Monday, 07 July 2008 05:05

When a Solution Becomes a Larger Problem

Written by Tom Franklin

Dis-solve: (verb) 1. To pass or cause to pass into solution; 2. To melt; 3. To cause to disappear or dispel; 4. To separate into component parts; disintegrate.

    The word “solution,” which we generally apply to resolving a problem, comes closest to the chemical term “dissolve” defined above. Chemically a solid is dissolved when combined with a substance which breaks it down into its basic elements. When we “solve” a problem, we may “separate it into component parts” along the way, but our real intent is to “cause it to disappear!” We can only “melt” the solid wall of a problems when we identify the core elements and the procedure that dissolves or resolves them.
    Unfortunately many attempted “solutions” simply make the problem worse, and often the “solution” turns into a problem itself. Consider the young woman who hates her mother and is desperate to leave home. To “solve” this problem, she marries prematurely. Her youth and inexperience have not equipped her for the complexities of compromise required to make a marriage work. The marriage is a worse mess than her previous life at home. The “solution” has become a worse problem. To “solve” this problem, she becomes pregnant, thinking that having a child will keep the marriage together.
    You can guess the rest. Soon she is divorced. The teen-age father can’t pay child support and so she must go to work and somehow raise the infant at the same time. Her series of “solutions” have created worse and worse problems.
    Why? Because none of her “solutions” have dissolved the original issue. The core elements of the problem had to do with her communication and relationship with her mother and her failure to get help in dealing directly with the problem. Because her “solutions” flew in exactly the opposite direction, they worsened rather than resolved the problem.


The marketing problem
The essential marketing problem is getting more quality business in the door. Like the young girl above, the typical businessperson tries strenuous “solutions” to this problem. Many follow the costly example of the Government where the “solution” of choice is to throw money at the problem.
    Hundreds of millions of taxpayer dollars spent on “improving public education” have resulted in a generation of graduates who can hardly read, spell, write or count. Billions spent on incarcerating criminals have done little to solve the problem of improving our safety or deterring criminals from a life of crime.
    Megabillions spent on drug enforcement have done little or nothing to “solve” the national drug problem. And vast amounts of body shop money randomly spent on advertising, mail campaigns or telemarketing will do little to bring new business to the average repair facility door.
    Money is simply a symbolic substance that represents stored wealth, the result of productive output. Money could be said to be stored energy. Throwing big money at a problem is like charging full speed at a closed door to knock it down rather than simply unlocking it. The full force of all of that monetary energy will do less than the simple, effortless turning of the right key (or picking the lock). But what is the key?


Identify the “component parts”
Like picking a lock, the trick is to understand the tumblers and the mechanism at hand. Why is getting new customers in the door a problem? What are the key elements to this problem? What causes a prospective customer to go to one body shop and shun another? Obviously insurance referrals are a big factor that should be dealt with, but are there other factors? Word-of-mouth referrals, name recognition and location may be major factors, but there may still be more.
    When the job is not insurance pay, cost of repair could be a big determinant (and it also influences some insurance providers). Let’s consider that one for a moment. Suppose you offered to fix all damage to any vehicle brought to your facility for free. Isn’t it true that people would be lined up down the street to get into your shop to get their car repaired? Obviously no one could repair cars for free, but at what point would a low price still get people to line up to come into shop? And in a down economy might it not be a key element?
    The situation reminds me of the story of the guy who approaches a girl at a bar and asks, “Would you go to bed with me for a million bucks?” When she replies, “Sure,” he says “How about for fifty cents?” Indignantly she says, “What do you think I am???” He replies, “We’ve already established that. Now we’re simply haggling over the price.”
    Once you’ve established the fact that a low price will attract business, the problem shifts to how low can you go and still make a profit. I realize that very few shops want to solicit business on a low-price basis, but it does serve to illustrate one direction a real resolution to the problem of getting people in the door can take.

Price, service, or quality?
In many industries, companies often choose to be recognized for one of these three factors. WalMart and K-Mart focus mainly on price. Federal Express commands a higher price because of rapid service. Mercedes-Benz commands a high price because of exceptional quality.
    Some companies strive for an image in at least two of the three dimensions. Nordstrom’s offers top quality merchandise with outstanding service, but that merchandise is far from cheap. The company that succeeds in providing all three wins every time.
    How much “quality” will cause people to line up at the door? Or how much “service” will result in people beating a path to the door? What is your shop’s main emphasis? Do you offer faster turn-around? Or a higher quality paint job with a longer guarantee? Or do you “throw in” extras to add value to the price? The shop that isn’t known for some special quality will never stand out enough to capture the attention of an abundance of prospective customers, including insurance companies scouting for a new DRP prospect.
    In an article on consolidation by Charlie Barone a while back, Bob Juniper is quoted as saying “The future belongs to the low-cost provider.” But Barone also tackles the question of how low in price can a shop go and still provide “verifiably consistent quality?”
    Obviously consolidators have the edge. Economies of scale give them the competitive edge in buying parts and materials, and they have the clout to attract insurance DRPs.

    In the United Kingdom, consolidation resulted in a reduction of shops from 18,000 in 1987 to 14,000 in 1995, and the decline may have continued to as few as 10,000 shops in the 2000s. Fortunately not every U.S. shop has to compete with a major consolidator just down the street.
    Nevertheless, the shop that gets the “consolidator message” and begins now to cut costs and provide both insurance customers and drive-in customers with good quality and service at a lower price will gradually edge out those who wait until it’s too late.
    The line may not be as long as the guy who offers to do the job for free, but a good promotional campaign to get out the word that this is a shop that provides all three: quality, service and price will get that line started sooner.


Importance of communication
In the case of the young woman above who made a mess of her life with her attempted “solutions,” effective communication could have “dissolved” enough problems to change the direction of her life. Reluctance to communicate creates many if not most of the major problems we encounter in life. Too many shop owners subscribe to that old adage, “It’s better to remain silent and be thought a fool than to speak and remove all doubt.” Every opportunity should be seized to speak up for the advantages of doing business with your shop, with customers, vendors, adjusters, business associations, community organizations and wherever anyone will listen.
    Most important is repetitive communication: Chinese water torture works with words as well. A quarterly newsletter or postcard to previous customers, prospects, insurance and fleet companies, trade organizations and the press continually keeps your name and message out where it has the possibility of drawing someone into your shop.
    Many businesspeople are reluctant to commuicate more because they imagine it may be a waste of time. Many doubt that they will get a return on the efforts they put out to communicate broadly. It has been my experience that communication has somewhat of a mystical quality. Many times I have put great effort into a mailing or telemarketing program that seemed to yield little if any results.
    But at the same time business came to me from other unexpected directions that seemed to have nothing to do with the communication I sent out. It was almost as though my communication was broadcast on a wider network, that reached out to people I had not specifically addressed. This may sound a bit strange and metaphysical, but I have found it to be a rather consistent phenomenon.
A reliable marketing principle

A marketing formula and solution to most business growth problems that you can rely on with some confidence is: “The amount of new business coming in is proportional to the amount of positive communication going out.” Communicating effectively can be a solution that can cost you very little and will not become just another problem.