Many years ago a Russian named Pavlov established the laws of reward and punishment. Basically he proved that whatever you reward, you get more of, and what you punish, you get less of. Welfare societies have demonstrated that when we reward waste and inactivity, we get a lot more of it. In business, it would seem, when we reward new and repeat business referrals we should get a lot more of them. But how much is "a lot," and how far can we go with it?
As we come rolling into a new year, it seems a question on the mind of every shop owner, large and small, is "What do I have to do to make this a significantly more profitable year?" I've noticed that there are similarities be-tween superior performance in various games and sports and superior profitability in a body shop. The superior basketball or football player and the superior poker or chess player have winning characteristics that, in a shop owner, could also result in superior performance and profitability.
I was recently assisting a shop with marketing and I noticed a peculiarity about this shop that I thought might be true of many others as well. This facility is located approximately in the middle of several very different types of residents and businesses. In one direction, potential customers are primarily Asian and very family-oriented.
Many of the body shops I have called upon are located in neighborhoods that have slid downscale over the years. In these areas, most of the people who come in for autobody repair travel quite a distance. They are old customers who keep coming back or those sent to the shop through an insurance or other referral program.
Over the years, I've provided numerous shop owners and managers with marketing strategies and procedures that they agreed would increase their business significantly. The only problem was they somehow couldn?t find time to put the strategies and procedures into practice. Running a body shop is a demanding activity.
Successful shops step outside the existing business model to develop processes that improve productivity and profitability. Don Long's approach to productivity and profitability at Keyes Collision Center in Van Nuys, California, is an example of how the team concept can be enhanced to improve shop efficiency.
Collision repair facilities in several provinces in Canada, enjoy profits that U.S. shops are missing out on. They have been recycling non-deployed OEM air bags since the first installations fifteen years ago. The Insurance Corporation of British Columbia, approved their use in 2002. Hundreds of non-deployed OEM air bags have been tested in Canada and the U.S. by credible organizations over the years with no problems and no reported failures of air bag modules themselves.
"If you keep on growing, you will always be out of your comfort zone." - Modern Proverb
Many shop owners have told me this has been an unusually difficult year. The last few years home owners have been on a re-financing spree and were able to spend some of the proceeds of their accumulated equity. Now that interest rates are up along with adjustable mortgage rate increases, that additional cash is no longer finding its way into the economy. It seems more accident victims are taking the money and running rather than using it to fix their vehicles. Along with all of this, higher gas prices are causing many people to drive less, and perhaps to have fewer accidents.
Holidays can be a difficult time for the body shop business. Happy shoppers are focusing on spending their money for sweaters, ties, toys and other gifts - not auto body repairs. Unfortunately for many of them, more than 20 percent of fender-benders and banged-up bumpers occur in shopping area parking lots.