Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

Tuesday, 27 August 2019 07:33

From the Desk of Mike Anderson: Calculating the Cost of Comebacks

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What’s the cost of a comeback?


It’s a question most shops haven’t considered; fewer shops have actually calculated the cost of a comeback. If you figured out the actual cost each time a customer has to bring their vehicle back into the shop, you’d be investing more of your time, systems or other resources to prevent it.


I’m not talking about a customer coming back for a trim piece or other another part that was on backorder at the time the vehicle was delivered. I’m talking about the customer coming back that you didn’t expect to see until their next accident. They could be returning because of a paint issue, wind noise, or some vehicle system not functioning properly – something related to the quality and completeness of the repairs you performed.


Clearly, most of the issues leading to such comebacks are avoidable through the use of such practices as having a good (preferably electronic) quality-control process in place throughout the repairs (something I discussed in a previous article), conducting a post-repair scan and test drive, and adhering to the OEM repair procedures researched at the time the repair plan for the vehicle was developed.


If you don’t have those practices in place – or if you do and something still manages to fall through the cracks – you’re likely to have a comeback. So let’s do the math and figure out how much that costs your business.


First, let’s think about some of the other indirect costs to which we might not be able to attach a dollar figure. How does that comeback impact the trust and reputation you’ve built with that customer? How much potential future business will you lose from that particular customer – or from others who hear, or read online about that customer’s experience?


But leaving those intangible costs aside, you can actually measure the other bottom-line financial costs of that comeback. Here’s how.


Start with the cost of your body technician’s time addressing the comeback. The average collision technician produces about $55,000 or $65,000 per month in sales. At a 45 percent gross profit, a $55,000-per-month technician generates $24,750 in gross profit.

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