Strategic Planning Creates Sustainable Business for Years to Come
The old saying “A rising tide floats all boats” would certainly apply today in the collision repair industry. With record collision repair volume, the collision repair industry is stretched beyond capacity. That means that some body shops are taking overflow work from collision repair facilities who are on DRP programs.
While this sounds like a “win, win” situation today, this presents several challenges over time.
First, these independent body shops are trying to meet DRP repair demands, without the knowledge and resources needed to successfully manage DRP relationships. The insurance carriers have an expectation that these body shops can deliver the repair efficiencies, cost containment and customer satisfaction they demand, but many of these shops don’t have that level of sophistication or experience.
This puts these independent body shops in a position where they are chasing dollars from the DRP, but not able to profitably manage the work for their bottom line. And they are also trying to please a customer who expects a seamless repair experience from their insurer. These shops may be busy, but they are likely paying a higher rate for parts and materials than those in a collision repair network. They may also be struggling to keep up with the OEM certifications and training needs required to repair a range of today’s vehicles.
Second, an independent body shop riding the high tide can be so focused on the surge of work they forget to cultivate alternative sources of traffic for when the tide goes out and the DRP overflow work on which they’ve been dependent has dried up. Two years ago, independent body shops were crying for work and many took a stance against DRP business. Now, they are trying to embrace the DRP model, but like a fisherman chasing the “big one”, lose sight of all the other fish in the ocean.
That’s why it is important to create a strategic plan for high tide, low tide and everything in between. Creating a diversified mix of customers and traffic drivers helps ensure a steady stream of work, rain or shine.
CARSTAR, North America’s premier network of independently-owned collision repair facilities, can help. CARSTAR provides collision repair facility owners the opportunity to independently own and operation their locations, but with the boosted support of the CARSTAR brands, guidance and resources.
CARSTAR helps its collision repair network members create the smart navigation plan for any climates.
Initially, CARSTAR helps develop a balanced traffic matrix that evaluates the technician skill level, equipment needs, average repair order, margins, KPI/operational requirements and customer expectations for each category of traffic source.
Then, CARSTAR strategically maps these traffic sources – rental car companies, dealerships, fleet, small/midsize/top 10 DRPs, electric vehicles and OEM repairs and customer pay against local business opportunities.
From that, CARSTAR and the collision repair facility create a navigation plan for all circumstances. This unique approach accounts for the facility’s strengths, identifies areas for improvement, outlines the equipment and training needs, helps determine potential new customers and installs a thorough quality repair process with measurable milestones and results throughout each repair. With these key elements in place, CARSTAR helps the facility achieve OEM certifications and DRP relationships that deliver sustainable business.
During high tide, this approach allows the collision repair facility to balance the surge in demand with timely, efficient production processes that keep an eye on the bottom line. During the dry season, it leverages repair traffic from repeatable, non-cyclical sources. This gives the collision repair facility the ability to navigate any conditions successfully.
CARSTAR Offers Five Resources for Navigating the Shifting Tides
Performance: The average Collision Center increases their sales more than 20%* in the first 12 months of joining CARSTAR. Our independently owned collision center owners benefit immediately from a partnership with CARSTAR. In addition, 53% of our North American locations are part of an MSO group, making us one of North America’s largest MSO networks. We also offer the highest quality repairs and customer satisfaction in the industry, backed by a nationwide warranty.
Insurance Relationships: CARSTAR leads the collision repair industry in direct repair program (DRP) relationships that drive consistent traffic to your door. CARSTAR members benefit from nationwide DRP programs including national insurance liaisons with each insurer, central review desk, and focused coaching for each DRP program requirements.
Strong Purchasing Power: Under the Driven Brands umbrella, CARSTAR has a dedicated team that negotiates contracts with more than 50 vendors and suppliers, providing industry-leading discounts and rebates (ranging from 2.5%-10%) for your business. Paint, equipment, technology and more are needing to be purchased every day by collision center owners to stay up to date. With CARSTAR as your partner, you can be rewarded for these purchases, helping you save money.
Operational Resources: The CARSTAR operations team across North America provide experienced support for your business, from expanding to a new location, improving your processes and operational efficiency, offering new services and increasing your performance and profitability. The proprietary EDGE Performance Platform provides the guidebook for managing your business and delivering new levels of success.
Training and Education: CARSTAR prioritizes training and education for CARSTAR network members and their teams to ensure you are prepared to deliver the highest-quality repairs. With market-specific business groups, regional training programs, dedicated OE and I-CAR certification initiatives and the exclusive CARSTAR collision repair curriculum of in-person and virtual training programs, you can affordably and easily access all the training programs you need for your entire team.
Brand Recognition: CARSTAR’s brand recognition across North America represents the premier collision repair to our valued customers and insurance partners. The CARSTAR brand is known for trusted high-quality repairs, community philanthropy and collision repair industry leadership.
Maintaining your independence doesn’t mean having to go it alone. With CARSTAR, you have the resources to grow your business and drive your success, but retain your ownership and continue to build your legacy and leadership for generations to come.