Community Server

Time to Pony Up

jstahl — Wed, 03 Feb 2010 19:46:00 GMT

At the Collision Industry Conference held Jan. 13-15 in Palm Springs, Calif., there was a robust panel discussion on industry issues and things that keep people up at night. Represented on the panel were insurers, repairers, suppliers and trainers. One of the issues that was brought up by everybody was the increasingly complex technologies developing in vehicles and the collision repair industry's struggle to stay up-to-date on training. The Allstate rep voiced the insurance industry's concern about this as well, and I was tempted to say, "Well, how about when one of your shop 'partners' asks for an additional $2 per hour in labor that you say 'yes' instead of 'no'?" I mean, isn't that one of the reasons why shops can't keep up with training is that they can't afford it because the rate at which they get paid hasn't kept up with increasing costs?

Change: Exciting or Unpleasant?

jstahl — Mon, 03 Aug 2009 14:44:00 GMT

I just got back from the I-CAR 30th Annual Industry Conference in Washington, D.C., and better words I have never heard aimed at those repairers who are choosing to not convert to low-VOC basecoats until they're forced to:

"When you initiate change, change is exciting. When someone forces you to change, it's a very unpleasant experience."

Megabus.com: Enemy Number One?

jstahl — Fri, 12 Jun 2009 13:09:00 GMT

Have you heard of this Megabus.com? It's the new low-cost daily express bus service in the U.S. I heard on the radio the other day that it has grown by 150 to 200 percent over the last year! I guess this is more evidence that people are changing their driving habits and that the miles we've lost recently due to high gas prices may truly never come back.

The company recently invested in 96 new touring double-decker buses to meet expanding customer demand. Apparently these are no ordinary buses. They each seat 81 passengers (which means, of course, that each bus has the potential to remove 81 automobiles from the highway!), are 13.1 feet high, offer panoramic views and are equipped with comfortable reclining seats with safety belts, reading lamps, power outlets and free WiFi. Also, the double-decker is 25 times more efficient than a single-passenger car per passenger per mile.

Under the Watchful Eye

jstahl — Wed, 10 Jun 2009 13:31:00 GMT

Remember when I wrote about seeing a GEICO banner being dragged by a plane while driving down I-77 north to Cleveland? It had the GEICO caveman on it, but at first glance I thought it was Bob Marley. Well, yesterday I had a second sighting, only this time it was GEICO's newest commercial star: the stack of money with eyeballs.

I'll be honest, the googly-eyed money stack cracks me up. The cavemen don't, but still they are memorable.

So let's take something from this. What's the typical message shops try to convey in their advertisements? "Give us the keys, we'll take care of everything." But maybe humor is a better way to go. Not that car accidents are funny, but if you could come up with a humorous or at least memorable character or idea to promote your brand, wouldn't that stick in consumers' heads more? Even a jingle. Heck, I still can't get that "gimme some of that fillet-o-fish" song from the McDonald's commercial featuring the talking mounted fish out of my head. Advertising, especially on TV, is expensive, so you might as well come up with something that's unforgettable.

Spot Repair

jstahl — Fri, 05 Jun 2009 14:59:00 GMT

Seen in a very bad part of downtown Cleveland, Ohio yesterday: a shabby yellow van with handwritten letters all over it (and I mean, in every square inch available on both sides of the van) advertising "spot repairs" for vehicles.

Believe It or Not?

jstahl — Wed, 29 Apr 2009 14:30:00 GMT

I saw some interesting statistics from Allstate in a recent article (click HERE to read) about the insurer's efforts to keep A.B. 297 in Nevada from passing. The bill would prevent insurance companies from acquiring or opening collision repair facilities and would place restrictions on pre-existing relationships between insurance companies and shops they own interest in, referred to as “tied shops.” The bill would also require a notice posted in all tied shops that reads:

This body shop is owned in whole or in part by (Name of Insurer). You are hereby notified that you are entitled to seek repairs at any body shop of your choice.

Anyway, in the article, Allstate reps said that, in 2008, only 10 percent of its customers in Nevada had their cars repaired at Sterling, 30 percent used a preferred provider and 60 percent settled for a check or used another body shop. They then said that this proves they're not steering. I just wondered if those numbers are true, especially given the stories you hear about how some insurance companies shoot for getting 70 to 75% of their customers to go to one of their preferred shops. Also, customers who took a check and customers who used a shop not on Allstate's list were lumped together in the 60% figure. I wonder how that breaks out? And I wonder how many of those customers who took checks did not get their vehicles repaired?

Does anyone believe these numbers? Just curious.

Clean That Bathroom

jstahl — Mon, 16 Mar 2009 21:25:00 GMT

It's a question I occasionally get from a reader: "How do I get on a DRP? Every insurer I ask has the same reply: 'Sorry, we're not looking for any more shops at this time, but shall we have a need in the future we will contact you.'"

My normal reply is that he or she should try to wow a local agent not with complimentary doughnuts or pens but Key Performance Indicators. Put together a PowerPoint presentation that illustrates why your shop is different: your state-of-the-art equipment, your astronomically high Customer Satisfaction Index (CSI), cycle time, touch time, and closing ratio, your clean and professional-looking building, your professional accreditations and high-level training, your community involvement, etc. Then, get some local agents over for a lunch buffet and show them this presentation. That should wow them. But you can't just make stuff up. Your business really has to shine, and it takes establishing a culture and living that culture to accomplish this.

So, it was interesting then that a repairer I recently met at a Sherwin-Williams A-Plus Vision Group meeting in Los Angeles offered one more bit of advice: "Make sure your bathroom is spotless." He claims an agent told him that a dirty bathroom has turned him off to a shop more than once. Who knew?? Valley Motor Center, the shop I visited while in LA, had a bathroom that looked like a Roman spa, and they're on 13 DRPs, so maybe that guy is on to something...

See You at CCRE

jstahl — Thu, 12 Feb 2009 20:21:00 GMT

Several members of the Coalition for Collision Repair Excellence (CCRE) have written me recently to express their displeasure in my January 2009 Editor's Notes, "Let's Be Real, Folks" (click HERE to read). It appears as though they interpreted it to mean that I like the Collision Industry Conference (CIC) but don't like the CCRE. Also, several believe that BodyShop Business censored CCRE's press release that stated that the CCRE believed that the "14 Points of DRP Reform" discussed at the November 2008 CIC meeting would further promote steering. Unfortunately, it may have looked like we censored it because it was not mentioned in print in that issue due to arriving after our Industry Update section was completed. But the fact of the matter is that the CCRE release was posted on our Web site on January 6, 2009, included as the lead story in our January 8, 2009 online newsletter, and then published in print in the February 2009 issue. We would never censor anyone because we believe it is important to show all viewpoints.

Also, I would like to clarify that I have had several discussions with Tony Lombardozzi (as well as other CCRE members) regarding CCRE's viewpoints, one of which led to publicized comments in an article called "One Voice" that appeared in the January 2008 issue (click HERE to read). In fact, I look forward to speaking to him and other CCRE members at the CCRE annual meeting March 27-28 in Cincinnati.

Ride the Zamboni

jstahl — Mon, 02 Feb 2009 16:33:00 GMT

I was at a Lake Erie Monsters American Hockey League game the other night when I noticed the name of a local body shop on the zamboni: Miracle Auto Body. Nice marketing move! For whatever reason, people are fascinated by the zamboni as it moves around the rink, smoothing over the ice, so with that many eyeballs on it, I'm sure Miracle Auto Body gets some nice exposure. Not as nice as Leinenkugel's, which has its beer logo emblazoned across the entire machine, but still...

Economic Outlook

jstahl — Thu, 29 Jan 2009 21:06:00 GMT

BodyShop Business recently conducted a poll to determine what repairers' outlook is for 2009. Here are the results:

Was your business in 2008 better, equal to or worse than it was in 2007?

Better: 36.6%

Worse: 36.6%

Equal to: 26.7%

Do you expect that your business in 2009 will be better, equal to or worse than it was in 2008?

Equal to: 39.1%

Better: 32.3%

Worse: 28.6%

What do you think will have the biggest impact on your business in 2009?

Paint costs: 50.9%

Energy costs: 50.3%

Steering: 43.5%

Unvalidated labor rates: 36.0%

DRP concessions: 26.1%

P-page disputes: 21.7%

Parts availability/pricing: 21.1%

Lack of adjuster/insurer field staff training: 20.5%

Other: 16.1% (listed below)

Legislation: 14.3%

Third-party desk reviews: 14.3%

Staffing: 12.4%

Changing vehicle technology: 8.1%

Changing repair processes: 6.8%

Other factors as written in by respondents:

Weather

Insurers ramming DRP policies into our shop

Insurance salvage auto sales/totaling for profit

Less people with insurance coverage

Taxes and regulations

The new administration

Closing shops

Desperate shop owners

Customers "cashing out"

What percent sales growth do you foresee for your shop in 2009?

0-5%: 42.9%

5-10%: 20.5%

10-15%: 8.1%

Over 15%: 4.3%

Do you feel your net profit margin in 2009 will be greater than, equal to or lower than what it was in 2008?

Equal to: 41.0%

Lower: 32.9%

Greater: 26.1%

Do you feel the credit crunch or banks' tightening of loan requirements will impact your business in 2009?

Yes: 62.1%

Not sure: 19.9%

No: 18.0%

Season of Giving

jstahl — Mon, 29 Dec 2008 18:13:00 GMT

Once again, the holidays have come this year gift wrapped by many examples of collision repair shops giving back to their community and to those in need. Even though the industry has come a long way in improving its image, thanks in part to the National Auto Body Council, there still remains work to be done. It's good to see that some shops make it a part of their daily business dealings to lift up the industry and make it more appealing to the consumer. Below are just a few links to stories we've run on the charitable giving going around. If you haven't read these stories yet, you should. Perhaps it will inspire you to start your own giving or multiply your efforts:

http://www.bodyshopbusiness.com/Article/38277/tennessee_shop_restores_soldiers_stolen_truck.aspx

http://www.bodyshopbusiness.com/Article/38125/nabcs_recycled_rides_helps_needy_families_across_the_us.aspx

http://www.bodyshopbusiness.com/Article/38199/connecticut_collision_repair_specialists_toys_for_tots_collection_exceeds_expectations.aspx

http://www.bodyshopbusiness.com/Article/38082/illinois_shop_gives_gift_of_refurbished_van_to_needy_family.aspx

My First Collision

jstahl — Mon, 08 Dec 2008 15:36:00 GMT

I saw an article the other day about how to "parent" a teenager through his or her first collision, and I thought that this could be a great way for a shop to market itself. Why not hold a class at the shop for parents and their teenagers to educate them on what to do once they're involved in a collision? Then maybe give them a tour of your shop. They become familiar with your shop and then know where it's located, but more importantly it shows them that you care and that might just buy you business in the future. As we all know, teenagers are very risky drivers and need this information. You're not only endearing yourself to parents but teenagers as well, who will be future customers on their own. The time spent putting together such an event would be well worth it. And in these tough times, any way to get customers in the door is a good way.

Bad Example

jstahl — Wed, 12 Nov 2008 16:17:00 GMT

Talk about a bad example. I attended the Collision Industry Conference at NACE last week and took great interest in a panel discussion on steering. One of the insurance company representatives said that not explaining to a policyholder the benefits of going to one of an insurer's preferred shops would be like telling someone after he had dinner that he could have gotten a 20 percent discount.

Huh? First of all, when the policyholder takes his or her car to an insurer's preferred shop, it's the insurer who's getting the discount, not the policyholder. Maybe he meant to say the policyholder's "discount" is in not having to pay any out-of-pocket costs. But the insurer's role here is to make the policyholder whole no matter what it takes. If charges are deemed reasonable, then the insurer has to pony up and the policyholder will not have to pay any out-of-pocket costs. It was just a really bad comparison which he attempted to use to explain why insurers push their preferred shops onto consumers.

Smile for the Camera...

jstahl — Mon, 27 Oct 2008 12:59:00 GMT

Collision repair facility owners have to be increasingly creative to compete in a gutted market. Take what Barbara Morgan is doing at her shop in Palm Bay, Fla. Morgan, who bought the 30-year-old Nissen's CARSTAR Autobody Shop in January, has installed eight cameras that allow customers to keep tabs on repairs being done to their vehicles.

Now THAT's customer-focused thinking! The modern-day consumer is getting used to these things. Thanks to these cameras, parents today can see what their children are doing at day care centers. Also, anxious pet owners can monitor what Fido and Rex are doing at the kennel. For many consumers, their cars are also their babies, so being able to keep an eye on repairs at the local body shop gives them peace of mind and the confidence that the shop isn't trying to hide anything.

The shop is also planning to implement a management system that alerts customers via e-mail or voice mail as their cars go through each phase of the collision repair process.

Take note, everyone. This is the wave of the future. The shops that show this out-of-the-box, consumer-focused thinking and can best control costs, operate efficiently, deliver quality and service, and keep up with training will be the ones left standing.

$505 Billion?

jstahl — Wed, 22 Oct 2008 13:13:00 GMT

Quote of the day from a story in the Kansas City Star on how the economic crisis may drive up car and home insurance rates because the Wall Street goings-on have negatively impacted insurance companies. The quote was from Robert Hartwig, chief economist for the Insurance Information Institute:

“People should not read into this that insurers are in trouble financially,” Hartwig said, pointing to statistics that showed that insurers had $505 billion to pay claims as of June 30.

I'll say.

It's a Bird, It's a Plane...

jstahl — Wed, 15 Oct 2008 12:37:00 GMT

Bizarre moment from yesterday. I'm droving home on I-77 north when I see something out of the corner of my eye. I look up and it's a plane dragging a banner that reads: GEICO. There was also a crude drawing on it that I first took to be Bob Marley. But no, it was the GEICO caveman. Wow.

The Whopper Bar

jstahl — Thu, 09 Oct 2008 16:41:00 GMT

Did you hear? Burger King plans on opening new "Whopper Bars" that can fit in any nook and cranny in airports and other busy places that get lots of foot traffic.

This is a great example of diversification, which we constantly tell collision repairers to think about for their own businesses. Burger King has obviously taken its most popular product and made it more easily accessible to people on the go in hopes of increasing sales.

It reminds me of "speed lanes" that some shops have created for customers who have minor repairs and just want to get in and out of a shop within 45 minutes or so. We need to constantly be thinking of new ways to service the customer, the vehicle owner. What do they want? What do they truly desire? How can we make their experience better and the same time increase our sales?

Read more on the "Whopper Bar" by clicking HERE.

Would You Get Chosen?

jstahl — Fri, 03 Oct 2008 12:47:00 GMT

I found the following advice on how to select a collision repair facility on a consumer Web site the other day (www.cars.com) and thought it would be helpful to post here. These are all things that should be no-brainers, such as keeping a clean and professional-looking facility. But then again, I personally know of a shop a few blocks down from where I live that is a complete eyesore. So read these tips offered to consumers and ask yourself if they would pick your shop considering all these points:

1. Ask if the shop customarily handles your vehicle make and model. Ask how long the shop has been in business.

2. Look for a neat, well-organized facility with modern equipment. Many vehicle manufacturers recommend specific repair procedures and equipment for the repair of their vehicles. Ensure that the facility you choose is trained in these procedures and has the proper equipment. Professionally run establishments will have a courteous, helpful staff willing to answer all of your questions.

4. Look for signs of professionalism in the customer service area: civic and community service awards, membership in the Better Business Bureau, customer service awards.

5. Many times you can see the vehicles being repaired by the shop. Are you impressed by the type of vehicles the company is repairing and the way the vehicles are being handled?

6. Also look for signs that the staff is technically competent, such as trade school diplomas, certificates of advanced course work training from I-CAR and ASE.

Assignment of Proceeds Review

jstahl — Wed, 10 Sep 2008 13:07:00 GMT

I just wanted to say thank you for your enormously positive response to our new Web TV show, "Crash Central." The first series of episodes on "assignment of proceeds" have prompted many of you to ask even more questions about this legal procedure designed to allow a body shop, on behalf of the consumer, to recoup the full amount of payment an insurance company owes for a repair. I've tried to answer a few of those questions below:

1. Can I use "assignment of proceeds" in my state?

Erica Eversman said in Episode 3 that she believes that, as a general principle, assignment of proceeds is the type of thing that would be commonly upheld in the vast majority of states. The reason, she said, is because the idea of assignment of proceeds is embedded in "common law," which is the law that spawns from case law versus statutes and regulations. The only time she believes there might be an issue is if a state has a law that specifically prohibits this type of action, but she said she would be very surprised if that was the case.

2. Where can I get a form for my customer to sign?

I as of yet do not know of a form for use but I'm working on obtaining one. On the show, Erica said the form could be something very simple typed or written up by you and signed by the consumer. Stay tuned for more information.

Are we advocating that every single body shop in the country pursue this legal action? No. It may not be something appropriate for everyone to do. As information providers and guardians of your profitability, we are simply providing you with the knowledge of a previously unknown legal maneuver which may allow you to recover monies you are owed.

Going Green

jstahl — Thu, 21 Aug 2008 13:16:00 GMT

I'm seeing more and more news reports on the Web about this shop or that shop going "green," or transitioning to environmentally-friendly business practices. In fact, the frequency of these reports has increased significantly, which is encouraging. It's also encouraging that these shops are getting the message out and marketing themselves with official press releases. After all, after undergoing such a drastic change in your business, why wouldn't you announce it to the world and use it as a marketing tool?

With insurance companies steering like crazy, shops that have seen their business get cut in half are looking for ways to make themselves stand out from the competition. They're looking for innovative ways to market to the actual customer, the vehicle owner. Becoming certified to repair Mercedes or BMW isn't an option for everyone given the expense and all the hoops you have to jump through. Going "green," however, is a great way of differentiating yourself.

I don't see this as a fad that's going to go away anytime soon. The planet looks like it's hurting, and the average everyday consumer is seeing this, too. Consumers now go out of their way to patronize businesses that are trying minimize their eco-footprint.

Some shops are simply converting to waterborne paint, which contains less Volatile Organic Compounds (VOCs) than solventborne paint. Others are taking the green approach a step further by using:

• Ultraviolet curing body fillers and primers that reduce or eliminate the use of solvents.
• Multi-stage dust filters in controlled work environments.
• Ceiling filters to trap dust that would otherwise escape through the roof into the air.
• Recycling and/or proper disposal of all paint waste and dismantled car parts.
• Biodegradable soap when washing cars. Also, high-pressure wash systems that use minimal amounts of water. And runoff water is filtered before it goes into the proper drains.

There's an an official certification as a green business to be had in some parts of the country. Typically, the business has to prove it recycles all paper, glass and plastic products, uses energy efficient lighting, etc.

Have you gone green yet? It may part of the answer to standing out and surviving in an increasingly hostile market.

The Future of Collision Repair?

jstahl — Mon, 11 Aug 2008 17:17:00 GMT

Myself and Managing Editor Hannah Schiffman got out of the office recently and visited DCR Systems in Mentor, Ohio. Initially, DCR offered turnkey collision repair outsourcing to dealerships nationwide, operating six repair centers in three states. However, DCR recently allied with Toyota Motor Sales USA to offer its patent-pending, lean-based operating model exclusively to Toyota dealerships for the next five years.

I initially visited DCR two years ago and walked away just as impressed this second time. If you haven't visited this collision repair facility yet, I highly recommend that you do. The place is immaculate. You could eat off the floors. Everything is organized, color-coded and easily accessible, an anal retentive person's dream. I asked CEO Michael Giarrizzo if this anal retentiveness for him spills over at home, and he said no, but one employee modeled his method of cleaning dishes after the way they keep the shop clean. Talk about an employee "buying in" to the company philosophy.

I'll be honest – if I were opening a body shop tomorrow, I'd model it just like this facility. I'd copy the heck out of it. I think others have had the same idea, which is why DCR decided not too long ago to launch a new company, DCR Intellectual Property Company, that will license the lean production system used in DCR facilities. After all, Giarrizzo put a lot of hard work into creating his own unique system and has every right to protect it.

Let's face it, those who cling to the "old way" will most likely disappear as costs continue to go up, vehicles become more complicated to repair and consumer/insurer demands multiply. It's been said so much I'm sick of it, but the definition of insanity is doing things the same over and over and expecting different results. When you scrutinize certain aspects of the "old way," you realize they defy logic and make no sense. But some repairers are so busy they never have the time to think about doing things differently.

At DCR, there's a logical flow to things. It's a car repair factory, if you will, an assembly line that ensures ultimate efficiency. Rarely is there a stoppage of work. The goal is to get consistent, predictable results in an unpredictable environment because the whole model is based on predictability. Without predictability, everything falls apart. The other key is discipline to make sure that posted standard operating procedures or "SOPs" are strictly and consistently adhered to.

There's always a better way. There were two machines at DCR that created inefficiency because they were in separate places, and someone thought to ask the manufacturer if it could customize a cart for the two machines to fit into and thus be together. And the manufacturer did this. All it took was someone to think logically and sensibly and figure out a better way. We just don't do that enough it seems.

Customer Service Key

jstahl — Mon, 28 Jul 2008 13:56:00 GMT

On my flight over to the recent I-CAR Annual Conference, I read in USA Today how business at Best Buy, despite the weak economy, is thriving thanks to its emphasis on customer service. This emphasis on service is also the reason Best Buy is kicking the pants off its competitor, Circuit City, which is having major financial trouble.

This is just another example of how important customer service is to a business. Yes, the retail electronics business is a completely different animal than collision repair, but there is something we can learn here. With not enough repairs to go around out there and insurance companies steering most of the available jobs to their preferred shops, some shops are at a loss as to how to bring in more business or at least make sure to close the deal when a customer walks in to "interview" them for the job (that's right, the customer isn't coming in for an estimate, he or she is waiting for you to impress him or her by extolling the virtues of your shop). One way is stellar customer service, something the industry as a whole could polish up on.

Sometimes it's the little things that count, such as coming out from behind the counter as soon as a customer walks in and engaging him or her right away in a friendly manner. Some restaurants tell their servers to try to engage diners within 30-45 seconds of their arrival at the table, and if one server is slammed then someone else should at least greet the diners and tell them their server will be with them shortly. The bottom line is, people don't like to be ignored. It makes them feel you don't want their business.

And all shops could show a little more empathy to their customers' situations. In the article "Sell That Job!" in the upcoming August issue of BodyShop Business, Hank Nunn writes that "the customer wants empathy above everything else when he or she comes to our business."

Extreme customer service. It's something every shop can improve and reap benefits from.

No Doom and Gloom Here

jstahl — Wed, 09 Jul 2008 17:37:00 GMT

I recently returned from the annual CARSTAR conference, and I must say the incredible amount of energy and enthusiasm poured out there is still lingering in my system. These days, there seems to plenty of doom-and-gloom talk about the future of the collision repair industry, but there was none to be found at this four-day pep rally. And I call it a "pep rally" because it was brimming with positive thoughts, creative ideas and motivational (and informative) speeches.

Conspicuously absent was any talk of repairers' growing frustration with insurers and any advice to franchisees on how to handle situations where they feel vehicles are being steered from their shops or perhaps feel they aren't getting paid for all of the procedures they perform during the repair process. Also, the term "partner" was frequently used in reference to insurers. You could argue it had something to do with the fact that 26 insurance executives were among the 500 or so attendees.

But I think the message of the conference would have been the same even if the insurance industry hadn't been so heavily represented. Why? Because I think CARSTAR has the philosophy that, right or wrong, we all play in the same sandbox and have to get along. And the insurance industry isn't going anywhere. Plus, the frachisor's executives made it clear at the conference that insurer relationships are a big part of their growth strategy for the future. CARSTAR knows that the number of shops is shrinking as insurers increasingly favor multiple-location operators, and it wants to put itself in a good position as the industry contracts and more work gets funneled to fewer shops.

To be fair, though, it's not as if CARSTAR's leadership has completely turned a blind eye to what repairers believe are underhanded tactics by insurers meant to squeeze their profits. Case in point is the "responsible push-back" letter CEO Dick Cross and COO Dan Bailey issued to the industry last year that said that "insurers are having their way with independent shop owners – offloading administrative costs, narrowing the definitions of what they will pay for and demanding higher levels of service." But the letter pointed out that these weren't "schemes" on behalf of insurers to squeeze shops' profits but rather a reason to exponentially improve the customer experience.

Indeed, improving customer service was the main message pounded through at the conference: extreme customer care. CARSTAR chose to focus on what it can control, which is making each and every store a better business operator. Senior Marketing Executive Bill Garroutte said that if each store could improve its "closing" percent just a little bit, or the number of customers who walk in the store and end up giving that store its business versus walking out, it could mean extra sales of $50,000 per store.

What will you focus on the rest of this year and next and into the future? Based on comments I've received from some repairers, it seems that some have just given up and resigned themselves to going out of business and they're dead-set on fighting till the end. Their last and final goal is to kick insurers in the butt one more time. I find that very discouraging. Wouldn't it be more productive to focus that energy on working on your business and turning a harsh light on the things that you do that hold you back? It's never too late. What's wrong is wrong, and repairers should fight for their right to a decent profit and expose unfair business practices. But to blame all of an industry's ails on one party is wrong and can lead to counterproductive activity.

Communication Breakdown

jstahl — Fri, 27 Jun 2008 16:58:00 GMT

I recently came back from the Midwest Collision Industry Forum held in Columbia, Mo., and a recurring frustration among repairers was reinforced to me during the session in which Chris Andreoli, corporate PD process manager of Progressive Insurance, talked about his desire to improve relations between repairers and Progressive.

First of all, let me say that Andreoli gained my respect and many others' by showing up at the meeting to field questions from repairers, many of whom expressed immense frustration with Progressive. Bob Smith, representative for the Missouri Collision Coalition (AASP of Missouri, ASA MOKAN and SCRS MOKAN) jokingly posted a "No Weapons Allowed" sign on the door, and Andreoli also joked that he was a marked man. Andreoli showed much courage and, more importantly, a sincere desire to improve Progressive's reputation in doing business with repairers. He is well aware that Progressive routinely ranks near the bottom in shop surveys and is intent on improving that ranking.

However, despite Andreoli telling the audience what Progresssive's corporate policies and procedures are, repairers time and time again stood up to refute those policies and cite examples of how they're not being followed by field personnel.

Insurance field personnel making their own rules is nothing new to repairers, and Progressive isn't the only one guilty here. How many times have we heard about an industrious field agent all of a sudden declaring that "we don't pay for that procedure" when repairers before had no problem getting compensated for it? It gets to the corporate heads, and they profess to know nothing about it. Repairers often tell me their theory is that the agent is looking to make a name for himself or herself, or trying to impress his or her boss, and is often rewarded for doing so.

The bottom line is that these highly touted policies aren't effectively getting from the corporate heads to the field personnel. Either it's lip service or just a pathetic breakdown of communication. And if the corporate heads are saying one thing but incentivizing employees to do another, then their sincerity and credibility goes out the window.

Andreoli had no real answer for repairers who were telling him how things really go when they deal with Progressive field reps, only to say that Progressive has defined business practices and, if they're not being followed, those reps will be communicated with.

Maybe the responsibility lies with local management. Maybe some of these insurance companies are so big they can't possible babysit or manage their people well. Or maybe they just turn a blind eye to it. The reality is that even though every insurance company says it doesn't steer, we all know they do, and that in and of itself makes us suspect of them. Actions speak louder than words.

If Progressive really wants to mend its relationship with repairers, more effective communication needs to happen between the top officers and the field reps. Right now, Andreoli is saying one thing and repairers are experiencing another. His efforts are commendable, but Progressive has a long road ahead of it...

Raising Labor Rates

jstahl — Mon, 16 Jun 2008 14:15:00 GMT

There was a good article recently in the Patriot Ledger (to read click HERE) about body shops and insurers battling it out in Massachusetts over a labor rate bill recently added to the State Senate's budget proposal for the coming fiscal year.

The bill would create a new system of determining labor rates. Currently, rates are determined through negotiations between shops and insurers. The new system would have a commission comprised of insurers and repairers, as well as state officials, who would oversee a set of rates tied to a national average labor rate. The state's current average hourly rate is $34.55, compared to the national average of $42.45.

As usual, insurers are saying the rate increases will result in higher-priced premiums for consumers, but repairers are arguing that with record profits of late, the insurers should be able to absorb that without passing it on to consumers. The fact of the matter is that an increase in labor rates is long overdue, it should happen and insurers can indeed absorb the cost.