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
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.