A Unique Animal
The collision industry is unique in that it’s comprised of thousands of small business that not only must compete with each other, but also must compete with the huge and powerful insurance industry.
In most industries, businesses compete with each other for patronage by keeping their prices in line with what their competitors charge and by what the consumer will pay.
For the most part, however, the consumer isn’t part of the equation in the collision repair industry. And we seldom think about what our competitors are charging because we know what the insurance companies are paying. And for the vast majority of repair shops, these figures are the same.
Here’s where our ignorance comes into play. If you were to survey the owner or manager of every body shop in the country about their level of education, you’d find the overwhelming majority of them have only a high school education.
Stop and think about who the people are in this business. Think about high school. Remember the gear heads? Remember the guys with the cool cars? Not the spoiled rich kids, but the guys who built their own. How’d they do in the classroom?
The kids I remember (and I went to three different high schools) didn’t do too well in class, if they even bothered to show up. But they did great in shop, and they always had money because they were always working on cars.
Then you have the kids who went to trade school instead of high school. I’ve hired many young kids who attended these schools. Academics were not a priority. These kids went on to work in a body shop and eventually opened their own businesses. And very few of them continued their academic education, leaving most of them with what they could barely call a high school education.
Well, folks, historically, this has been the core of our industry.
Now consider the insurance industry. This is an industry made up of people with business degrees. Those nerds you used to pick on in school are now getting even. They went on to college, learned about business, economics, law and psychology, and they’re now whooping your butts in business.
So who’s cool now?
The educated insurance industry is busy building empires, cozying up to politicians, infiltrating your state’s insurance departments and turning the business environment to their favor.
What are you busy doing? How many of you are running your offices and also slinging mud out in the shop with your employees? How are you supposed to run your business successfully when you’re spending time repairing cars?
As an industry, how are we supposed to compete against the insurance industry when our average owner or manager can barely claim a high school education?
While we were barely getting by in high school and focused on cool cars and impressing girls, the poindexters were getting an education. And as we get older, fatter and worn out from years of abusing our bodies in the body shop, these nerds are beginning their middle age crisis – buying cool cars and attracting hot chicks with their money and power.
To add insult to injury, when it comes time to negotiate with you – the CEO of your business, the master of your domain – the insurance company sends out someone from the bottom of their hierarchy, a lowly appraiser (no offense to our friendly appraisers out there). One of your own kind.
Perhaps the best illustration of this intellectual disparity is the mechanical repair business. There again, much of that industry is run by ex-gear heads and high school graduates – not a reservoir of brain power. But they only have to compete with each other. They’re on a level playing field.
They’re not competing against Forbes 500 corporations run by highly educated business professionals. And without the insurance industry to compete against, labor rates have kept up with inflation and, more importantly, kept pace with what consumers are willing to pay.
Am I Making Sense Now?
Do you still think my first statement was harsh?
We don’t get together because we can’t. We can’t muster the intellectual strength to pick up the phone and introduce ourselves to our competitors. We’re too busy running our own shops and worrying about the shop down the street that’s become a big whore by taking on every DRP out there and is now stealing all your work.
So you want to put insurance companies in their place? Well, they are in their place.
We, however, need to change our place. We need to elevate ourselves to their level.
Frank, you couldn’t have asked a more important or relevant question. This industry of ours has grown and succeeded despite our inabilities.
But in certain parts of the country, there is dissent. Some shops are quietly standing their ground and challenging the insurance companies. Other’s are raising hell, filing lawsuits, getting an education and learning from other successful businesses how to stand toe-to-toe with the Goliath we know as the insurance industry.
They’re using some of the same methods the insurance industry uses by lobbying politicians, becoming friendly with state officials and hiring attorneys to advise them. These few shops owners are changing the industry without your help.
For instance, here in Connecticut many shop owners are using the insurance companies’ own tactics against them. They’re lobbying the state representatives, meeting with the attorney general, challenging the state’s Insurance Department and Department of Motor Vehicles, and writing to the governor, explaining the problems we face when dealing with the insurance industry. We learn from each other. We know our competitors. We pick up the phone and talk to each other occasionally, not to discuss pricing or to collude with each other, but to learn how other shop owners and managers deal with the same problems we have.
Just like Progressive can give you their pricing and the prices of its competitors, many shops in Connecticut know what competing body shops charge. And we don’t all charge the same.
Rates are public knowledge, required by the state to be posted in plain sight. All you have to do is survey the other shops in your area. This familiarity we share has also softened the cut-throat atmosphere that’s so prevalent in our industry.
Ignorance Is Fixable …
None of this was meant to be insulting. It’s meant to be a good kick in the butt. And if there’s ever been a group of people who need it, it’s us.
There’s a huge difference between being ignorant and being an idiot. Ignorant people don’t know; idiots can’t know.
Our industry is full of smart people, but most of them don’t have the necessary education to compete with the insurance industry. But we have huge potential.
We’re quick learners. We just need to get educated.
If we were idiots, we wouldn’t have the ability to learn, and we could garner sympathy. But we can’t expect sympathy if we refuse to educate ourselves.
Unfortunately, American culture has become one of victims. Politicians and the politically correct have succeeded in transforming about 50 percent of our population into victims requiring our sympathy and tax dollars.
Are you willing to be a victim? Or are you going to join the growing ranks of those collision repair professionals who are educating themselves, those who are turning their complaints into action?
Writer John Shortell is body shop manager at Secor’s Collision Technology in New London, Conn. He’s been in the collision industry for 20 years and has developed computer software for body shop scheduling called BodyShop Schedule Pro. For more information on the software, visit www.bodyshopsolutions.com.