ColorVision helps collision shops improve paint and materials profitability
Springfield, Mo.—In the collision industry, it seems there are three things one can count on: death, taxes, and the rising cost of paint and materials each year.
Although insurance companies periodically raise the rates that shops can bill for paint and materials, they lag behind the increased cost from manufacturing down to the end-user.
But with little effort, shop managers and owners can track and improve their paint and materials profitability, said Connor Allen, chief development officer at ColorVision, a PPG Platinum Distributor with headquarters in Springfield and branches in Independence and West Plains, and Lawrence and Lenexa, Kan.
“The way our industry is going, we like to help bring awareness to the benefits of tracking these metrics,” Allen said.
The company’s ColorVision Profit Management (CPM) program, available at no charge to participating ColorVision customers, can point to needed improvements, he said.
As one example, Allen said, an analysis can help show that the shop has low profitability on paint and materials because it is restrained by a paint cap from an insurance company.
“Let’s say the insurance company is willing to pay for the procedure you have to do, but they have a paint cap,” he said. “We are then able to go into the PPG Paint Manager and run some invoices on the capped colors they could have captured extra income on.”
The caveat, of course, is that the shop must be mixing all liquid material across the scale, but most ColorVision customers interested in CPM already do that, Allen said. And going forward, that will make it easier for the shop to capture lost income by submitting a supplement to the insurance company for the actual cost — and markup — of the paint and materials used on a job.
“They have to mix it anyway, so they might as well capture the data,” he said. “It’s really easy for us to go into PPG’s Paint Manager and go into the PPG Report Viewer and print off an invoice for a repair order. As long as there’s documentation, the insurance companies are much more compliant.”
Allen said he joined ColorVision full-time in 2012 after graduating college, with CPM as one of his first projects for the company. He rolled it out at the end of 2012, with the program becoming more robust in 2014 as more data became available for analysis.
“For anything to be statistically relevant, you need quite a bit of information,” he said. “So not only do you need more shops on the program, you need a lot of history from those shops.”
Because he built the program and has kept its development and management in-house, Allen said he’s been able to add functions to the next month’s report to meet shops’ requests.
Allen said CPM is an outgrowth of Gauge for Success, a program Allen’s father, Owner Gary Allen, introduced eight years ago as an expansion of PPG’s MVP Benchmark Analysis, which provides nationwide industry averages and benchmarks on key performance indicators (KPIs) such as the sales mix and gross profit for labor, parts, materials, and sublet repairs. That popular program is still available and uses a dashboard to show how the shop compares to top performers.
Besides requiring less interaction from the shop manager or owner, CPM — which also displays the data in an easy-to-read dashboard format — was designed to provide simplified reports customized to local and regional markets with an emphasis on paint and materials profitability, Allen said.
“The easier it is for them and the less time they spend to get their numbers, the more time they can spend improving them,” he said. “We still put up those national benchmark numbers because we want everybody to be aware of it. But as an example, the average R.O. is obviously quite a bit different around here than what the national R.O. average is. We show the national average or benchmark for everyone to be aware of what is, but then we do our best to show ‘this is what’s happening in our neck of the woods.’”
ColorVision business development managers use data captured in ColorVision’s management system to suggest areas needing improvement, Allen said. They might recommend a different process or additional training, as found in PPG’s MVP classes.
“When we’ve recommended MVP classes to help in one area, it’s often been that they might pick something up from that class that helps in another area,” he said. “Maybe we sent them there to help with one area, but a byproduct is they picked up two or three tips that helped with other things.”