Smith’s presentation, entitled “FEAR,” explained how the emotion of fear can be elicited by conditioning. Smith explains, “for decades, many in the collision industry have been paralyzed by fear. Not because the collision industry is full of cowards and scaredy-cats; quite the contrary, the industry is comprised of fearsome competitors with huge egos and a sincere desire to serve their communities. No, reasonable people don’t invest hundreds of thousands and, for some, millions of dollars into a business because they’re scared…no, the fear many shop owners experience is generally due to their lack of knowledge and understanding in matters that are pertinent to their business and the threat by outside interests harming their business by their efforts to undermine and harm repairers who don't fall in line with their desired manner of conducting business.”
Though the collision repair industry first became involved WITH insurance companies in order to work with them for the consumer’s benefit, this has become an effort to survive despite them, and for some, the fear of being seen as working against insurers has led to working FOR them to ensure the continued survival of their businesses. Smith believes that the majority of repairers are honest, hard-working individuals, but fear of this third-party entity has compelled many to abide by insurers’ demands to avoid conflict. Unfortunately, over time, “the mandates, concessions, discounts and omissions of reasonable and necessary processes becomes greater and great until, one day, the shop wakes up and realizes they have virtually given their business away to the point that they have little profits, huge liabilities, and fear of the future,” Smith states.
Smith went on to explain that fear develops from anxiety and uncertainty about the future, but fears can be reduced with knowledge, tools, conviction, confidence and experience. This process begins with gaining the knowledge to see fear for what it is, determining the best way to confront it, and then defeating it. In order to defeat fear, you must utilize the tools at your disposal, such as viable consulting, your state laws, industry associations, business knowledge and other readily available resources, and by gaining the conviction that you are doing the right things for the right reasons. From there, it’s simply a matter of sticking to these methods in order to gain experience and confidence.
Another tool that Smith strongly encourages shops to use is the Variable Rate Survey (VRS) as a way “for repairers to learn what their true cost of doing business is and to show where they are placed among their peers and competitors. Suggesting that all repairers should be compensated the same, regardless of their level of training, certifications, equipment and capabilities, is at best ludicrous. The only effective way to combat this intent by outside third-parties to lump all repairers together is to have independently ascertained data to dispel, combat and show where your shop lies among others in your market area. I can assure that the cost will be literally pennies on the dollar as far as investment vs. return…but like any “tool”, you must use it, and use it effectively, in order to gain the benefits and ROI.”
Of course, the predicament the collision repair industry finds itself in did not occur overnight. Initially, insurance companies sought out quality repair facilities, but after a while, “insurers began ‘conditioning’ the shops by implementing new policies and procedures,” Smith notes, comparing this to the way the behavior of young elephants is modified by binding their legs with rope until even a simple string can keep them captive. “The elephant could easily break the string but has convinced himself that the restraining force is greater than his own strength. So he gives up in defeat… Just like the baby elephant, repairers have been conditioned over the years to believe they must ‘keep in line’ and can’t depart from it out of fear of reprisal and the fear of being steered from and against… and ultimately, the failure of their business.”
So how can the collision repair industry undo what has been done over so many decades? It begins by understanding what has happened and recognizing that it cannot be cured overnight. For the solution, Smith turns to the Parable of the Boiling Frog – if you place a frog into a pot of boiling water, it will jump out immediately; however, if the frog is placed in water that is slowly heated, it will not recognize the danger until it is too late. Smith believes, “this parable illustrates how people should make themselves aware of gradual change before they suffer the catastrophic consequences. So it goes with the insurance industry in gaining control over the collision repair industry.”
Now, the collision repair industry needs to un-boil the frog, beginning by understanding what is happening and getting out of the pot before it’s too late. Smith lists the following ten steps to un-boiling the frog:
1. Know there is a better and more profitable way
2. Know that others have been successful
3. Know they didn’t accomplish it overnight
4. Know it takes commitment to be successful
5. Know that you can take the necessary steps
6. Know that you must be honest and ethical
7. Know that you must provide quality repairs
8. Know that you need the tools for success
9. Know that it won’t always be easy, but right
10. Know that if you’re not having fun…you’re likely doing something wrong!
In conclusion, Smith notes, “just as when Toto pulled back the curtain on the Wizard of Oz and saw that he was just a weak old man pulling on a bunch of cables and ropes while speaking into a loud speaker, the fear and unknowing is no longer “All Powerful”. Once one understands that insurance companies are not the "All Powerful” they would like you to believe they are and you learn that Insurers have legal obligations and liabilities, just like you and any other business, and once you know what yours are and what theirs are, it takes a lot of the mystery and unknowing away, and along with it - the fear. If you believe you can’t do it… you’d be right!”
Batchelor was pleased with Smith’s message and believes “everyone understood the need to step out of the box, but some may be unable due to insurer influence. Still, if we can educate one shop on how to address this issue, then we have achieved our goal.”