GUEST EDITORIAL: Follow the Leader - BodyShop Business

GUEST EDITORIAL: Follow the Leader

We’re playing insurers in the game of business, and we’re losing. So let’s play the game their way and run our shops like the profit-making ventures they are.

We’re involved in a game with the insurance companies and we’re losing ground rapidly.

Our side of the collision repair industry operates like no other business model I know. Even the insurance companies couldn’t play this one-sided game from our point of view. Let’s put the shoe on the other foot and imagine playing the game like an insurer.

Imagine shopping for your next auto insurance policy and asking an insurance company to call five or six other companies whose names you give them to check on quotes for you. Tell them that you expect them to do this so you can be sure they sell their policy to you for the lowest price possible. Also, tell them to document who they talked to with at least three reference numbers for your file.

Then, after they jump through all of those hoops for you, tell them that they must make some changes to their policy underwriting standards in order to do business with you. Add that you want them to throw in rental coverage because you believe it should be included in an auto policy at no extra charge. When they give you a quote, fire back at them with your own price and tell them that this is all that you’re going to pay. Why? Because you did your homework and you know that “C-Minus” Insurance Company only charges “X” amount of dollars for the same policy. Then, argue with them for awhile to come to an agreed price (which will always end up being in your favor). Finally, when you receive your policy, tell them the check will arrive in approximately 30 days, if they’re lucky.

If you were to act like this toward insurance companies, they would think you were nuts. We can’t even imagine an insurer tolerating such behavior, let alone running a business this way. But collision repair facilities run their businesses this way every day. Why do we do this?

My estimators waste a lot of valuable time playing this game instead of being in the real business of fixing cars. I have certain business costs that need to be covered based on my own facility, not some other facility in my area. I need to make a profit based on my fixed cost of doing business. If insurers weren’t allowed to sell their policies at a profit, how would they make any money? There’s nothing unreasonable about a business making a profit – after all, this is the point of having a business.

We’re losing this one-sided game to insurance companies. We’ve given up the right to manage our businesses like all other businesses in America because we’ve let ourselves become victims of this present system. So it’s time we start looking at our business from a different point of view. We need to mimic the insurance companies because they have the perfect business model. They’re probably the most cost-conscious businesses I know of. They’re concerned about profit and have no problem letting us know how much cycle time and other things cost them.

Why don’t we charge an interest fee for late claims payments or a stall fee for delays insurers cause? How about an administration fee for parts searches and estimating? We should tell insurers how lucky they are to have us to repair their cars and handle their claims. We do so much for free and waste so much time playing the game the way they want us to.

Let’s start following their lead and focus on repairing collisions and making a profit. What’s wrong with playing the game their way? We need to change the game – because our team is losing.

Lee Amaradio Jr. is the president and owner of “Faith” Quality Auto Body Inc., In Murrieta California. With 28 years in business and over $7,000,000 in gross sales last year. He can be reached at [email protected]

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