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Tuesday, 13 July 2010 21:16

Using Fraud And Fear As Marketing Tools

Written by Tom Franklin

A while back, Ford used the following headline in their magazine ads: “Only Your Mother Cares More About Your Safety.” With the media today telling consumers about manufacturing defects and recalls, faulty repairs by shops, and even huge amounts of fraud, the prospective repair customer may fear for her and her children's lives if she chooses the wrong shop. Today many people are more motivated by fear than by positive motives. This may be a good time for a wise shop-owner to use this perception to his or her advantage.

Every successful shop owner needs to educate the customer about the importance of doing a quality repair and why his or her shop is the best place to get it. And maybe a few shop owners make some comments about the poor quality of a competitor. But now it may be time to talk seriously about the dangers of faulty repairs. Accelerator pedals that stick, brakes that fail to stop a vehicle, welds that don't hold, and—perhaps worst of all—repairs that were paid for and never done. These are all legitimate sources of fear that a shop owner can capitalize on when selling the reliability and integrity of his or her shop.

Recently more than fifty shop owners and estimators in Orange County were charged with fraud. This is not a new problem. An article in the January 30, 2007 Los Angeles Times [controversially] reported that an investigation by the State of California BAR “has found that billing for 43% of cars inspected so far, after being repaired had evidence of fraud with an average of $586 in overcharges for parts not used or labor not performed.” The article further reported that “about 13% of the repaired vehicles had structural issues that would indicate inadequate or defective repairs to car frames… Those inadequacies included improper welds and failure to rust-proof key parts.” It goes without saying that many of these deficiencies compromise the safety of the driver and passengers of the vehicle repaired. [Ed—the numbers cited in this article were later walked back by Sherry Mehl, the BAR chief appointed at about the time the article was written, citing flawed methodology in the survey.]

More disturbing was the case of a jury in Massachusetts who convicted a mother and son and the owner of a Stoughton auto body repair shop on charges they conspired to defraud an insurance company of $50,000 by inflating damages to a BMW convertible. I guess they were trying to keep it all in the family.

$50,000 is cheap compared to the auto body shop owner and five co-defendants in Massachusetts, who plead guilty for their roles in a $117,000 staged accident insurance fraud scam.

A recent talk by 30-year industry veteran Dale Delmege at several CAA meetings asserted that about seventy-five percent of the 40,000 collision repair shops in the U.S. provide less than total quality repairs, leaving hidden damage uncorrected. (See July issue of Autobody News). He also noted that the shop that takes the time to do a thorough, quality repair leaving no hidden liabilities is paid the same as the shop down the street that takes cost-saving short cuts. He also suggested that there may be a way to enjoy more revenue for your superior repair work.

Many potential customers coming into a shop for an estimate have just had an emotionally traumatic experience. They may be exceptionally susceptible to any reassurances that their repair will be thorough and safe. How can you challenge the deceptive claims of a competitor down the street without simply bad mouthing him or her? Dalmege suggests your should prove WHY your shop and your repairs are superior to those of a majority of other shops. Obviously, education is the only answer. You are already doing a certain amount of educating the customer. Can’t you justify the additional time it can take to show a customer examples of hidden damage and the probability of neglected repairs that would be out of sight? Perhaps you can't afford not to!

Those shops found guilty of fraud or billing for inadequate repairs may not be around for long, but for shops that are dedicated to producing an honest and thorough job, fraud investigation like this is good news. Shops with an exemplary record of complaint-free performance attract customers looking for a facility where they can be confident of the integrity of the owner and all employees. With such a high percentage of fraud in auto body repair, a shop with conscientious, ethical policies may make that shop a popular choice for both private individuals and insurance companies looking for a new direct repair facility.

Read 2091 times Last modified on Friday, 13 January 2017 02:46