BodyShop Business Blog

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?

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."

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.

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.

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.

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...

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.

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...

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%

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

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.

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.

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.

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.