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.