As new processes are used in the construction and repair of vehicles, it’s important to make sure all this new information is relayed to the people who first come into customer contact by pricing a repair: your estimators.
At the damage-analysis level, the estimator attempts to forecast the profit to be made on a job. And the more accurately the parts and labor required are itemized, the more realistic the profit forecast is.
Because the job of an estimator is so crucial, I’ve designed and developed programs for better estimating that will materially affect the bottom line of any autobody shop. The need is there and can be amply demonstrated by any shop that carefully costs a job and then finds that what looked like a money maker turned sour and ended up as a loss. Why? Because of needless comebacks and the time it took to correct a situation that could’ve been avoided had the job been accurately identified before repairs began.
The Value of a Good Estimate
A careful and thorough estimate can cut down substantially on supplemental requests, save shop time and eliminate bays sitting idle while work waits for parts or insurance/customer approvals. A more accurate estimate is also easier to sell against price-cutters when it’s explained properly to a customer who’s looking to receive a quality, no-hassle repair. The customer is impressed when care is taken to look closely at a damaged vehicle or a re-paint, and it’s easier to sell a workmanship guarantee when it’s obvious the examination was as good as it gets.
Also keep in mind that insurance companies are constantly looking for ways to reduce repair costs and to lower their exposure dollars so they can keep their premiums competitive and their customers as repeaters in the renewal game. They know it takes 10 times more money to get a new customer than to process a renewal of a policy, so insurers spend thousands of dollars to ensure their claims staffs are well-trained in areas that will help keep costs reduced.
What this means is, if your estimator isn’t as knowledgable about finding damage as the insurance personnel are about keeping costs down, your shop’s profits will suffer.
On today’s vehicles, much collision damage is hidden. It’s a product of the way cars and light trucks are built. Vital computers are often hidden behind sheet metal, and a displacement of the engine during a collision can often damage other delicate electronics as well. Some of this damage is hard to detect — let alone list on an estimate — so if an estimator isn’t fully skilled in damage analysis, he may miss damage to some of the vital components that make the car run properly. And if a supplement is called for, payment rarely covers the full time that would normally accompany the original damage report.
Educate Your Estimator
Confronted by changes in vehicle construction methods — panels that used to be welded but are now glued, refinish procedures that were once simplistic but are now complex and structures that used to have generous tolerances but now demand accuracy of a mere millimeter — repair technicians are forced to learn all the time. Proper estimating is in the same league — continuous learning is essential to keep up to date with the ever-changing picture.
Owners and managers would never dream of using a new paint line without a proper training process, but how often are estimators treated to a refresher course to keep them up to speed on their part of the process?
Looking at the job of an estimator, it’s quite clear it requires as much training and updating as the technician’s because an estimator needs to know vehicle construction, vehicle design characteristics, accident reconstruction, damage analysis, vehicle parts and passive safety systems, too. An estimator also needs to be skilled in sales and negotiation.
It’s easy to recognize the learning progression of a technician by the courses taken in various skills and processes. It’s not as easy, however, to measure the progress of an estimator — the person who first calculates the price of a job, its potential profit to the shop and the materials and time needed to complete the repair process. The reason is that while a good repair depends on the skill and knowledge of the technician, for which he partakes in ongoing education, it’s more difficult to judge the progressive skills of an appraiser. Relatively few courses are offered for estimators, and even fewer estimators are sent by shop operators to attend them.
On the Right Track
Training programs abound for technical skills and computer operation, but when was the last time you sent your estimators to a course that dealt with proper damage analysis and estimating skills? I’d guess it wasn’t recently.
But the cost of training is far outweighed by the results and skills gained. After all, good estimating is most often the difference between profit or loss on a repair.
Think of the estimate as a road map that leads your shop to quality repairs and increased profits. Doesn’t it seem logical, then, to keep your estimators up to date on vehicle construction and damage analysis? In doing so, you can ensure they’ll conduct a thorough examination and write an accurate estimate — which, in turn, will ensure your shop, and its profits, are headed in the right
Writer Neil Anderson is a member of the autobody training staff at Southern Alberta Institute of Technology and president of Anderson Autobody Management Systems. He started in the collision repair industry 27 years ago as an apprentice and has since been a journeyman, a body shop owner, an insurance appraiser and a technical institute instructor.
Look to Your Estimators
When production goals and gross profits of a shop are lower than expected or not met, most managers will look to the technicians, the shop operating systems and the procedures in place even though the whole process starts at the front door, with an estimate of the value of the work to be performed.
Has your shop failed to meet your production goals? If so, ask yourself these questions:
• Did the jobs require more time than the estimator booked on the job because of waiting for parts not originally included in the estimate?
• Was time wasted waiting for supplements to be approved?
• Was our overall capacity reduced by having bays tied up or by having to move vehicles around while waiting for parts or approvals?
• Could we improve repair-order turnover time with a more accurate damage report that would forecast the true labor and parts content of a given task?