Transparency And Trust: Overcoming Negative Price Perception, an Interview with Art Shaw, CEO of RepairPal
Culture, Manifestation, and the Desire to do good
"I have built a framework from the best of everyone I ever paid attention to, and I don't read many books. I don't have a lot of time," Art smiles as he explains that he has a simple paradigm that has defined the RepairPal culture, "the right person doing the right job." Art meets every person during onboarding to ensure this value system remains the focus and cites their approach to people as the reason they are a 2021 Inc Best Workplaces Honouree: "effective teams that are fully remote."
The MAPConnected Vehicle Service and Warranty Lifecycle Summit 2022 is approaching. A collaborative conversation, led by some of the most brilliant minds in the industry, will be hosted by the Westin Southfield Detroit on the 25th - 26th of October. We had the opportunity to sit with Art Shaw, CEO of RepairPal.
The Art Shaw and RepairPal Journey
"It is very simple; I am a poor kid, the first to attend college after high school in my family," Art explains that he paid his way through college, worked hard, and "got lucky." It was back in the 90s, and he had done well; he landed a job at Charles Schwab, where he stayed until 1999, eventually exiting as the Senior Vice President. After that, Art became the CEO, Board Director, or Founder of several companies ranging from management advisory to digital music distribution, artificial intelligence, and investment management.
In 2012, Art took the reins at RepairPal, "I had learned that doing something I am proud of is important. Trying to help people is the foundation for running good companies, and I perform better in companies that are doing good for those around them."
"You can do good and do well," Art explains; he had learned early on in his career that there is a way to do right by the consumer while also building great companies and, by doing so, attracting great people and partners. "We have partners like USAA who work with us not just because of what we do but because of who we are," Art beams as he describes the relationships they have built through and with RepairPal. His time at Charles Schwab comes up throughout the conversation, and Art reflects on his time there with an unmistakable sense of pride and appreciation. The parallels experienced from a consumer trust perspective in both industries were clear to Art, "feeling empowered as a consumer" in a space that traditionally has a level of uncertainty attached to it means that you can build a great business if you have the right tool: "fair price for car repairs."
Through luck, Art had come across a team in auto repair who had a significant data set and the desire to do good, but the business was not sustainable. "I realized that like with Schwab, people were really afraid," the stats were overwhelming, and there was an opportunity to build trust. And so, Art went around San Francisco with the audit professionals who had built this dataset of "what's a fair price?" They went to different independent auto repair shops and asked a question that no one could answer,
"your daughter is in Nashville, and her car breaks down. Where do you send her to get a car fixed?"
Your car is built thousands of miles away, in Europe, Japan, or elsewhere in the States, and this is a tightly engineered ecosystem. A referral from a family member who knows nothing about cars or, even more specifically, cannot diagnose your car was the only overwhelming stat on how people were finding repair shops in an environment where trust was the issue. The relationships or connections people have with their cars are primarily accepted within the industry, but the numbers show that in 2022, people still don't know where to get their cars fixed. So Art created a brand with his team comparable to the hotel industry's quality standards. What was lacking in auto repair was knowing what you are getting at each price point.
"I was honored that the audit professionals came up with this paradigm that we call RepairPal Certified," Art explains, "for a trusted place to get your car fixed, defined by the level of quality which is not just what consumers want, but it is the right thing to do."
"So the first level is quality."
One of the things RepairPal does in terms of their quality standard is to make sure everyone is trained, "dealers pass easily, but independents don't always, and that's one of the biggest things: skills and training." Art explains that the next is the diagnostic equipment and high-quality parts. The second level is customer satisfaction, "and we do all sorts of interesting things around unbiased customer satisfaction." The third piece is the warranty, "if you're trained, and you satisfy customers and stand behind your work, we have a minimum warranty of one year, which all dealers pass."
"Interestingly, independents that fit our model and that are repaired by certified technicians have an average of two years or 24,000 miles in their warranty because they understand that's a sign of quality," Art shares. And then lastly, the final component, "that estimator that the team had built before, based on high quality with OEM MSRP and parts, and average dealer labor rates, not low, but what's a fair price with ranges, means that people can charge whatever they want, we don't control that," says Art, "if they want to charge outside of that range, they can't be Certified."
In terms of the work that RepairPal does with independents, it's mostly about quality. "They are pretty focused on being priced lower than the dealer. It's one of the ways that they increase their business," says Art, "in terms of dealers, they satisfy the quality standard already." So leaving the critical thing for dealers to focus on is price.
"We started with independents because it's a much wider range of quality, and that's the number one buying factor. So today, we have 3000 independents in our network, that's much bigger than any other chains," says Art. As a result, the RepairPal footprint is sizable, and they have grown a healthy website with 4 million unique visitors each month.
"We have 4 million people looking at service and repair. That's what we've done, and we've done that for 15 years,"
Art adds that the additional benefit pertains to those who are Certified becoming part of that online ecosystem, "so when you're Certified, you go up on our site. So when people come to us, 4 million of them, we help solve their problem by including you."
Once RepairPal had built a network of independents big enough, they talked to big companies that were in the car business, "for instance USAA has the highest net promoter score of any large company," says Art, "we presented them this nationwide network of trusted partners that we had already built, alongside an effective workflow, integrations, and technology to try to make it simpler across all these independent shops nationwide." Through the member network, RepairPal created a space where consumers can find a trusted repair shop with high quality, excellent service, and a fair price.
"This is great for brands, and we have a huge commitment to quality. The average net promoter score of independents in our network is 76," Art shares, "shops are happy to pay because they are getting incremental business."
People leave the dealer for servicing and repair. Four out of five customers leave the dealer over time, and the number one reason is price. The quality is excellent, the customer satisfaction is where it needs to be, and dealers stand behind their work, "so why are they losing most of their customers? Dealers are hardworking people who want to do good and earn a fair profit." Art highlights the objectives, "someone has to connect the customers to the dealers who are attentive to a fair price."
RepairPal has built what they call a "healthy, three-sided marketplace" Art says, "we have 3000 shops, most are independents, but we have recently started working with dealers." They have 4 million unique visitors to their site and 70 partners who rely on RepairPal to curate their trusted network, including dealers, for them. "We are on a journey to build out the dealer business," Art explains that the process includes certifying pricing through testing but that what they are already finding is that most dealers who are attentive to pricing qualify. "We use average dealer labor rates, OEM MSRP, and so if you build based on those inputs, you can become RepairPal Certified," says Art.
The beauty lies in the mechanism of trust that is established throughout the conversation with the customer. Having a third party certify fairness in pricing establishes trust between the customer and the dealer. "That conversation changes everything," Art says, "you are addressing the number one need, fairness." People know that dealers provide excellent service and a high standard of quality, but people also look to third-party sites for validation.
As we wrap up our conversation and discuss the longevity of dealers, Art and his team at RepairPal play a clear role, "there are a lot of ways to buy a car online, but when a customer needs repair work done, they still need to go to their local dealer."
Art will discuss "Transparency And Trust: Overcoming Negative Price Perception" at the Vehicle Service and Warranty Lifecycle Summit at the Westin Southfield Detroit on October 25th and 26th.