Human Robots!?!

I recently read an article “Robots Ate My Road Trip” in my July Automobile magazine.  In the article David Brancaccio wrote about how he traveled across the United States without dealing with a human, and described the various types of robots that helped him.

Reading this article stirred some thoughts about some shops I have walked into where the humans have become robotic.   You have seen them, they hand you a clipboard, tell you to have a seat, fill out the form and somebody will be right with you.  Am I right!?!

What a perfect time to start the selling process that some are missing allowing the greeting to become routine…robotic if you will.  What about filling out the form for the customer, engaging them in some conversation…learning about them!  What would the customer think about your business then?  Spending some time with the customer at the beginning of the process, gathering information about them and their vehicle will pay great dividends during the closing process.  Providing the information you gathered to the estimator will help with that process move towards a sale as the customer becomes a friend and not just another person walking through the door.

Go look and see what you have, robots or people.

Marketing your customer base is important!

Marketing your customer base is important to maintain workflow.  When talking about marketing to shops I hear "I have five DRP's, they keep me busy".  My question to them is how many of them are repeat customers and how many are new.  My bet is most of them are new. Relying on your DRP to market for you makes you susceptible to their ebbs and flows negatively affecting your workflow.

By marketing your customer base you retain your customer regardless of their insurance company affiliation.  There are numerous commercials luring customers from one insurance company to another and unless you are a DRP for all of them your customer could be directed to your competition.   

By staying in contact with your customer you develop loyalty that will help combat insurance company steering.  Customers want to know they have somebody that can help them when they have an accident.  When you have stayed in touch with them they will turn to you, when you haven’t, they will rely on the insurance company recommendations.

There are many tools available to maintain contact with your customers as well as different methods.  Which method or tool you use depends on your marketing target. I recommend you do a little research before you pick one or maybe two to reach your customers. 

What are you doing to stay in touch with your customers?

Controlling Severity

Severity has been a buzz in shops lately, not that it is a new buzz but shops I have been in lately seem to have it at the top of their mind.  Makes sense since the top three insurance focus points are Severity, Cycle Time and CSI.

There are several ways to control severity, I think the quickest way to make an impact on severity is by repairing bumpers.  Bumpers have become more and more costly as they become a major portion of the front of a vehicle. Take a look in your trash bin and see how many bumpers could have been repaired.  There are many tools available now to assist with bumper repair, staplers, hot wire embossers, as well as mesh systems to restore tabs.  Compare the difference between a 4 - 6 hour repair on a bumper versus the replacement cost. 

Another way to control severity is to look at the labor hours on your estimates.  Are they all in whole or half hours?  There are more options that using whole or half hours, ever thought of using 3.7 or 4.2?  I know the thought process of writing a sheet, you look at a dent and say, "that could be 3.5 or 4, hmm, I will write 4", what about trying 3.7?  You can argue that this will cost you money, but does it?  How many times has an insurance company tell you, "No, I think that dent is worth 3.5".  How hard would it be for them to argue the point if you wrote 3.7. 

Are you charging for a entire tube of "Superfast" when making a small bumper repair or have you calculated it out by the amount used?  The same can go for freon and other consumables you use to perform repairs.  If you have a blanket cost for your consumables you might be over-charging compared to what you are using.  Using a formula based on repair needs is a better way to charge for consumables that not only helps with severity but it also eliminates the need to negotiate the expense.

Take Severity from being a buzz word and make it an action word, compare what your are doing with these tips from my Estimating Best Practice class.

State Farm Parts Program

I have been asked my opinion of the State Farms Parts Program on several occasions and I have actually developed a couple.  The most prominent is how it reduces the shop owner’s ability to make sound business decisions.  The collision industry has weathered situations like this as in the Safelite Glass Program and Greenleaf salvaged parts program.  Both these insurance company directed programs whittled away the shop owner’s ability to make a business decision that benefited the shop.  All shop owners develop an expectation on how their business should operate as well as establishing the profit margins necessary to ensure survivability.  They have developed business partnerships with local businesses to ensure that their profit margins are maintained.  In-turn the local business have relocated stores to become more convenient, stocked more parts and negotiated with shop owners to maintain an edge on their market.  The State Farm Parts Program negates these partnerships forcing shop owner’s to purchase parts from an unknown outside their market.    As insurance companies move farther away from insuring vehicles and go deeper into the repair process shop owners will see further erosion of their ability to run their business.  First it was glass, now it is parts, tomorrow it could be paint.

Another issue I have with the State Farm Parts Program is the distraction it has caused in the collision industry.  Every blog I read, every magazine I open up and every shop owner I talk to has the State Farm Parts Program on top of their mind.  Everybody is up-in-arms about it and not paying attention to the immediate tasks on hand. If you look around you will see that this program has caused distractions far beyond parts!

My last thought on this is that shops are dropping State Farm as a DRP, up to 40% in some markets and State Farm does not care.  They are contacting shops that were previously dropped from the DRP program for multiple reasons and signing them back up if they agree to the parts program.  Does that mean that you can be a poor performer and as long as you accept their parts program you are good again?

These are a few of my thoughts, I hope you have developed some of your own and most of all I hope you act on them to maintain control of your business.  When an insurance company quits being a business partner and starts acting like a business controller you need to rethink the arrangement.  If you have done your homework and marketed your customer base, insurance company affiliation is not as important, the customers are yours because you earned them.

The Value of Stability

Is there value in change – absolutely, is there value in change for the sake of change – doubtful!  Change for the right reason is always good; some will say if you are not changing you are not growing and I can agree with that.  The problem lies when change happens for the wrong reason which affects stability and this is especially true in personnel changes.  Something isn’t going right so you make a personnel change and hmm, that didn’t work, let me make another change.

A big issue in a collision center is management changes.  Changing a manager is a big disruption to an organization and goes deeper than most think.  It usually sends shockwaves through a shop, technicians slow down and production is reduced to a crawl.  Another effect of a management change is in insurance relationships.  Insurance companies will put you lower on their list or stop work flow all together.  If you have more than one management change in a year an insurance company will take a serious look at the value of your shop.  Insurance companies want stability, and will move their business to a shop that has proven to show consistency in their operation.  Those actions will hurt the workflow and ultimately the bottom line. 

At times reviewing the processes and working towards stability is a better option than making a personnel change.  Most of the problems lie in a failed process rather than a failed person.  People in general want to do a good job and quite often coaching can move a person to the next level.  Employing a coach to work with a manager to help overcome deficiencies can provide the stability needed to allow a company to grow.  Together you can check the processes and identify whether it is a knowing problem or a doing problem to determine the best action to take.  This investment can prove to be more beneficial than making a change that might not be right and impact your business adversely.  If a coach finds that a change is necessary they can help orchestrate the change to minimize the impact.

Stability is the key to success; the consistency it brings will increase morale and make your business more visible to your insurance partners.

CSI Strategy

Are you having trouble reaching a desired CSI rating? How are you approaching the issue? Some shop operators tell me they call all their customers to remind them about the survey reiterating they need a "10". I guess that is one way, others tell me they give customers coupons for completing the survey. That would work to keep your numbers up and negate the effects of a poor survey. My question is; What are you doing to make the customer want to complete the survey and give you that "10". Do all your employees know what part they play in Customer Satisfaction? Do they know how what they do affects a particular question on the survey? Have you ever gone over the survey with your employees? Seem like a lot of questions?  I recently worked with at shop that had CSI issues and NO was the prevalent answer. So in my quest to make the collision industry better every day through JSE Consulting I will share briefly what we covered. I created a test using the particular survey they were using and had each person in the shop tell me what part they played in Customer Satisfaction.  You might be surprised at the answers but they were pretty basic, fix it right, no runs in the paint, make sure I detail it right etc, but nobody really understood what part they played in CSI, some even said that was the front office’s job.  A little scary but unless all your people know what part they play in Customer Satisfaction your score will not increase, you will hover where you are despite any CSI marketing you do.  Customer Satisfaction begins at the first welcoming and through your customer follow-up. Customer Satisfaction has to be a culture all your people adopt, they have to think about what they do at every juncture of the repair and customer interaction.  Are your technicians replacing bulbs with ones they found in their toolbox, are they taking a short cut to speed the repair, or are your painters painting over primer instead of sealer?  Give your people a test using your particular survey and see what kind of answers you get, I am betting you will be surprised.  Call me if you don’t get the answers you like and need to increase your CSI score.

How does your website perform?

Was your website developed by a friend of a friend, or is it a couple of years old? Ever wonder if it was still performing its magic or if it ever did? If you can answer yes to either of those questions I want to introduce you to two of my friends, Crystal Stangeland and Chris Sheehy. Crystal is the National Sales Manager forAutoshop Solutions Inc. where they have a website tune-up program where they will analyze your website, just ask them at tuneup@autoshopsolutions.com. The last time I talked to Crystal she was explaining the difference between Google AdWord™ and AdWords Express™ and I tell you unless you work with these things all the time it is a foreign language. It is really best to leave it up to the professionals; Crystal told me that three years of our time is ten years in internet time. We have all have had to upgrade our computers every 3-5 years because of changes and upgrading your website isn't any different. Chris Sheehy, CEO Sidewalk Branding Co. is what I call an SEO guru, and through his company he can do an On-Page Website SEO Audit where he can report on the elements of your website that are bringing you value as well as where changes could increase your visibility. He tries to talk to me about META wording relevance and character/word length, GEO location indicators and anchor text usage and again it is a foreign language. That is why I need these people and you probably do also, internet/social marketing has become very specialized. I have clients that ask me to look at their websites and I do, but to know for sure I call Crystal or Chris. With more and more people turning to the internet to locate a body shop your website has to be top-notch, Crystal and Chris have both told me that you must grab an internet searcher's attention in a few seconds or they will move on.

Is it time for waterborne?

I was invited to attend a waterborne workshop a couple of weeks ago by my friends at PROFINISHESPLUS. They were holding the workshop to show the benefits of DuPont™ Cromax®Pro waterborne basecoat. Like others I always thought of changing to waterborne was for EPA reasons, but after attending this workshop I found many other benefits, especially time!  Forget about the EPA regulations, the date for mandatory use continually moves and I believe people have put going to waterborne on the back burner.  After attending this workshop I can tell you that is a big mistake.  Going to waterborne will speed up production.  Terry McDaniel, DuPont paint technician and John Santiago PROFINISHES PLUS paint technician set up the paint both with some mock front ends and a couple loose fenders.  Manned with a stopwatch John timed the different processes and believe it or not they painted a complete front end with waterborne in the time it took to paint a fender in solvent.  With the wet-on-wet application process of the waterborne product they were able to paint the front fenders and hood on the mock frontend in just less than 15 minutes.  It took just over 15 minutes to apply a basecoat of solvent, let it flash and apply a second coat of base product.  It also took less time for the waterborne to flatten/flash so clear could be applied than the solvent. If that is not a reason to go to waterborne, I certainly do not know what is!   I encourage everybody to ask their paint jobber to show them the benefits of going to waterborne, or better yet, open your shop to a workshop.  Seeing this first hand made me realize there are many more benefits than EPA requirements.  To me EPA now stands for Extra Production Achieved! Your jobber can also help you with an audit to see what you will need to do to get ready to convert to waterborne and my article in ABRN will give you some additional insight.

Positive and Profitable Marketing

Marketing plans are only as effective as their reach. You can't successfully market your collision center without understanding your target. Marketing has many facets that require research to determine the correct message, the right resource and the intended receiver. Determining where your marketing is successful and where it is not working as well as knowing the differences in the market areas prepares you to restructure your marketing program. One of the differences might be ethnic based, your marketing is not effective because of wording used in your advertisements, or it could be a college area and your marketing message is directed at an older audience. Regardless of the market you have to ensure you generate awareness of your collision center, motivate potential customers to drive to your facility, create an acceptance of what you offer, identify your brand as unique, explain the processes that make doing business with you attractive and capitalize on your customer satisfaction index.

Follow this link to read my entire article in ABRN.

Call Tracking

I had a great conversation with McKay Allen and Bryan Pocock from ContactPoint LLC.   They have a new product called LOGMyCalls which is a unique program that tracks, records and scores phone calls online.  We all wonder how our people perform when people call into the shop asking for information.  Do they sell the shop on the phone or just answer the questions?  LOGMyCalls will record the calls, score them and provide coaching on how to improve the conversations our people have with customers.  They also allow you to have key numbers for each advertising program you use so you can see how effective it is.  I know shops are spending advertising money on ads, websites and mailers to get customers to call their shop and do not see any growth from that advertising.  Many times the problem is the person answering the phone is not handling the call properly.  Check out www.logmycalls.com if you think you have this problem or if you just want to know you don’t have the problem. 

Shout out to my friends

I have been developing a best practice series over the last few months and as some will say it has taken a village as well as traveling to some to make this series complete and accurate.    It is well on its way to completion and I need to give a few shops a shout out for allowing me to hang in their shops and take pictures of them performing the best practices.  Many thanks to First Team Hampton Chevrolet Collision Center,  Casey Collision Center, Hampton Collision, Hutchens Chevrolet Collision Center and Bay Custom Auto Body.

Chief EZliner Express

I talked  with Mike Ramey of M.R.E Inc recently about my theory of replacing an aging frame machine with a new one or purchasing several small pulling platforms similar to Chief Automotive's EZLiner Express instead.   You can purchase about three of the small pulling platforms for the price of one frame machine.  The design of new vehicles utilizes a crush zone type construction so mostly what is happening in shops now is jigging vehicles, doing slight pulls, removing the damaged metal and replacing the structure with new pieces.  There isn't much heavy pulling going on anymore and having one or two frame machines in a shop has always created a choke-point or a retraint in production flow.   Having small pulling platforms which allows a vehicle to have the affected structure removed and replaced right in the technician's stall is a definite time saver.  There is no longer a need to move the vehicle to the frame machine.   You will still need one full-size frame machine for pick-ups and SUV's but your techinicians will enjoy having pulling capabilities right in their stall with their individual platforms and you will notice a decrease in your cycle time

Looking for Good Help?

I know finding good technicians is difficult however, it is not impossible.   The number of available technicians is very low and most are content in their current employment.  Ads have not proven to be fruitful in most markets, there is no rhyme or reason why, they are just not working and they are very expensive.  For the same money you can generate some very valuable leads by giving incentives to the people around you.

Using people around you as recruiter’s works well because you generally get a higher quality applicant.  Technicians know other technicians and will tell you about ones they would want to work beside.  Offering your technicians a bonus for bringing you a technician benefits both of you.  They work to find a technician that they respect and you get a good technician. 

 Another source is the tool man, they are in shops all the time and you would be amazed on how well they will recruit for you for a little cash.  Unlike a paint jobber who has loyalty to the shops they support, the tool man works for the technicians and he needs them to be employed.  This gives him an added incentive to assist you. 

It is hard to offer technicians a higher hourly rate as a lure, our industry has polluted those waters by offering technicians a $1 more to a point where most technicians are earning 50% of the door rate.  Using a sign-on bonus is a way to provide the appeal without costing you a decrease in labor gross profit. 

I recommend phasing in the bonus, 25 - 50% at time of hire and the remainder after six months.  I would create bonuses equal to what you have been paying in employment ads, but even if you end up putting out a little more it will be because you have actually hired somebody, not just paid for ads.

Continous Improvement

We are almost to the end of January and I hope everybody has had a chance to reel in their 2011 numbers.  While those numbers are fresh in your mind I encourage you to look them over and pick three that you feel you can improve on.  Then unlike the New Year’s resolutions you made just under a month ago, look at these numbers with some scrutiny and develop a plan to improve them throughout 2012.   What numbers you select will be different from each other but the ones I like to look at every year on the financial side are; Paint Material Sales per Flag Hour, Overhead Expense as a percentage of Sales, and Total Gross Profit, then on the operations side I like to check closing ratios, CSI scores, and Technician Production percentages.  Once you pick your numbers find out what they would be if you increased them by 1%.  Those that know me well have heard me talk about the power of 1, the number is small by itself but when it is used as a multiplier the magic begins. Let’s say your total gross profit is 42%, what would that dollar amount look like it   if your gross profit was 43%?  What would your closing ratio look like if it was 78% instead of 77%?  I think you will find that increasing any number you look at by 1% will improve your bottom line substantially.