Thornton, Colo.--Becoming too reliant on any single source of revenue is dangerous practice for any business. Although Gene Kloke, president of Autoworks International, participates in 11 insurers' direct repair programs (DRPs), he said he aggressively pursues business through outside sales efforts, garnering an extra two or three vehicles a week.

"I've been in marketing and sales my whole life," said the 70-year-old Kloke, who co-owns the business with his wife, Brenda. "Customer service is all you have to sell. I don't care what product you have."
Approaching his daily sales activities with the enthusiasm of a man decades younger, Kloke said he calls on insurance agents, fleets, and local businesses daily, which adds up to about 25 percent repeat business or customer-pay work each month.
The sustained sales effort is possible because Kloke said he entrusts Jerry Cathcart, the shop's general manager, to run the production in the shop while he concentrates on overseeing cash flow, accounts payable, and receivables.
Kloke's sales mantra is "never give up."
"They'll test you to see if you want their business," he said, adding that repeat sales calls are necessary to renew the relationship. "If you're out of sight, you're out of mind."
Having worked in other industries, he noted that the collision repair business is unique.
"We're like a funeral home," Kloke said. "You don't want to know us until you have to. When customers leave, we say jokingly, 'We hope to never have to see you again.'"
On vehicle delivery, each customer receives a warranty holder, with Autoworks' logo and contact information printed on it and the paperwork neatly folded inside, Kloke said. Many customers store it in their vehicle's glove box and pull it out when another service is needed, he said.
Getting customers to the shop is only half the battle, Kloke said, adding that they must be treated fairly and their vehicles must be repaired properly to make a lasting impression.
"When DRPs don't allow you to repair the car correctly, we don't do business with them," Cathcart said. Some insurers may demand that you repair a part when the manufacturer insists on its replacement, he said, pointing to the hood on a Volkswagen Toureg as an example. "VW dictates the three-ply hood be replaced, not repaired."
Repairing the vehicle correctly begins with a good estimate, he said, adding that there are several quality control measures the shop takes during the repair process.
Before each vehicle enters the paint booth, the original estimate is revisited, he said. After paint, the vehicle is pulled outside of the shop into the sunlight to inspect items such as blended panels. 
On delivery, every vehicle receives a courtesy wash, Kloke said. "We try to make it cleaner than when it came in." That makes a lasting impression on the customer, he added.
"The biggest reason for line-item audits is that it makes it easier the day the car is completed," Cathcart said, which ultimately allows them to balance any supplements on the repair order while meeting DRP repair time requirements.
A big part of maintaining those times while completing quality repairs and maintaining profit lies with parts procurement, Kloke said. That is why he said the shop has a dedicated parts manager, Jami Cathcart, Jerry Cathcart's sister.
Jami Cathcart checks the parts on arrival, making sure they're the right ones, there's no damage, and then confirms the order with the shop's five bodymen, Kloke said. She also stays on top of returns, which can tie up substantial resources if unattended to, he said.
"Every part that comes in the door is checked in," Kloke said, adding that this, in part, has reduced their return rate to 3.2 percent when the industry average is approximately 18 percent.
The shop uses a combination of OEM, aftermarket, and recycled auto parts but prefers aftermarket parts, Jerry Cathcart said. "We're in business to make money," he said, adding that he can achieve a 45-55 percent gross profit margin on aftermarket and recycled parts. The shop's main supplier for aftermarket parts is Keystone, Collins Collision Products, and Eagle Industries, he said, and for recycled parts he relies on Stadium Auto Parts for domestic, Central Foreign Auto Parts for imports, and LKQ out of Omaha, Neb. "If they say a panel has an hour dent, it's an hour dent," he said of LKQ's estimates of the time needed to repair a slightly damaged part.
In addition to the profit margin, recycled parts often come with attached parts that would otherwise have to be purchased, Cathcart said. For example, if he purchases a recycled door, it may come with a good lock rod and run channel, he said.

A trend that drives the use of aftermarket and salvage parts is that one out of every three vehicles that make their way to Autoworks are totaled, Cathcart said. This is due, in part, to the rapid depreciation of some vehicles and the cost of OEM replacement parts, such as airbags and customers with older vehicles.
"We will work with customers who have older cars," he said, and install used or aftermarket parts to fix it. "We try to do what's best for the customer in their situation."
Kloke said he'll purchase OEM parts only from dealerships willing to work with him in picking up returns. He said he prefers to work with dealerships that run their own delivery trucks because the drivers are more conscientious in checking for return parts. An accumulation of return parts can quickly put the shop in a position where it has exceeded its credit limit, he pointed out.
Cathcart said his two painters spray PPG's ICI Autocolor, which they purchase from FinishMaster. "We choose to do business with them because of their service," he said. "They do a good job for us and take care of us." ICI has very good clear, he said, adding that their color match on pearl is amazing.





