When I watch the news, I’m constantly reminded how bad things are and how unfortunate I am to be living during this time in history. When I hear how the insurance industry has been hit with heavy financial losses, I can’t feel sorry for them because all the money they lost was made by squeezing collision repairers (their property and casualty divisions were very profitable). Now more than ever, it’s important for us to pay attention to what insurers will try to do to recover their losses.
I’m convinced that the insurance companies will do what has worked for them in the past: put more pressure on us. Most shops have felt this invisible pressure already and have chosen not to make waves. They wouldn’t even dream of raising their rates for fear that they might get blackballed. Although I disagree, I understand the fear most shop owners have as they lose more and more control of their industry. But we won’t have the privilege of getting bailed out, so listen up to what I have to say.
Customer as Solution
The solution to taking back our industry lies with customers. This would seem a simple solution, except that we’re in the battle of our lives to keep from losing them not to other shops but to insurance companies. We set up our customers’ claims, repair their cars, try to make them happy and assume all the liability. But still they return to insurance companies as their loyal customers and continue to go wherever their insurers recommend.
Insurers understand that to control our industry, they need to control the customer. In fact, they have an intense television marketing plan comprised of numerous commercials that do just that. I can’t remember when exactly these commercials started, but I do know that they’re increasing in number and frequency. This troubles me because they’re aimed at taking my customers from me.
These commercials have a purpose and a direction that we as an industry should pay attention to. We have GEICO’s gecko, Allstate’s “accident forgiveness” and Progressive’s “concierge,” just to name three. They all have the same theme, which is saving the customer money and providing better service. This always makes me want to ask, where are those savings going to come from? Second, who’s giving the service? The answer is us! But the insurers are taking all the credit.
Why would insurers bother to collectively spend over $3 billion a year on advertising? Because in this economy and even with their great losses, they see the value in keeping their (our) customers. I like to watch what the insurers do and try to mimic them. With this strategy, I was able to put into place some customer retention plans of my own, many of which I blatantly copied from the insurance commercials on TV.
Market Like Insurers
I tried to imagine that I was one of my customers and that the insurance company just recommended another shop to me. What would make me a loyal customer and believe what the body shop said versus what the insurer said? The first thing that came to mind is the typical word track used by insurers:
• “If you use that shop, it will cost you more money.”
• “We won’t guarantee the work.”
• “If you use that shop, the repair will take much longer.”
So my plan was to somehow combat this crafty dialogue.
Collision repair facilities have cost, guarantee and service. No matter how you arrange these three things, I’ve found that they determine where the customer drops his or her vehicle. Sure, quality is an issue, too, but it’s not the primary driver. Today’s consumer expects quality, but most really don’t understand the difference between a good repair and a bad one. I made the mistake of spending years using quality as my marketing driver when cost and time are really more important to my customers. Think about it: What shop says it does poor quality work? None. We all do quality work, and consumers expect quality.
So, changing my mindset, I thought, what’s the best way to market like insurers? We started mimicking everything they did down to creating our own accident forgiveness plan. Also, we created a better warranty and explained why it was better. We created our own service programs that allowed us to get the customer in a rental within 15 minutes without waking up the baby in the car seat.
In doing all this, our customers became once again our most important asset. We knew that if we regained control of the customer, we would regain control of our industry.
Forgive and Forget
Our word track is not the only thing we use to defuse the insurer’s influence. For instance, how do you counter the insurer’s “accident forgiveness” offer? How do you offer cost savings when you’re not making enough money to start with? And how do you counter a concierge program?
We realized that we were offering these deep-pocket discounts to insurers and they were passing them off to our customers, taking all of the credit and our customers from us in the meantime. Remember that whoever controls the customer controls the repair process and the entire industry. It was as if a light went off in my head: “We must take our customers back!”
I thought, how could this be done? I began some pilot programs to see how they would work. We started our own accident forgiveness program. We joined a shop network (best-in-class shops) because it has a great customer care program that offers a nationwide warranty. We created our own gift card in the form of a credit card with numbers that we keep in our own database that we’re able to add bucks (accident forgiveness) to whenever we wish. This way, when an insurer tells one of my customers that it wants him or her to go some place else, he or she has a reason to return to us no matter what shop the insurer recommends.
Next, we started to educate our customers on which insurers we recommended and why, something I learned straight from the insurers. What came out of that was a premium rebate program that added accident forgiveness bucks to the cards of customers who switched from a problem insurance company. Insurers play the same game, only from the opposite direction.
We were tired of the worst insurance companies going from bad to worse, so we took a proactive stand against them. We need to quit allowing ourselves to be intimidated. Remove insurers’ intimidation and you remove their power. And soon you’ll see their intimidation replaced with respect.
It’s important to note that I stand against bad shops the same as I stand against bad insurance companies. To say that all insurers are bad is like saying that all body shops are bad. But there’s a trend of certain insurers gravitating toward seriously substandard repairs, and they’re calling this type of repair the normal standard. Now more than ever, it’s important to stop this kind of control from continuing.
Look Ahead
Every shop could stand to advertise and market itself more. We use a combination of print, radio and TV. Try to use educational “Did you Know?” ads that tell customers that they’re the ones in control. Also, state the laws when possible. Try to pilot different methods until you find out what works for you. When you find what works, stay with it. This is a long-term plan that will extend and hopefully boost the life of your business.
A final note: I stopped watching the news and instantly started to feel much better. My attitude instantly improved and I started to deal with the way things are and not the way I hoped they would be. The apostle Paul said, “Forget what lies behind and strain forward to what lies ahead.” I hope you will look ahead and create a plan to take your customers back and help us regain control of our industry.
A Word Track of Our Own
To prepare our customers for what they’ll hear from their insurance companies, we created a word track of our own. Now, we try to get the first word in whenever possible. Basically, we try to think ahead and prepare them for anything the insurers might may throw at them.
Each word track we came up with was designed to lead our customers – vehicle owners – back to us no matter what the insurers told them. You must re-train yourself to believe that the vehicle owner is your customer. You work for them, you talk to them, you need to keep them safe and happy, and you need to retain them for life. The insurance company is your “client,” and while you must maintain an equitable relationship with it, it’s not your customer. Our labor rate is the highest in our area and has been for several years, so it’s important that we explain to our customers why we charge more before the insurers have the opportunity to steer them away.
The first thing we say is, “We want you to know that no matter what the insurance company tries to tell you, we’ll make sure that you won’t be required to pay anything extra.” Our next line might be, “Would you like to leave your vehicle? We can get you in a rental right now, which will speed up the entire process.” Next, we usually explain how our warranty works and reassure our customers that they’re better off having our lifetime warranty because a warranty is only as good as the shop guaranteeing the repairs. We go on to explain that we know how to expedite repairs and that the only delays will be caused by the insurer, not us. We also explain that other things may happen when dealing with a certain insurer based on our past experience with that particular company.
Five Keys to Getting Your Customers Back
1. Create a cost savings plan.
2. Offer a warranty plan.
3. Expedite the drop-off process.
4. Use precise and effective word tracks.
5. Increase your print, radio and TV advertising.
Writer Lee Amaradio Jr. is the president and founder of Faith Quality Auto Body Inc. in Murrieta, Calif. His 32,000-square-foot state-of-the-art facility employs 65 full-time employees and does $7 million in gross sales. In business since 1979, Lee attributes his success to having a great team of quality people supporting him. Lee says that he “sees the handwriting on the wall” and believes that “now is the time for us to reclaim our industry, before it’s too late.” He can be reached at [email protected].
