We feature some of the best columnists in the industry including Toby Chess, Rich Evans, Tom Franklin, Mike Causey, Dale Delmege, Walter Danalevich and Lee Amaradio.
We have contributing writers from different regions of the country: Ed Attanasio, David Brown, Chasidy Sisk and Rachael Mercer.
We also have guest columistslike Richard Steffen of the CRA, and David McClune from CAA.
Collectively they represent a unique perspective with hundreds of person-years of experience. Let us know what you think, by posting responses to their columns.
To read Lee's columns prior to last January search "Amaradio" on this site from the home page
David M. Brown is a native of Philadelphia who has lived in Arizona for 30 years. He writes about subjects he is passionate about, including the car industry. A father of two, he is mentored by his border collie/pointer, Haylie, who is much more concerned with thrown tennis balls than with a beautifully repainted Aston Martin.View items...
Walter Danalevich, AAM, has owned Santa Barbara Auto Refinishing in Santa Barbara, California, since 1979. He enjoys sharing his shop management tips with other shop owners and would like to hear about yours. Contact him at email@example.com
See also his shop website: www.sbautobody.comView items...
The "Insurance Insider" is a corporate-level executive with a Top 10 auto insurer in the U.S.. Although he needs to remain anonymous, he will answer questions emailed to him in future columns. Got a comment or question you’d like to see him address? Email him at Auto.Insurance.Insider@gmail.comView items...
Rich Evans is the owner of Huntington Beach Bodyworks and an award winning painter and fabricator. He offers workshops in repair and customization at his facility to share his unique talents. He also appears on a new show on Speed Channel, Car Warriors. See his Twitter (left) and Facebook (right) feeds for more on Rich's active projects.
For contacts and design samples visit www.huntingtonbeachbodyworks.com
Larry Williams is an innovative, award winning parts manager who has been managing profitable parts departments for over 30 years. He recognizes the importance of OEM parts management to collision repairers and now works as a consultant to the industry. He can be reached for consultation at firstname.lastname@example.org.View items...
Business Beat is a new column launching May 2012 in Autobody News. It will focus on investment activities in the automobile and collision industry and will feature guest columnists on a regular basis. Opinions herein are strictly those of the author. Autobody News accepts no responsibility for investment actions taken or not taken based on this column.View items...
David Luehr is the owner of Elite Body Shop Solutions, LLC a collision business consulting firm based in Nashville, Tennessee. He is a 30-year veteran of the collision repair industry and has served on several industry association boards across the USA as well as leadership positions with companies such as Manheim and ABRA. David is an expert in Body Shop Operations and specializes in Lean and Theory of Constraints methods. Email him at email@example.com
Social networks such as Pinterest, Instagram and Tumblr are rapidly gaining momentum as content distribution tools and becoming more and more attractive for B2B purposes, including within the collision industry. When new forms of social media get hot, others fall off and disappear—so how do we know which ones are gaining while others are failing? While many body shops use one or more of the aforementioned sites, smart operators can gain an advantage over other body shops that don’t know about them or care.
Let’s examine Pinterest first, because it seems to be the best known one on this list. Pinterest is a virtual scrapbook that enables businesses, organizations and individuals to organize and share images. Users can pull videos, photos, drawings, paintings, etc., anywhere from the Web on Pinterest and other members can re-pin the images elsewhere within Pinterest. Users can organize their Pinterest pages by categorizing content on their own boards.
The obvious goal is to generate new leads and referrals to your shop by using Pinterest. More than 20% of the people who use Facebook use Pinterest daily. Women use it more (72%) and are joining it more than men (2-to-1) which is ideal for the collision industry, because more women take their cars in for repairs than men do. Pinterest has a dedicated iPhone app that gets approximately 250,000 downloads every day. And most Pinterest users are between the ages of 25–54 and earning $60,000 annually, right smack in the middle of that highly-desired demographic sweet spot where they have money and can afford to pay their deductibles.
Sure, Pinterest is used by a lot by artists, musicians, photographers and creative types, but more and more companies of all types are using it for SEO, marketing, public relations and advertising purposes. Roger Henson from Advertising Business Consultants in Willow Glen, CA is a Pinterest expert and uses it for a wide range of his clients, he explained.
“When it comes to any of these emerging forms of social media, they offer a great opportunity, because in many ways, it’s virgin territory,” Henson said. “We’re always looking for the next thing, and that’s why we’ve recommended sites like Reddit, StumbleUpon, Tumblr and Pinterest well before everyone started jumping on the bandwagon. It’s all about getting as many sets of eyes on your brand and message as you possibly can, and Pinterest works for us and our clients, including several body shops who are getting track able results from Pinterest.”
Henson likes Pinterest because businesses can use it to attract traffic to their websites while sharing content, products, services and news, he said. “We’re constantly seeing great numbers and the site is growing in leaps and bounds (145% in the last 16 months). People spend more time on it then Facebook, for example, and we’re hitting a younger audience. In the collision repair business, it’s wise to engage these younger customers, because they are the future of your industry. Once you build that familiarity and establish some trust, the rest is easy.”
Tumblr is a micro blogging platform and social networking website that allows users to post multimedia and other content to a short-form blog. Users can follow other users’ blogs, as well as make their blogs private. Most of Tumblr’s features are accessible from the “dashboard” interface, where the option to post content and posts of other blogs that are of interest to the administrator can appear. Tumblr was recently purchased by Yahoo so expect to see some investment in the product.
Larry Sawyer, a social media maven and the owner of Da Bomb Media in Surprise, AZ. His job is to be up on all of the latest social media sites and he believes that Tumblr will be gaining popularity with businesses for a wide range of reasons, he said.
“Blogging is not going away and in fact, blogging is exploding and that’s why Google and WordPress are seeing huge spikes in membership,” Sawyer explained. “A body shop can share postings from other body shops, their vendors’ blogs and even local community blogs, to keep that level of interaction high. If you’re looking for another form of social media to use, I would suggest taking a close look at Tumblr. By adding it to your dashboard, you can be a part of Tumblr quickly and easily, especially if you already have a blog. By being involved in more social media sites, you’re building your SEO and get in front of more people on the Internet.”
Instagram is an online photo-sharing, video-sharing and social networking service that enables its users to take pictures and videos and apply digital filters to them. At the same time users are sharing them on a variety of social networking sites, such as Facebook (which owns Instagram), Twitter, Tumblr and Flickr. A distinctive feature of Instagram is that it confines photos to a square shape, similar to Kodak Instamatic and Polaroid images, in contrast to the 16:9 aspect ratio now typically used by mobile device cameras. Instagram is distributed through the Apple App Store and Google Play, and it was considered valuable enough to Facebook to be worth its billion dollar purchase price.
Jeremy Eaton is the marketing manager at Collision Repair Specialists in St. Joseph’s, MO. He’s always looking out for the newest social media to support his family’s burgeoning body shop and he uses all of Pinterest, Tumblr and Instagram because he knows they attract a younger customer that will drive for many years and probably get into at least a few accidents.
“We’ve been using Instagram for two years now to share our community events and many of the awards we’ve won,” Eaton explained. “It’s all based on photographs and other images and that’s why it’s ideal for the younger demographic (18-15 yrs.). They’re less into text and more into photos, because they get a more immediate response and have more impact.
Keeping your customer informed and engaged is always the key with any type of social media and we’ve had some very favorable feedback about our Instagram involvement. Some of our younger clients request that we use Instagram to show them the progress of their car as it is being worked on in the shop.”
By easily integrating Instagram into his other forms of social media, Eaton is able to connect everything together with just one click of the mouse. “We have Instagram on a dashboard with Facebook and Twitter, for example. It’s simple and doesn’t require a ton of time to manage it. People think it takes hours and hours to do these things, but if you do it right—you can get it done in minutes.”
The mobile aspect of Instagram appeals to Eaton and his customers, he said. “Everything is going to be done on smart phones eventually. Lap tops and desk top computers and even tablets are going to eventually become less prevalent, because people want the convenience of doing their computing anywhere and at any time. So, the fact that Instagram is geared toward mobility makes it an ideal form of social media for any business, including body shops of course.”
I was surprised recently to learn of a shop that still uses sales quotas. As a professional in marketing and sales, I am very familiar with quotas, and the pros and cons of the practice. It’s likely that the various sales reps that call on collision repair shops, selling everything from computer systems, estimating software and spray booths to frame machines, are expected to meet sales quotas. It’s also likely that at the end of the month when a rep is still way under his or her quota that some drastic measures will be taken to force yet one or two more sales. That’s just the nature of using a sales quota system.
But I had to ask what a collision shop sales person could do to close more business for the shop at the end of the month? Earlier in the month he or she could have gotten on the phone and called prior customers, or placed more follow-up calls to prospects who brought in their vehicle and didn’t leave it to be repaired. Or when the shop has dealership connections, the sales rep could push hard on the dealership service drive for collision work. But at the end of the month, the story would only be told with closed tickets. What could he or she do to push that up to meet a quota?
I talked to one rep who said the game begins when a customer brings in a car to be repaired. The aggressive rep on quota barely waits until the customer is out the door before he or she is on the phone to the customer’s insurance company to get an adjuster out to look at the car. If the company says five days, he or she immediately contacts the customer to call and push his or her insurance company to get out to see the car in three days or less. The rep also pushes for a quick teardown to expedite the parts orders and avoid supplements.
If the end of the month is coming quickly and some of that rep’s vehicles have still not been completed and closed out, the rush is on to find out why not. Delayed delivery of parts is a hard problem to overcome, but supplements are a different story. I was surprised to learn that a shop owner willing to work with this kind of quota pressure would permit a rep to go the customer to approve a supplement if the insurance company is holding back on it. When the job is completed if the insurance company hasn’t paid for the supplement, the customer will get the bill. Now the aggressive rep has to convince the customer that he or she will be able to collect back from the insurance company eventually.
So here we arrive at why few shops allow this kind of last minute quota pushing. A customer who is pushed to authorize supplements and collect back from his or her insurance company may not choose to use this shop again. It was obvious this shop owner put the highest value on quotas and profits, while another might do everything possible to not irritate a customer. I could see that this shop is highly profitable and capable of bringing in plenty of jobs without worrying about retaining every customer in the long run. I could also see why many shop owners would shy away from using quotas, but might there be a way to do it without irritating and possibly losing customers?
A long history of successful companies using sales quotas says they serve an important purpose. Sales reps are strongly motivated by sales contests, sales bonuses, commissions and more. Even the mention of quotas when hiring a rep will tell an owner whether or not this person can work with that kind of pressure. Many cannot and it’s best to determine this as soon as possible. The pressure of having to meet a quota will probably drive a laid-back employee crazy but an aggressive sales type will thrive on it and draw on a depth of ingenuity to bring in or close business that otherwise could have slipped away.
After this conversation about quotas, I asked a few other shop people whether or not they used quotas in their shops. No one else I spoke to used them, but there was often a greater emphasis on targets and team closing. It seemed to me that individual quotas could be difficult to manage in most collision shops, but given the new emphasis on lean processes and team production, I think there is definitely a place for some sort of target or quota system.
At first glance this might not seem applicable to a small, independent shop but perhaps that’s where it may be needed most to “light a fire” under sometimes complacent estimators and owners who now have to compete in a much more ruthless collision repair marketplace.
Every insurance company knows that their profitability and loss cost expense relative to auto claims has many independent variables. We often have no control over them. For an obvious example, we can’t ask Mother Nature to reduce the number of hurricanes that ravage areas bordering the ocean. And we have no control over the number of accidents that our policyholders are involved in.
On the flipside, there are some variables within our control—to varying degrees, to be sure, but within our control nonetheless. I’m referring to our staff adjusters. If our staff is well trained, if we maintain strict operating procedures, and if we provide proper oversight of our employees, we can reduce our overall loss cost expense.
Therefore, most insurance carriers spend a lot of time and money to train and supervise their staff. In addition, they regularly make large capital investments to purchase or develop tools to automate an additional level of oversight. The challenge is that even the best electronic tools can’t replace the effectiveness of a human being.
Several insurance carriers have made a especially significant commitment to education. Allstate is one example. They are the largest insurer that requires their staff to be I-CAR Platinum. That’s quite an investment for a company that was recently reported as being on the verge of dropping into the third spot among the largest carriers in the United States.
(Oh, how the mighty have fallen. Not so long ago, Allstate was a lock solid No. 2 and looking for ways to knock State Farm off its pedestal. Instead, Allstate finds itself being pulled down by an otherwise benign English-accented lizard. Er, I mean gecko. At any rate, I’m sure it’s creating mayhem within Allstate.)
One thing is for certain: When a company begins losing market share, it causes them to ratchet down on expenses. Let this serve as your advanced warning: Allstate likely will be stingier than ever.
What makes Allstate’s investment in educating their staff even more interesting is the fact that other large carriers (including several I’ve worked for) don’t require any training. Some may wonder if they are taking an opposite strategy, sort of a “survival of the dumbest.” As Forrest Gump famously said, “Stupid is as stupid does.” If you don’t know how to properly write an estimate, nobody can blame you for trying to cheat them.
There are dozens of other independent variables that impact loss costs, but let’s focus on “dependent variables.” A dependent variable is loosely defined as those things that insurance companies depend upon a collision repair shop for. I never thought I’d say that we depend upon shops but we do.
Most of you are probably guessing that we depend on you for proper part selection or cycle time. Although both of those are critically important to controlling loss costs and improving profitability, there is one even more key variable. An insurance company’s loss costs have less to do with your standard operating procedures or part type selection than they do with your estimator.
Your profitability and our loss cost expense ultimately are based on your estimator’s ability to write an accurate estimate, manage a claim and follow our guidelines. If you have an experienced estimator that understands a particular carrier’s program guidelines, you are better off than 90 percent of the people reading this article. You should make sure that he or she is well compensated. The skills they have are about as rare as you receiving labor time for prime, block and fill on a repaired panel.
That individual can turn a company around and make a historically unsuccessful shop successful. I’ve seen shops that have performed at a high level for years fail miserably when their lead estimator left. Collision repair shops that have the most astute owner, ironclad operational procedures and long-tenured technicians have come to a screeching halt when they lose the glue of the operation provided by a good estimator.
I’m sure it is going to cost some shop owners money when their estimator realizes he’s worth far more than you are paying him. Great technicians are probably more difficult to replace, but you can overcome the loss with an average technician and strong estimator.
I’ve been in meetings where shops beg to remain on a program after a few months of poor performance. They are quick to indicate that they have lost their best estimator. Without trying to sounding heartless, I don’t care about that. My job isn’t to help you manage your operation. Our goal is to make sure that the best shops are repairing our customer’s cars. If you can’t do it, we’ll gladly take our work to the shop owner that realizes that having only one All-Star on your team is poor planning.
So do you have a contingency plan? If you don’t, today would be a good day to start making one.
This month we begin a new type of column that takes a look back at this month in collision history 20, 15, 10 and 5 years ago. You may be surprised how many issues we think of as recent concerns were in the news back then. Keep in mind that these stories may have turned out differently than the way they were reported at the time. Where they did, we attempt to clarify the later outcome.
20 years ago (August 1993)
Collision repairers may soon be hearing about EXACT, a Colorado-based foundation that wants to see body shops take part in an early trial of its autobody repair standards.
So far, the foundation’s executive director, Phil Freeman, has sent out applications for membership to repairers in Rochester, NY, and Chicago. If they take part, shops pay $3,160 after undergoing extensive training, testing and certification. While shops may balk at paying yet another fee for another organization that’s supposed to bring them success, EXACT wants to establish comprehensive industry standards that will be for autobody work what building codes are for building contractors.
“One of the things we’re trying to do is keep it out of the hands of lawmakers,” Freeman said. “A legislator could come in and try to establish something for an industry he’s not too familiar with.”
Already EXACT has spent three years writing up 140 pages of repair standards that Freeman expects to become even more refined over the years. Called the Uniform Autobody Repair Code, the standards will have to be approved by the collision repair industry.
“They’ve been through a technical committee of 27 shop owners,” Freeman said. “We anticipate approval around the first of the year.”
►The EXACT Foundation subsequently reached an agreement with I-CAR under which that organization would continue to develop, manage and market the code under the name Uniform Procedures for Collision Repair (UPCR)
15 years ago (August 1998)
I-CAR also made two significant announcements about its Uniform Procedures for Collision Repair (UPCR) at its annual meeting. First, Toyota Motor Sales USA, Inc., has agreed to provide its Toyota and Lexus collision repair manuals for inclusion with the UPCR. Beginning with the January update to the UPCR, subscribers will have access to the same collision repair technical information made available to Toyota and Lexus dealers.
I-CAR’s Tom Mack said he hopes Toyota is just the first of many vehicle manufacturers to make their collision repair manuals available to UPCR subscribers.
The second announcement about the UPCR made at the meeting was that 20th Century Insurance Company has become the first insurer to purchase the UPCR for widespread use by its employees.
John Bierer of 20th Century said he was charged earlier this year with improving the consistency of the estimating, adjusting and reinspection efforts of the insurer’s staff. He said after reviewing the UPCR with his claims office management, he presented it to his superiors as the solution they were looking for.
“Each one of our adjusters, our quality control reinspectors, our supervisors and mangers will have a copy of UPCR on their laptops to use in their adjusting, inspecting and quality control,” Bierer said, adding that he hopes other insurers will follow 20th Century’s lead. ”I think it’s what we’ve been looking for for quite some time.”
► I-CAR one year later shelved its UPCR product, which included collision repair procedures as well as vehicle and product manufacturer- specific information, saying sales were “reasonably underwhelming,” but a revival of UPCR has been raised by some during more recent discussions of collision repair standards.
10 years ago (August 2003)
(From Autobody News): Aftermarket parts manufacturers and CAPA are likely vexed by the newly-released “Crash Parts Certification Study” published by the California Bureau of Automotive Repair (BAR). The report blasts the parts certification process, concluding that “certification has no value to the customer…If there are problems with the certified product, the certifying entity does not stand behind their own certification process.”
Legislation enacted in 2001 authorized $125,000 to be spent by the BAR, a sub-agency of the California Department of Consumer Affairs, to study the best process for certifying crash parts, and to designate the agency to bear responsibility for overseeing crash parts certification. For two-and-a-half years, the BAR held meetings with repairers, insurers, OEMs and aftermarket parts certifiers. It sent out surveys to auto body repair shops and conducted field test on crash parts. In the end, the BAR reached several conclusions, most notably:
● Elimination of non-certified aftermarket crash parts is not a viable option. Outlawing non-certified aftermarket parts (as suggested by CAPA) would make the market less competitive and leave a shortage of such parts.
● Certification does not protect consumers from poor quality parts… If the certifying entity warranted their certified parts it would provide ‘added value’ to the certified part, and protect consumers against poor quality parts.
The study compared the CAPA Quality Seal to the well-known Good Housekeeping Seal of Approval. The Good Housekeeping seal carried a limited warranty stating that if any product bearing the seal proves to be defective within two years of the date of purchase, the product will be replaced or the purchase price refunded. “If CAPA or Global Validators feel their certification parts fit the criteria of their certification program, why don’t they stand behind their certified parts?” the BAR report asks.
5 years ago (August 2008)
The Progressive Insurance fraud lawsuit against Greg Coccaro and his New York shop, North State Custom, was dismissed. When Progressive concluded presenting its evidence and testimony, Coccaro’s attorneys moved for a directed verdict (a standard practice in many cases) and Judge Mary Smith granted the motion, dismissing the case, saying Progressive had not presented sufficient credible evidence for the trial to continue.
Coccaro issued a press release saying he was “elated with the Judge’s decision” and “extremely grateful and touched by all of the support and encouragement shown by fellow members of the collision repair industry.”
“We are disappointed by the court’s decision, and we plan to appeal,” spokeswoman Cristy Cote of Progressive Insurance.
► Progressive indeed appealed and the case was retried, only to have a jury find Coccaro not guilty in 2010; Coccaro earlier this year reached an out-of-court settlement with the insurer just days before trial was set to begin in his tortious business interference lawsuit against Progressive (terms of the settlement are subject to a non-disclosure clause).
To view a pdf file of this article with photos, click HERE.
When I see a body shop that doesn’t have a website, two things happen. First I have to recover from my surprise, then I start asking questions. I sat down recently with Angel Iraola, the owner of Net Business Consulting & Solutions in Santa Rosa, CA, and he blew huge holes in the following arguments, each of which is a common misconception about websites. Here are the top five:
To view a pdf file of this article with photos, click HERE.
Many of the decisions we make at key decisive moments determine the course of our business thereafter. Buying expensive equipment, hiring a high-priced employee, investing in a management system—each of these decisive choices may be what I like to call “pivotal decisions.” The cost of making a wrong decision could set back the progress of your entire business. But the value of making the right choice may launch your shop into a significantly higher profit position. The future of your business may balance on this pivotal moment. Unfortunately not many shop owners or managers regard a marketing decision as having this powerful, pivotal effect, but considering the cost of deciding badly I suggest that this choice is as important as any.
To view a pdf file of this article with photos, click HERE.
Body shops continue to wring their hands over insurance companies imposing their will on their business and profit margins. Shops contend that insurance companies have no right meddling in their business. I can understand shops wanting to protect their profit margins on parts. And who wants anyone telling them what to do and how to do it? For those of you who are married, you know what I am talking about.
Thankfully, I learned early on in life that taking orders was something I wasn’t good at. Thus, I am happily divorced, and the only person I take orders from is the guy who does my annual review at work.
Wouldn’t it be great if all of you could divorce yourself from the death grip that direct repair programs have on your business? Unfortunately, most of you reading this won’t say no to insurers, or can’t. Direct repair programs should be regulated because of their addictive qualities. The addiction might be stronger than crack cocaine. Not that I can speak from experience on that.
To view a pdf file of this article with photos, click HERE.
It was announced at the latest Collision Industry Conference (CIC) meeting in Phoenix that CIC’s multi-year discussion of “industry standards” may be coming to a close later this year.
Chairman George Avery announced that after “two months of talking to many individuals” about the issue, he plans to sunset the committee focused on the topic at the end of this year.
Avery said some people expressed concern that CIC was “over-reaching,” particularly when it began to suggest a structure for a new organization to oversee the final development and implementation of standards.
To view a pdf file of this article with photos, click HERE.
One rule you’ll find in many sales and marketing books is that the average sale is made after the sixth visit or call, but the average sales person gives up after the third visit or call. This information provides a reliable way to increase sales power. The usual sale in a collision repair shop is just getting the owner of a vehicle who brings it into the shop is leave the keys and let the shop do the repairs. But generally a shop also works to sell dealerships, fleet management companies, insurance companies and more on referring business to the shop. While these sales efforts involve direct calls and visits, perhaps the most common violation of this rule is the sale to the vehicle owner who comes in for an estimate.
To view a pdf file of this article with photos, click HERE.
“What’s this Google+ thing I’m hearing about?” or “Should my business have a Google+ page?” and “We just figured out this Facebook thing and now we have to worry about doing Google+?” are among the comments I’ve heard recently at CAA meetings.
I’ve been paying close attention to Google+ for more than a year now, watching it to see how it evolves and grows and reading blogs about it. The consensus is that Google+ is quickly becoming a go-to site for companies of all sizes. People and businesses like it because it offers exposure and interactivity without sacrificing security and privacy.