GUEST EDITORIAL: What's So Bad About Steering?
My shop actually benefits from steering and would probably be out of business without it. So what's the big deal?
By Richard Lata
12/11/2009
For those who think steering is a bad thing, I have to say that I totally disagree. We have a collision repair center that benefits from the steering process, and if it wasn’t for steering, we most likely would be out of business.
Our shop opened in early 2000. Even though we didn’t know anyone in the market area, we chose it purposefully, keeping in mind that the most efficient way to market our business was as a recommended collision repair center.
Driving a total of two hours to and from the shop every day, plus experiencing some weeks where I had only one or two vehicles to repair, a quick dose of reality set in fast. I knew I had to go out and get more work – and I had to do it soon. So we focused on what insurance companies wanted and went from a no-name shop to a preferred shop on the steering lists we’re talking about.
I think these complainers I’ve been reading about who think steering is wrong are way off base. We’re in a time when only the strong will survive. It was an absolute must for us to comply and come on board with these insurer programs if we wanted to be successful and make our business grow and strengthen over the years. Today, we do business with several insurance companies – some a lot more than others.
Not everything has been rosy with insurers, however. We did have to part ways with a very large insurance company due to the discounts we were expected to give it and the same discounts we were then expected to give to one of our largest suppliers of business. Thinking long-term, we realized this particular insurer had to go. Sure, we’re doing less work now, but we’re more profitable overall and that’s what it’s
all about.
Without steering, you have to rely too much on local advertising, which is very costly. I see it as a choice: Either pay more for advertising or comply with insurers. At least by complying with all our insurance companies, our retention rates are much better.
Most importantly, we’re on that preferred list of centers to make those repairs that will arrive at our shop tomorrow. It’s not a guarantee to repair but a referral to sell your services and shop to that customer. If the customer doesn’t like you or feel comfortable leaving his or her vehicle, it really doesn’t matter how he or she came about calling your shop or stopping by for an estimate.
Isn’t it steering when a backyard shop (or any shop, for that matter) says, “I’ll fix your car and save your deductible”? How about those dealership body shops that say, “If you don’t fix your car here, you’ll void your warranty”? I’ve heard that one from customers. Or, how about the adjuster who doesn’t like you but does like the guy up the road who says, “If you bring your car to me, I’ll buff that scratch for free”? Steering can be interpreted in all kinds of ways. Ask yourself, “What’s in it for me?” You want the same things the insurance companies want.
The names are different and the procedures are somewhat different, but the practice of steering is working well for those who are participating. There are some insurance companies I would like to do work for, but I can’t get them to call me back. That doesn’t mean I hate steering but that I really have to work harder for their business – and it may take years to get it.
Just like body shops, insurance companies are in business to profit and save money where they can. Believe it or not, that can be done without compromising a repair. Sure, there can be disagreements over a possible repair process, but in the end the vehicle gets what was needed to make a good, safe, quality and warrantable repair.
There are plenty of things I don’t like about this business and would like to change. I’m just a working man on Main Street, and there’s no bailout money for any poor decisions I or any of us make. And I’m surely not going to wait for changes or something better. Even with all that steering, we’ve struggled more so this year than any other. The wrecks are out there, but customers are choosing to hold off on repairing now if they’re able. So we do what’s needed to survive.
I don’t see how a collision center can do well without some type of steering unless that center is doing other types of repairs. We welcome any and all potential repairs steered our way, and we continue to entertain the possibility of growing the list of insurance companies we work with if and when the opportunity comes around. We thank insurers for the business we do get and we appreciate it every day. And we’ll do what’s needed to continue partnering with these companies for years to come.
Richard Lata is owner of Martinsville Collision in Martinsville, Va. He can be reached at rwlata@comcast.net.