“Fly upon the wings of the wind.” Psalms 18:10
In the early 1990s I went to work selling software for CCC Information Systems. I had been in marketing and sales most of my life, but I had never seen a product sell like CCC’s computerized estimating software. Shop owners practically lined up to buy CCC’s “Ezest” product. Mitchell and ADP also got in the game and enjoyed bountiful sales. What was the secret to their success?
Recently a local shop hired a very experienced estimator. Not only had she worked in many shops, but she had also worked as an independent appraiser and an appraiser for a major insurance company. One of her tasks was to check on the shop’s relationship with DRP directors and a local dealership, She was startled to discover relationships with a couple of the DRPs had soured a bit and the relationship with the dealership was all but lost.
I have often been surprised by the creative approaches used by some shop owners to increase business. While just about everyone says they want more insurance work, I still find shop after shop that relies strictly on previous customers, word-of-mouth, and a good sign out front to bring in a few additional drive-by customers. Nevertheless, many of these tell me their business is continually dwindling and ask, what should they be doing?
Are you stressed out? It could be said that stress is simply mis-directed energy. One shop owner struggles to shape-up a poorly performing body man instead of directing his full energy to getting a really competent worker and paying him well.
There's a new buzzword among marketing professionals these days: "integrated marketing." Like most "new" ideas, it's been around for a long time but the focus has often been elsewhere. McDonald's is probably the best known for completely "integrated marketing." Their "golden arches" identity, along with the Ronald McDonald character give them an instant focal point of identity. Advertisements, stationery, website and all of the rest of their P.R. efforts capitalize on these recognizable characteristics to arrive at an integrated marketing strategy.
Economic indicators were already falling and a recession was looming when the catastrophe with the planes hitting New York's World Trade Center added to our economic pain. I'm already seeing a major slow-down in many shops in my area. "Business-as-usual" can be deadly at a time like this. What should a shop owner be doing to counteract the impact of these world events on his or her business profits?
There's an old saying: "When everyone is responsible for it, no one is." If everyone is responsible for seeing the door is locked at the end of the day and no one person is designated to do it, there's a fair chance it won't be done at all. The same thing is true of marketing. There must be a specific person designated to do the job and to follow each initiative all the way through to a satisfactory conclusion.
It's been said that one of the most effective tortures of all time was the Chinese Water Torture. Supposedly interrogation using this technique was always effective. The person being interrogated was placed under dripping water that slowly drove the man mad while it gradually dripped a hole in his head.
Around the holidays, I hear a common refrain in many body shops, and it's not a Christmas carol. You ask "How's business?" and the shop owner says, "It' s slow, but I hear everyone's slow." It's been said that "misery loves company." I could just hear this shop owner calling his buddy who owns a shop across town: "Yeah, it's slow over here, but I hear everyone's slow."
How's this for a wild claim -- a consultant with whom I'm acquainted would guarantee to solve any company's problems if they would allow him unlimited access to question every employee without revealing or reporting to management who said what during his interviews. Well, maybe it isn't such a wild claim.
If you’ve been in business a while, it’s likely you have been hit up for contributions by every organization and charity in your vicinity. When you first started out, you probably just sent a few bucks to those that struck you as desirable enough to support. But once you contribute to one, you get on the list and soon you’re swamped by requests for donations.
I have recently finished re-reading Stephen Covey's excellent book, "The Seven Habits of Highly Effective People" (Simon & Schuster Fireside Book, 1990). As I read through Covey's basic principles of personal vision, leadership, management, communication, cooperation, renewal and interdependence, it occurred to me that for every positive trait, there is an equal and opposite negative trait.
Shop owners are generally strong-willed men and women who have had to fight their way to ownership of their businesses, then fight even harder to make their businesses work. As an owner they are in a position of leadership. But are they really leaders, and does it matter?
Quite a few years ago, one of my clients was a fast food establishment. They were having a continual turn-over of managers and couldn't seem to keep one for more than a few weeks. We did an analysis and found that the job called for simultaneously watching the cooks, the clean-up people, the take-out window, the lines where employees were taking the eat-in orders, and the cash registers. When we asked a couple of ex-managers what the problem was, they said while they were watching one employee, one of the others was certain to make a major mistake. They felt it was impossible to keep track of everything they were expected to.
The autobody business has changed dramatically the last few years. Consolidators are now even moving into smaller communities that few would have ever expected just a few years ago when they started in major metropolitan areas. Insurance companies are getting more and more aggressive in their efforts to control claims costs and repair facilities -- even to the point of getting into the autobody business themselves!
I live in Los Angeles, California, often called LA-LA-LAND, the city of fantasies and dreams. Each year hundreds of beautiful young ladies and handsome men descend on this city, hoping to become stars. Many of them wind up waiting tables while they're waiting to be "discovered." After all, Fabian was "discovered" sitting on a door stoop. Elvis Presley was "discovered" by the Colonel. Many such stars are "discovered" by some enterprising promoter who sees a potential money-making machine for himself if they succeed. But even to be "discovered," the hopeful "stars" have to put themselves in some situation where they'll be seen, even if it's only waiting tables in some classy restaurant.
Almost every shop owner I speak to tells me he or she wants more business. But when we start talking about business growth, I begin to hear reluctances. Too much growth means hiring more people, which means more paper work, more reports to the government, more insurance, and on and on. It also means more capital investment to cover additional equipment and to cover accounts receivable during the interval between the time parts are purchased and checks arrive for completed jobs. Everyone wants to grow in profitability, but very few want to face the costs and pains of growth.
"Power" is a peculiar word, having both negative and positive implications. The first definition in the dictionary is simply "the ability or capacity to act or perform effectively." Hopefully your estimator possesses selling power. The most common definition that comes to mind when hearing the word is "strength or force exerted or capable of being exerted" -- military power, political power, or financial power. Similarly we may think of the meaning: "a person, group or nation having great influence or control over others."
I recently did a seminar for the Nebraska Autobody Association during their "Collision Day" event in Lincoln, Nebraska. Located, as I am, in one of the most populous cities in the world - with arguably the most cars (since we have just now begun a rapid transit system) - I wasn't prepared to address so many shop owners in such lightly populated areas, with so few vehicles to repair. Strategies which work well in a densely populated area like Los Angeles seem not to have much value for shop owners in these small, rural communities.
A couple of months ago, I wrote an article on "Funding Risk." Most shop owners want to grow their business, but in today's economy, it seems a bigger concern is simply not going backwards -- growing smaller. Taking risks to grow seem doubly dangerous when just surviving is difficult. Nevertheless, it is vital to keep growing, and finding the resources to grow may be easier than you imagined.
While doing a marketing analysis for Phil Horn at Village Auto Body Works in Westbury, New York, I was surprised to learn that mechanical work was preferred to body work in Horn's area. After all, in California very few body shops have a full-fledged mechanical shop because that service is considered to be relatively unprofitable.
We recently had an unpleasant experience with a service provider. It wasn't that his work was bad. He was a good craftsman, with state-of-the-art tools and equipment. The quality of his work was good, but he lacked the most important quality we all look for when we choose someone to serve us: trust.
Toward the end of 1980, I picked up a book entitled "The Luck Factor" by Max Gunther. In his book, Gunther tells the stories of some of the world's luckiest people, along with the stories of some of the unluckiest people. What I found most interesting was his observation that the luckiest people he wrote about all shared five very specific traits and patterns of behavior that contributed to their "luck." These traits were conspicuously missing in the lives of the unlucky people.
Charlie arrives at the shop an hour before opening time as usual. It seems impossible to get a day's work done between the 8:00 a.m. opening time and the 6:00 p.m. closing time. He rarely gets out of the shop before 7:30 or 8:00 p.m. And this is during a relatively slow period. What is it that is killing his time (and his family life)?
During the many years I have consulted with body shops, I've noticed one major difference between the most successful and those that are just getting by. The best shops always have at least one outstanding estimator that I would rate as an "Olympic-class" salesperson.
What do automotive service buyers think of their local collision repair shop - compared to other automotive services? They probably see their mechanic as the expert who fixes their engine, maintains brakes, suspension, oil, lubrication, and more. And they may have an expert who repairs and maintains their transmission. So what expertise do they attribute to collision repair shop people? Are we fixed in their minds as only being capable of pounding out dents, replacing body panels and straightening frames or unibodies? If so, we may be losing a large piece of the market.
Most business people know it is necessary to promote their business to make themselves known widely and to bring in a steady flow of new customers. What no one seems to know is how much to promote. I've found most business owners are shocked to find out what kind of volume of promotion may be needed to generate a result. How much is it necessary to promote? Enough to get the job done!
For the past three years I've watched one shop employ a "goodwill ambassador" who makes the rounds once a month, calling on agents, some DRP directors, dealership managers, fleet managers and more. This "ambassador" delivers to each target person, a newsletter, a pen and/or pad, and sometimes candy, pastry, a plant or other special item. The newsletter delivers the "sales pitch" so the messenger doesn't have to.
People generally hate surprises - probably because many surprises are unpleasant. People hate to be surprised to find out they won't get their car back on time, or that they will have to put out additional cash to get their job done. We all hate to be surprised by a bigger tax bill than we expected, or by an assessment that's going to cost us dearly.
More and more these days, I hear shop owners and managers say that they feel they're losing control over their business. Reports on insurance company manipulation, worker's comp costs, parts price increases, mandatory equipment and facility costs and more, communicate the fact that making a decent profit in the body shop business gets harder every day. What can a shop owner or manager do to gain more control over his or her own business in order to increase profits?
"The difficult we do immediately. The impossible takes a little longer."
-- World War II U.S. Army slogan
This is the third in a series of articles focusing on what I call the "DRIP" marketing system - "Delivering Repetitive Information Persistently." If you missed either of the first two articles, "Be a Big "DRIP"er to Get More Business," or "The Goodwill Ambassador - Key to Inexpensive Marketing," contact me for reprints.
Most shop owners try to get on referral programs that will bring in a steady flow of business. These might be insurance direct repair programs, drive-in programs, fleet management company programs, or contracts with government, institutional or commercial vehicle departments. In just about every case, the problem is the same: how to get the decision-maker to look at your shop or to send someone to look at your shop.
Recently I spoke with a shop owner who gave me the same line I've heard dozens of times: "To do well in the body shop business, you need insurance DRP (Direct Repair) status with several companies. Otherwise you'll never make it!"
Most summers, I hear a common line in many body shops. You ask "How's business?" and the shop owner says, "It's slow, but I hear everyone's slow." It's been said that "misery loves company." I could just hear this shop owner calling his buddy who owns a shop across town: "Yeah, it's slow over here, but I hear everyone's slow."
During the past dozen or so years that I have assisted body shops with marketing, when I speak to a potential new client I often hear the same complaint: "I've spent a lot of money on fancy literature and photos and sent packages to many insurance companies, agents and other potential sources of business, and haven't gotten a darned thing!"
These days hardly anyone escapes receiving reams of junk mail every day. If you're like me, you throw many pieces of mail into the round file without even opening the envelope. But there is one kind of promotional mail you almost can't avoid glancing at: the glossy color postcard.
In the May issue of Fast Company magazine, an article entitled "Change or Die!" provided insight into just how much people will resist change. The author notes that for a few weeks after a heart attack and by-pass surgery, patients are scared enough to make life-style changes they are told are necessary to avoid a fatal attack. But within weeks, nearly 90% have not changed and have returned to the aspects of their life-styles that led to the heart attack.
Quite a while back the Autobody News often carried an article about a character called “Doctor Dent,” by Dave Truslow, Jr. Unfortunately Dave is no longer contributing his fine articles, but perhaps he was looking perceptively into the future when he called his character “Doctor.”
What could you get for your physical body parts if they were sold one-by-one? $25,000? May-be. How does that compare to the price of a car today? There’s a good chance that the car you are driving is worth more than you are.
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.