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Are you seeking to exploit the economic downturn by idetifying emerging customer's needs? Customers need new types of offerings, it's an ideal time to go on the strategic offensive and innovate. How are you doing this? Sharing stimulates action!
I find that customers needs are generally the same they don't change regardless of economic times, what does change is how customers react in good times and bad times economically speaking, consumers are driven by the perception that they are getting the best deal for their money and in the Great United states of America we have added the word experience to the equation, "how was your purchase experience" (wow what a concept), but what does that have anything to do with the Collision repair Business when we are being paid by a third party,( I have some thoughts on that) what I! believe the real question is, what can we do to turn the world around and indirectly control the payer and let the consumer decide where he or she can get a great repair experience.....( I also have some thoughts on that but I'll hold off for now.
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Agreed, I think you are dead on with respect to 3rd party pay intervening with "customer experience." Anytime there is a 3rd party pay scenario competition is absolutely depleted and the consumer typically transfers their authority to the 3rd party payer. So I ask,How can you convert consumers from 3rd party payers to 1st party? The consumer policy states that they, not their vehicle, need to be whole again. Perhaps educating the consumer on that might shift your sales mix. Food for thought. I have more on the idea of competition in our industry, I will post that for furhter commentary.
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Today 12-4-08 Automotive Collision Technicians went to mediation with Geico Insurance for an underpayment case that we filed against their insured. Geico was represented by Kara L.Kilma from the offices of Robert B. Stanewich. The amount owed is $335.72. The amount is the difference in paint and materials. The attorney for Geico when asked by the mediator why they feel they are not responsible for this invoice she replied " GEICO FEELS THAT TAPE,DUST MASKS,RAZORBLADES AND OTHER SUCH MATERIALS ARE A COST OF DOING BUSINESS AND THAT IT IS A PART OF A SHOPS OVERHEAD" and that she or her office does not charge for paper, envelopes,printer cartridges they consider this a part of doing business and that she will present an expert witness for testimony to that fact. (quote)Well!! I about fell of my seat as well as my wife and our attorney. We covered everything from paint caps to steering, the intentional placement of refinish processes and procedures under the repair category so that it does not calculate materials. We also touched on the issue of " Prevailing Competitive Rate ". The question served up by us was if you let the system figure materials and you are intently putting times in the repair category so that they do not calculate as materials, therefore shorting the necessary materials cost, along with putting in a $400.00 paint cap how is it that you can say that you have paid for all of the materials that were used during the repair process and that are currently on the vehicle?? A blank stare ensued from that end of the table! Also how can Geico consider any materials a cost of doing business!? Another blank stare!! They requested a jury trial on the basis that some materials are a cost of doing business!! okay?. I am very anxious about this trial, and so should everyone in this industry. We currently have 12 cases pending against Farmers, Geico, Progressive, Nationwide/Allied, Country Insurance. We have had good success in the court system and so can any of you.
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In my opinion, to think that customers needs stay the same in an economic downturn is foolish. Put yourself in our customers shoes, the economy is changing before our eyes. For example, loans are harder to get, fuel prices are unsettled, jobs and compensation are at risk,and debt is getting harder to pay off. As far as B2B customers, volume and margins are getting smaller, credit is getting harder to get, and suppliers are getting tougher to work with. Under all of this duress, customers need new types of offerings to make them feel secure about spending their hard earned money. Maybe our industry should be focusing on value proposition, longevity and safety. Now is the time for our industry to be proactive and not reactive. We need to be innovative and cutting edge by offering things of value to our customer that our competitor down the road hasn't even thought of.
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my point!" needs stay the same" how we react to economic times such as purchasing less or not purchasing at all is what changes, but the needs don't go away, the dent in the fender remains a "need to fix" the broken AC Is a "Need to fix" etc, etc.....I think the question remains how best to get the most out of this shifting economy, when consumers are reluctant to part with their hard earned money.
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IT'S NOT THE INSURANCE COMPANIES WE HAVE THE FREEDOM TO PUT WHAT WE NEED ON THE SURVEY BUT WERE ARE AFRAID THATS THE ONLY WORD I CAN USE EVEN IN TUCSON THERE RATE IS HIGHER SO WHAT IS IT
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I LOVE BOB ISHAM's Comments, HOW ARE You BOB HAVE NOT TALKED TO YOU IN A LONG TIME
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I believe that the only industry exploiting the downturn in the economy is the insurance industry. Why is that? well, how many shops have been tracking the amount of residence estimates, I mean vehicles that are estimated by the insurance companies at the policy holders home, business. The owner at that point takes the original estimate as the full extent of the damages to their vehicle, as they should because that is what the policy reads "AN ACCURATE AND COMPLETE ESTIMATE FOR DAMAGES" what we have found is that some, not all insurance companies fail to mention the supplement process unless the policy holder is educated in the practices of the insurance industry. What I am getting at is, at that point the policy holder begins shopping for a repair facility as a cash pay scenario not mentioning the insurance estimate. We as repair facilities write an estimate according to the owners needs and concerns which in most cases does not completely repair the vehicle. The owner has already decided prior to going to a shop what and how much they will spend of the original amount. People are in tight times and are searching for many different avenues to save or make money, we are no different as shop owners. We have had several people come in under this scenario and after talking with them finding out that this is just the case. The practice of short paying is not a new idea or practice it goes on daily, would any of you disagree with that? The fact is, is that the amount of vehicles that are driving around in our city that are not repaired is mostly due to the policy holder using that money to pay other things that are more important to them than their vehicle. the amount of short paid policy holders using a portion of the repair funds for these other means, and repairing only what is necessary makes up some of the other percentage. We have found that most people are afraid to turn in a claim to their insurance company for fear of rate hikes, or being dropped. They cannot afford insurance as it is yet alone risk a higher rate, or be dropped. So you have all these premiums being paid and not used!! If they are used they are most likely short paid!!! which in turn trickles down to all of the shops in the valley!!! Again who is in control?? Does the word FEAR come to anyones mind?? Am I alone on this?
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The answer is in the question.
I have been giving this whole industry thing a serious once over and the more I look for solutions the more questions arise. I think Shakespeare said it all. It sure seems relevant doesn't it?
"To be, or not to be: that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles,
And by opposing end them?"
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TO THY OWN SELF BE TRUE
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Between stimulus and response there is a space. In that space lies our freedom and power to choose our response. In those choices lie our growth and our happiness.
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BODY SHOP BUSINESS JANUARY 2009 ISSUE ABOUT DRP"S IS A GOOD ARTICLE AND SHOULD BE READ BY EVERY BODY SHOP OWNER WHO LOVES THIER BUSINESS
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I have heard from several shops that prefer to discuss labor times rather than to discuss labor rates, one of the comments, if labor times represented actual repair times then the need to raise labor rates would not be such an issue and less cars would be subject to complete loss, also it has been discussed that shops should just say no that means all shops should drop DRP Status, let the industry be as any other industry.
Any thoughts on these comments and how realistic to your business are these comments?
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