been sold to Puget Collision, according to a press release.

Bruce Lingle was the owner who put the two stores up for sale. He started as a technician before putting 44 years into growing his MSO, beginning with the Edmonds location.

Lingle said there were “multiple bidders” but believes he “received the best value for my business.” Following the transaction, he plans to retire.

“After spending my career in the collision industry, I knew it was time for me to step back and enjoy spending more time with my wife, family, and traveling,” Lingle stated.

Puget Collision’s acquisition of the two shops marks 23 locations owned by the company “throughout Washington and Oregon.”

The principal of the firm representing Lingle, Focus Advisors, said that the sale “is representative of the continuing opportunity for owners” to take advantage of having their businesses acquired “at attractive valuations.”

After a truck owner in Hudsonville, Michigan, had his vehicle damaged in a car wash, a local collision shop reached out to help— though the driver ended up receiving more help than he expected, WZZM 13 reports.

Will Tabaczka is the owner of Xtreme Auto Collision Repair, located in Holland, Michigan. When he happened upon a story about a man’s truck getting damaged inside a Tommy’s Express Car Wash, he wanted to reach out and help.

He wrote an e-mail to Bob Shaheen, the owner of the truck: “If Tommy’s is not willing to pay for the repairs, I would like to personally repair the vehicle at my own expense,” it read.

Tabaczka met with reporters at Shaheen’s home in an attempt to surprise him. He hid outside while they did a followup interview with him, but it wasn’t long before Shaheen revealed a representative with the car wash had already contacted him, apologizing and offering to repair his truck at no cost to him.

Shaheen informed Tabaczka that he already made an appointment as soon as he came inside and said his offer. Though he won’t be involved in the repairs, he is in contact with Tommy’s to ensure a timely repair for Shaheen.

“I’ve had people step into my life, and it’s changed my life for the better, and I just always try to pay it forward in any way I can,” Tabaczka stated. “I wanted to step in and make it a positive experience.”