Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

The Value Proposition

As paint companies update their partnership programs they eye a greater role in the shop-insurer dynamic

Part two of INSIGHT’s look at trends in value-added programs

All of the paint companies are working to update and improve their value-added programs to tighten the bond with their customers by offering more than just paint. Last month, INSIGHT provided an update on several of these programs; this month we continue, with news from the PPG/AutoColor,NAPA/Martin-Senour, and DuPont/Standox/Spies Hecker programs.

And we examine the question of whether more dramatic changes lie ahead, as paint companies eye ways to play a greater role in the shop-insurer dynamic.

PPG Offers Menu Program

PPG’s MVP (Maximum Velocity Performance) program is among the most flexibly structured of the paint company value added programs. Unlike most of the others, there is no annual fee to join or participate. Instead, the program offers PPG users a menu of services - some fee-based- from which they can choose the offerings of most value to them.

Recently added to the MVP line-up of management training courses, according to PPG’s Mary Kimbro, is "Estimate Plus," a one-day class that "delves into estimating practices to help shops learn the best practices" and potentially increase profits. The course is scheduled to be offered in the coming weeks in Orlando; Hartford, Conn.; San Diego; Little Rock, Ark.; Pittsburgh and Sioux Falls, South Dakota.

More than 400 MVP participants belong to regional "Round Tables," in which 15-20 non-competing shops meet several times a year to share best practices, most recently focusing on cycle time and production improvements.

Also new this year is an employee satisfaction indexing service.

"We’ve done CSI within MVP for quite a few years now," Kimbro said. "But we’ve launched a new tool for our customers where we go in and let their employees rate their own satisfaction. There is a shortage of technicians, and we want to do everything we can to help our shops improve their own employee relations to help retain their staff. This tool allows them to analyze how they can improve their own employees’ satisfaction."

PPG also says it has expanded a core element of the MVP program: a shop benchmarking process based on its database of information from more than 3,000 shops. Two years ago, the company revised the benchmarking reports, making it easier to understand how a shop’s financial, production and other numbers compare with industry averages and the top 10 and 25 percent of the industry. In recent months, a paint shop performance assessment also has been added.

PPG also offers its customers facility layout and design services, and can help with current production flow analysis, expansions, and even Greenfield operations. Just this month, 3D renderings and animation have been added to MVP’s portfolio of design options.

"The benchmark covers the shop’s entire business, but the paint shop performance focuses on exactly what’s happening in the paint shop to really delve into the opportunities to improve processes inside the paint shop," Kimbro said.

PPG offers the same services in the AutoColor brand.

DuPont Offers Three Branded Programs

There are actually three value-added programs under the DuPont Performance Coatings portfolio: DuPont’s Assurance of Quality (AOQ) program, the Standox Partnership in Excellence (PIE) program, and Color Club for Spies Hecker users. Although they have many overlapping features, the three programs are distinct and will remain so, according to DuPont.

AOQ is the largest of the three programs, with more than 600 participants with combined sales of $1.1 billion, according to Tim Carmack, manager of the program. The program has a biennial fee of $500 and like many of the other programs includes such things as discounted CSI services, 20-group programs (called The Business Council), discounted business training courses, a shop operations manual, and marketing and point-of-sale materials. AOQ participants can also co-sponsor with DuPont a refinishing training course designed for insurance personnel.

Last fall, AOQ added an annual national conference to its line-up. More than 200 repairers gathered in Las Vegas for four intensive workshops on marketing, productivity, finding and keeping good people, and building long-term business value. Carmack said a survey of participants found that 98 percent said the event met or exceeded their expectations.

The Standox PIE program offers training and support in five key areas - marketing, finance, human resources, productivity and strategy, according to Mike McKenzie, manager of both the Standox and Spies Hecker programs. There are 200 members of the program, which has a $1,250 enrollment fee and a $550 renewal fee annually.

"Like college courses, PIE training grows successively more in-depth as the member progresses through the curriculum track," McKenzie said. "By offering support in a menu format, PIE offers the shop the flexibility to focus on training where it is needed and at a level appropriate to the current skills of its management staff."

He said a 20-group program would soon be added to PIE.

About 220 members of Color Club - all users of Spies Hecker - pay a modest $99 annual fee, although some of the program’s offerings are fee based; participation in one of the program’s Business Focus Groups (20 groups), for example, is $150 a month and business and management training courses offered through the program are $49 to $99 each.

In addition to benchmarking, CSI and consulting services, McKenzie said Color Club does have some offerings not found in most other paint company programs; some of its Business Focus Groups, for example, are designed for production managers, not just shop owners. The program also includes workers’ compensation and health insurance programs, computer training, equipment leasing programs and some travel benefits.

McKenzie said both Color Club and PIE programs also will soon offer more sales and promotional literature similar to that available to shops in DuPont’s AOQ program.

NAPA AutoCare Covers the Complete Parts-and-Paint Repair Picture

The NAPA AutoCare Collision Center Program, launched in 1994, currently has about 550 members. Membership costs $595 per calendar year, with first year fee prorated for a January 1 renewal. A Volume Rebate Program offers quarterly rebates on NAPA purchases.

According to Terry Mann, director of wholesale marketing at NAPA, "NAPA AutoCare is the only complete value added program in the collision repair industry, because NAPA is a complete source for both replacement mechanical repair parts, paint, refinish products, and shop supply items."

Mann believes the NAPA brand, program membership binder, which emphasizes marketing on a local level for independent shops, free member web pages at the popular NapaOnLine Internet site, and NAPA’s nationwide warranties are the top benefits for participating shops.

Both Mann and Al Temple, NAPA manager of business development, emphasize NAPA’s cornerstone membership benefit, a consumer 12 month/12,000 mile national warranty on repairs, good at over 10,000 locations nationwide. The use of the NAPA VISA card doubles the warranty period to 24 months/24,000 miles.

Other member benefits, according to Mann, are I-CAR and Martin-Senour training coupons, a technician recruiting program, Martin-Senour’s Profinisher, and the ability to sell NAPA’s "bumper to bumper" extended care warranty (up to seven years/100,000 miles coverage) at a price 40 to 50 percent below that offered by OE dealers.

Look for a "major enhancement" for participating independent collision repair facilities in early 2002, says Mann. A new component to the NAPA AutoCare Collision Center program is currently being developed and tested. "I can’t say any more than that right now," declares Mann, "but I promise that this is a major enhancement, a definite benefit."

CertifiedFirst Takes it a Step Further

But while all of the paint companies are making additions and incremental changes to their value-added programs, a number of them are also in the early stages of more dramatic changes.

PPG’s and AutoColor’s recently-introduced CertifiedFirst program stands apart from the bodyshop improvement VAPs. According to PPG, CertifiedFirst is a "loyalty program," designed not just to offer services to shops, but also to build a "branded" network of shops recognized by consumers and insurers.

"We wanted to build a program that would let consumers feel comfortable about a network of body shops regardless of whether they lived in Pittsburgh or San Francisco," PPG’s Kimbro said of the new CertifiedFirst program. "We want to build that brand through a network that stands for high customer satisfaction and high quality."

Since its launch last fall, over 1,000 shops have started the approval process for joining the network, according to Kimbro. The process includes an on-site audit - conducted by Underwriters Laboratories Inc. (UL) - of shop equipment. In addition, quarterly CSI reports are required. There is also a $2,000 annual fee, with reduced per-location fees for multi-shop operations.

CertifiedFirst shops must be using one of PPG’s top three product lines: Deltron, Global, or AutoColor 2K. All three have earned the Good Housekeeping Seal, a fact prominently displayed in the signage, consumer marketing and point-of-sale materials available for use by CertifiedFirst shops. The network is also being promoted through a national ad campaign and a website.

Participating shops are required to attend a course focused on improving customer satisfaction. They also receive a customized marketing report that analyzes potential business opportunities for the shop in their local area.

"A lot of shops do some marketing," Kimbro said, "but often don’t do it efficiently. This tool helps shops to fine-tune where to spend their dollars."

Other benefits of the program include group rates on property and casualty insurance, preferred equipment leasing and financing rates, discounted facility layout and design services, and discounted office supplies. CertifiedFirst shops will also be able to offer their customers the ability to track the status of their vehicle via the program’s website.

Marketing to Insurers?

By building such a branded network, could CertifiedFirst or potentially other paint company programs help single-location repair operations compete in the future with multi-shop and consolidator companies? In the UK, for example, Akzo Nobel has created a separate company that established call centers to take first notice of loss calls for insurers, make claims assignments to shops in its program and offer the insurer central billing.

"We are taking a close look at what we can do to enhance the shop-insurer-consumer dynamic," DuPont’s Fred Wissermann said of his company’s future plans. He said DuPont will soon launch a "comprehensive, solutions-based offering, accessible to all shops" that will include marketing services and management training and consultation.

"Members of AOQ, PIE, and Color Club would have preferential access, and we will continue to offer unique services that will be made available only to them," Wassermann said of the relationship between the new program and the company’s existing value-added programs. "However, all [participating] shops will be able to choose from a large menu of services."

Other paint company sources, speaking off-the-record, say they foresee more efforts by paint companies to market their customers to insurers.

"We see that as something in which shops will be more interested in future years," a representative of one company said. "Will we market to the insurance industry? I think we will," said another. However, until you have a network built, as PPG is doing with CertifiedFirst, there’s not a lot of marketing you can do to the insurance industry.   o

Feedback

Have a comment about this article? Send Email to Charles Baker, INSIGHT's Publisher

©2001 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?