Wednesday, 02 May 2007 10:33

Remove the big S from your shirt and charge full cost of repair

Written by Dick Strom
    One of Gary Larson’s Far Side comics depicts an elderly Clark Kent lounging at home as his elderly wife busies herself stitching the letters “…tupid” next to the big “S” on his Superman shirt. Stupid with a great big “S” precisely describes the position in which collision shop owners place themselves when attempting to shield their customers from every pain of dealing with insurers. Insurers use your customer loyalty as a huge profit center for their own enrichment. Read on.
    Since first hanging out our shingle 30-some years ago, our shop has been one of many that often unadvisedly did everything possible to shield our customers from the insurer albatross we have always borne. But we’ve taken steps to change.
    Don’t misinterpret me. Being customer-oriented, at least up to a certain point, is good and necessary for business. But we’ve found that beyond a certain point, it only costs us heartache, frustration, countless extra hours of work, and great loss of shop profitability, for which we receive no compensation.
    Insurers bank on the fact that your “customer devotion” will prevent you from inconveniencing the vehicle owner in any way… playing this great “C-D-card” effectively to their own advantage in every aspect of the collision repair process. The fallacy still embraced by many shop owners, that if we provide our customers a seamless repair experience they will magically be mesmerized into being our customers for life, for the most part went down the toilet the moment insurers aggressively began pushing their DRPs.
    I doubt that we’re the only business owners who have noticed how increasingly fickle customers have become in their alliances, or lack thereof, especially where money and a minimal outlay of their precious time is concerned. You may have also noticed that many customers are suckers for the lies that insurers spout when repairs are needed. Since we should all agree that we’re in business primarily to make money, your customer devotedness has to have a limit if you are going to maintain a reasonable profit from each repair.
    To assure we are fully paid for our services, we inform each customer through specific forms they must sign before we commence repairs, that we work for them (repeat ten times after me… “the vehicle owner is my true customer.”)
    We also make them aware that they may very well need to speak up to insurers for full payment. Our forms, which have been tailored from those of other Coalition for Collision Repair Excellence members to the laws of our state, explain that the vehicle owner is ultimately financially responsible for the true costs of repair that we compute, regardless of what the insurer involved feels like paying. They also sign paperwork stating that they understand they won’t be picking up their vehicle until the full costs of repair are paid. This is one crucial step in taking the big “S” off of your shirt.
    Many of your customers purchased their own insurance policy based on what was the least expensive and then wagered they wouldn’t be involved in an accident. Poor decision making on the part of the customer is not your responsibility. You should not feel responsible for customers’ mistakes, or subsidizing them.
    After 30-some years of customer relations in the collision business, I’ve learned that what worked well 30 years ago doesn’t necessarily work today. Over the years, insurers have honed their conniving skills to a razor’s edge, and many of today’s customers have been duped into assuming you will gladly leap through tiny fiery hoops for them.
    If you want to work for every customer that darkens your doorstep, profitable or not, go for it. But we want only those customers who understand that we can’t remain in business to meet their needs in the future if we don’t make a reasonable profit on each job we do today. We want only those customers who trust our shop and our workmanship enough to pay us the full cost of repair, regardless of what insurers deny. We want only those customers who will stand up for what is rightfully theirs, and ours.
    Insurers want you to fear that they will tell your customers that you’re not a “team-player.” I admit it… our shop is not a team player with insurers. Our allegiance, rather, is to our customers. The very fact that many in this industry fear to do what they know is right - working for and dealing exclusively with the customer, not the insurer - is no excuse. {mospagebreak}
    Ignorance of the law is never a viable excuse; neither will it profit you. Shops that ignorantly or otherwise deal directly with insurers, in absence of the vehicle owner, in agreeing to make repair-related decisions that have potential to cause physical or monetary damage to the vehicle owner, put themselves legally at risk. Allowing or inviting insurers to intrude upon the legal, contractual relationship you have with your customer will only place you at guilt before a judge and/or jury: Insurers will slink away from you like stink from a chamber-pot, stating, “We insurers are not the repair professional, and never have purported ourselves so to be.”
    Ignoring the legal ramifications of cutting corners that have potential to put your customers’ lives in danger, just to please your insurer-partners’ penchant for unreasonable cost-cutting  will not exonerate you in court. If you have a phobia of insurers badmouthing you, get over it!
    You can counter insurers’ untruths (or maybe, present truths) about you by becoming proactive in marketing your business to those customers you want to attract. We’ve done this, and continue to do it, and it continues to provide a steady flow of the kind of customers we want, in spite of heavy insurer-steering efforts.
    Deal with customers on their level; help them to understand that you are the collision repair professional in your area… that you are the one shop in your area that works directly for them, apart from insurer dictates (which is easy to prove if most surrounding shops are DRPs). You get the idea.
    Insurers are betting you are too fearful of them to tell your customers from the outset what to expect from their insurer of choice. We routinely make a point of fully informing our customers on what to expect from the insurer they chose, and its local representative.
    Recently following this pattern, after the local insurer rep got out only a line or so of what his company would and would not pay on her vehicle, since she had been warned by us what to expect, this informed customer verbally tore the rep to shreds, citing her rights and the legal action he and his company would face if he attempted to interfere in having her vehicle fully made whole at our shop. But this insurer rep can’t say he doesn’t know where this customer stands, what she expects, and where her vehicle will be repaired.
    There is no substitute for an informed customer. With informed customers on your side, you can remove that big “S” from your shirt, and get back to repairing vehicles profitably.
    Dick Strom, Modern Collision Rebuild, 9270 Miller Road, NE, Bainbridge Island, Washington 98110; (206) 842-3621; email: moderncol@ qwest.net.