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.

Friday, 10 April 2020 15:40

From the Desk of Mike Anderson: Now More Than Ever, Shops Need to Renew Their Focus on 'Capture Rate'

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Even before the coronavirus outbreak, I was telling shops I work with a renewed focus on “capture rate” was increasingly important. Now it’s become critical.

Here’s why: Look at any reliable source of claims counts in the U.S. over the last couple of years, and you’ll see they are declining. The increasing number of vehicle on the road with advanced driver assistance systems (ADAS) is reducing accidents. Not by a lot, and it varies a bit by region, but by about 2 to 4% a year overall, most analysts agree.


That might not be particularly noticeable---yet. I think it has been masked by shops feeling like their sales increased in recent years, but that’s because severity has been getting higher. The ADAS impact on claims count has also been offset until recently because low unemployment and low gas prices were keeping more vehicles on the road for more miles.


But we’re a little bit like the frog in that old analogy: Put a frog in a pot of boiling water, and it will jump out. But put it in a pot of tepid water and only slowly bring up the temperature, and the frog will boil to death.


Similarly, a 2 or 3% decline in claims counts each year might be easy to ignore, but in five or seven years, you’re going to be wondering why the water around you has gotten so hot.


So now, and especially in response to this pandemic, we have to get back to the fundamentals, including focusing on capture rate, something most of us did when we were first in business. You need to convert more of your potential customers into actual repair orders.


How do you do that? How about following up on estimates written? If a customer gets an estimate but doesn’t schedule the job, call them the next day, then three days later, then five days after the estimate.


One of the major clients I work with said those type of follow-up calls are helping them capture 20% of those jobs that weren’t scheduled at the time of the estimate. That’s a big deal.


The pandemic and work slow-down has shops following up like never before. I talked to a shop in late March who told me, “We’re following up on estimates we wrote a year ago.” The reality is all shops should have been doing that type of follow-up all along.


Another thing you should be doing: Monitor where your work is coming from. Most management systems can help you do that. Unfortunately, I look at many shops’ “referral” or “source” reports and see just generic categories like “insurer” or “internet” or “dealer.” That’s not good enough.


Capture your source information in detail. Let’s say you’re a direct repair shop for ABC Insurance. If you run the source report and see you repaired about 20 cars a month through DRP claims paid for by ABC, and now you’re only doing 15 a month, you need to get proactive and find out why.

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