In a couple of previous columns, I shared some concepts shared with me by Mike Giarrizzo, CEO of DCR Systems, which currently operates eight collision repair shops in four states in partnerships with auto dealers. Here are a few more of his thoughts that I thought were relevant to share with the industry.
Build from within. “What’s pacing our growth is our ability to develop people,” Mike told me. “At all levels. The leadership level, the technician level. We have a philosophy to build from within, because we do things so differently. Taking an experienced shop manager or technician and trying to plug them into our environment in most cases just doesn’t work. Unless you have someone who has been around the traditional world so long they are fed up with it and looking for a better way.”
Insurers shouldn’t argue with shops about the OEM repair procedures. Mike told me that he participated at a Collision Industry Conference meeting in a panel discussion about why shops and insurers don’t always see eye to eye on ADAS-related procedures at the repair planning stage. “It was comical because I don’t know any other answer other than to read the manufacturer’s work instructions,” Mike said. “One of the insurers said, ‘Well you’re got to use common sense, too.’ I said, whether I have the opinion that a manufacturer’s work instructions is overkill or designed to [limit their liability] or whatever doesn’t matter when it comes to repairs. If there’s a situation where an insurer thinks that, that the manufacturers work instructions are not necessary, then that’s a discussion between those who make the car and those who insure the car.”
Mike believes that now more than ever, insurers need to recognize that not all body shops are the same.
“You still have insurers out there trying to push an outdated mentality that, ‘We owe a market average repair,’” he said. “How does that make any sense when the capabilities of shops today have never been more widely varied? You have everything from the straightening shop, the mud shop, to a certified repairer. A completely different ball game.”
Specialization is inevitable. Mike said that rather than segmenting repairs within a shop by light, medium and heavy hits, it’s becoming increasingly obvious that teams will need to be focused on a particular brand or two of vehicles, given all the training and equipment requirements.
“We’re seeing a huge benefit in our single-point stores,” he told me. “We have three of those stores. Two Toyota stores and a Honda store. They are doing 90 percent either Honda or Toyota work. Month in and month out, they’re on the top of our performance charts.”
The repetitive processes get continually improved under that model.
“Exactly,” Mike said. “It’s not that you won’t be able to fix any other cars, but you’re going to be honed in on the brands you’re trained to repair. The pure independent that’s just taking vehicles from a DRP or their own customer base…a Toyota one moment and a Honda next, and then a Ford…that becomes more and more challenging.”
Does he see any way the traditional DRP model can survive when that level of specialization is becoming necessary?
“I think the days are numbered, I really do,” he said. “I think we’re going to see a really changed world in the next five years.”
Stay the course. Mike has a genuine belief that his company’s business model benefits all the stakeholders involved. But that doesn’t mean it’s easy; it still requires a lot of work and determination.
“I tell my people over and over again: We all need to believe strongly that if we do the right thing for the right reason, good will come out of it,” he told me. “I tell them: I know it’s not easy. It’s a lot easier just to take a path of least resistance. But we’re changing an industry. We’re leaving a mark and leaving a legacy. I’m super-proud of that.”
It’s been my pleasure these past four years working to bring you ideas (like those shared by Mike) and best practices for your business through this column. I’m now turning this space over to some new voices.
But I’ll end by echoing Mike’s words: Stay the course. Keep working to do the right things for the right reasons.
