CARSTAR Leadership Discusses Consolidation, MSO Trend - BodyShop Business

CARSTAR Leadership Discusses Consolidation, MSO Trend

After wrapping up their annual conference Sept. 24-27 in
Seattle, Wash., that hosted nearly 400 insurers, vendors and franchisees, the
leadership of CARSTAR stated in a recent teleconference their belief that
consolidation and the MSO trends in the collision repair industry remain

"Industry consolidation is continuing, with MSOs
like us adding to their networks while independents continue to shrink,"
said CARSTAR CEO David Byers. "As the largest MSO in North America, we
feel we’re going to disproportionately benefit from this consolidation."

CARSTAR last year stated its belief that 4,000 to 5,000
shops closed in 2010, and senior marketing executive Bill Garoutte said that they
believe the closing rate hasn’t changed.

"It has maybe accelerated slightly because of the
frequency numbers not going up," said Garoutte. "There is not as much
work out there, and there is a move toward the MSO model in the insurance

Byers said insurance companies are increasingly favoring
doing business with MSOs and want several things:

• Concentrated scale

• Self-management

• Outstanding KPIs

• Single point of contact

"They want to work with fewer providers, they want
to give us metrics to hit and let us manage hitting them, and they want the
ability to call one person for their needs, not 400 individual locations,"
Byers said. "We believe we have the best cycle time, severity and length-of-rental KPIs in the industry, and we believe this is due in large part to us
being owner-operators, where it’s our own blood, sweat and tears in the
business versus the company guy who works 9 to 5."

To track those KPIs, CARSTAR is continuing its rollout of
a new customized management system powered by Mitchell that will allow
real-time reporting of KPIs to insurers, franchisees and CARSTAR Corporate on
an on-demand basis.

CARSTAR has also boosted its business development staff
with an eye toward opening 40 to 50 new stores in 2012. That number, CARSTAR
said, is two to three times what it has been over the last several years due to
a stronger focus on this area and a doubling of their business development

Even though CARSTAR said its same-store sales on average
are double what the rest of the industry is doing, Stacy Bartnik, vice
president of field services, said the organization is still pushing hard for
organic growth within existing stores and moving more stores toward a lean
business model with improved KPIs.

"The main goal for the service team is the drive for
operational improvement," said Bartnik.

Gerald Wicklund, the second-generation owner of
Wicklund’s CARSTAR and Glass in Liberty, Mo., which has the distinction of
being the first-ever CARSTAR franchise, came away from the conference with the realization that his shop has to increase its marketing efforts.

"I realize now that we need to put together a team
to do our marketing," Wicklund said. "That includes a social media
person, a website person and a video person. Also, the more estimates I write,
the more I’m finding out that people are turning to the Internet for research.
Roughly 25 to 30 percent of my customers coming in the door have done research
online about body shops and the collision repair process." 

More information:

CARSTAR Execs Predict Continued Tough Times in 2011


You May Also Like

Deadline for Busch Memorial Scholarships Approaching

Two scholarships will be awarded to students pursuing a collision career.

The ASE Education Foundation announced that the deadline to apply for the Michael Busch Memorial Scholarships is March 31. Presented by the foundation, two scholarships will be awarded for the 2024-25 academic year to students pursuing a career in the collision industry.

Qualified applicants should be graduating high school seniors or have graduated from high school or received a GED certificate. In addition, applicants should be enrolled or planning to enroll as a full-time student in a two- or four-year college or university or in an ASE-accredited post-secondary collision repair program.

Body Bangin’: Stand Out in a Consolidator’s Market with John Shoemaker

Micki Woods interviews John Shoemaker of BASF on how to be “elite” in a consolidator’s market.

Body Bangin’: Can Loaner Vehicles Be Another Revenue Stream?

Micki Woods interviews Laura Tierney of on turning loaner vehicles into a new profit center for your shop.

Protect Your Shop from Cyber Crimes with Mark Riddell

Micki Woods interviews Mark Riddell of m3 Networks Limited on what auto body shops can do to protect themselves from a cyber attack.

Body Bangin’: The Disengagement Epidemic with Kevin Wolfe

Micki Woods interviews Leaders Way Owner Kevin Wolfe on why 73% of work professionals are disengaged today and what we can do about it.

Other Posts

Body Bangin’: I Thought We Were Doing It Right with Josh Piccione

Micki Woods interviews Josh Piccione on repairing vehicles correctly — according to manufacturer guidelines.

Body Bangin’: Be a Star Not a Hamster with Robert Snook

Micki Woods interviews popular keynote speaker Robert Snook on how to differentiate and grow your business.

Body Bangin’: Know Me, Know My Car with Mike Anderson

Micki Woods interviews Mike Anderson on the importance of building an emotional connection with your customers.

Body Bangin’: Fighting for Consumer Safety with Burl Richards

Micki Woods interviews Burl Richards on his personal mission to fight for consumers’ rights and safety.