If you’ve traveled the airways as much as I have, you’ve certainly run across a promotional piece that I can remember being in every flight magazine since I first traveled on commercial airlines: Dr. Karrass’s Effective Negotiating(r) Workshop.
I don’t think I’ll ever forget the expression that headlined the advertisement for many years: “You don’t get what you deserve … You get what you negotiate!”
This is so true, not only in business but life in general.
So why do we in the collision industry feel so persecuted and wronged when we don’t get what we want or what we feel we deserve?
I’ve written a number of articles on the similarities of the typical collision shop owner and the “technician,” as explained in the “E-Myth Revised” by Michael Gerber (see the August issue of BodyShop Business, pg. 50 for the E-Myth article, “The Technician, the Manager and the Entrepreneur”). During negotiations is but another example of when the technician spirit takes over and, many times, prompts us to scream, verbally attack and even throw out a few adjuster/appraisers.
The key item to realize is that if the above happens, it isn’t a negotiation.
Why does it matter if your “negotiation” tactics involve yelling and screaming? Because you’re likely dealing with a trained negotiator (i.e. an insurance adjuster), so becoming emotional won’t get you what you want.
Rule No. 1: Never react to the other party in a manner that could be categorized as unprofessional.
You can never take back threatening or unprofessional actions or words. And the person you’ve treated badly may very well become the supervisor or regional controller, so your life will continue to be miserable for as long as he lives … or until he’s transferred. (Even karate masters say it’s better to avoid the fight by not being there than to be in one!)
You’ll never learn effective negotiation skills unless you realize the other party – whether it’s a vendor, customer or insurer – isn’t an enemy. As long as this adversarial mindset is present, you’ll likely be a loser. (And since no one wants to be a loser, the battle will always escalate.)
Remember the old days … when you had a beef with another student in high school. You might put the “gloves on” and “duke it out” until someone gave up. Many times this prompted great friendships and mutual respect. But this is a different time – and a much different setting.
You need to learn to control that “technician spirit” inside of you who feels as if he’s been “wronged,” turning a negotiation into a war. You can’t win a war. You may win a battle or two …
Negotiations only are good if all parties benefit from the arrangements. So instead of thinking of the person across the table as an adversary, think of that person as a partner. If you ask the right questions or “walk in their shoes,” you’ll quickly understand their needs.
Rule No. 2: Always work to find what the other person’s real needs are and how you both can work together to win.
Too often, we look only at what we want and not at what the other person needs. And once there’s resistance to what we want, we quickly return to phrases like, “When was the last time you fixed a vehicle?” (Phrases like this will not move the negotiations in the right direction.)
Too often we don’t realize the person we’re dealing with has concerns placed upon him by his supervisor or boss. In these cases, he’s simply the messenger, not the author of the message. When you find this to be the case, ask questions such as, “We both agree it needs to be done, right? How can we accomplish this?”
It’s also equally important to understand that giving in isn’t the solution either. Many clients I’ve worked with don’t like negotiations and confrontations, so they avoid them. Whether it’s an owner, manager or front-line estimator, those who won’t step up to the plate shouldn’t be batting.
Rule No. 3: Know what you want (need). Don’t wait until the offer is given and then complain.
Negotiating isn’t about starting high and allowing the other to chisel it down to what you really wanted in the first place – or cost shifting the item into another area. This process always leads to “deals” that have plagued our industry for years. This is also one of the main reasons we have such a difficult time today getting what really needs to be included on the estimate sheet.
We’ve “buried” so many items within others and never addressed the real issue, which is agreeing on what’s needed to not only repair the vehicle, but to completely satisfy the customer so we (repairers and insurers) retain the customer for the future. This “customer focus” is absolutely the key to solid negotiations, along with being prepared to negotiate.
Always (and I mean always) be prepared. Having the vehicle dismantled, pictures taken, estimate/supplement completed and documentation of other areas, such as LKQ, aftermarket availability, etc., when the other arrives makes it easier for that person to say “yes.”
Don’t wait until the estimator/appraiser arrives to begin the thought process and to go over the vehicle together. You need to be better prepared and have proper documentation to negotiate effectively.
Very often, we believe it’s only a “price” thing, but that’s ridiculous. The supplement you’re negotiating today may be only $500 while yesterday’s was $9,000. It’s not just cost.
Too often, the negotiation preparation hasn’t been done, so each negotiator sees a different situation. Maybe that “inner reinforcement bar” you think needs replaced is still hidden under the cover. Until both of you see the exact same thing, no common ground exists.
If there’s still disagreement once you’ve performed the proper preparation, it’s most often caused by a lack of knowledge or concern on the part of the adjuster, appraiser (staff or independent) or even the supervisor. The lack-of-knowledge situations can be easily handled in a professional manner, but often aren’t. Instead of attacking the character and skill level of the other, empathize that you were also considering what he suggested … until you discovered this.
For example, there may be a factory-specific guideline that dictates a particular repair or replacement procedure, and the appraiser has estimated it as repair while you believe it should be replaced. The discussion should be along the lines of, “I totally agreed with what you planned to do, until I discovered this bulletin that covers this exact situation. I know you don’t want to justify this with your supervisor or customer …”
As for there being a lack of concern on the appraiser’s part, there’s no really good way to handle it. If you go past the person to his or her supervisor, you open yourself up to some very big problems that could last a lifetime.
Instead, I’d attempt to place myself in that person’s shoes and really figure why he doesn’t care. With some people, you’ll need to, point blank, say things like, “Why is it you don’t feel this is necessary? Have we done something in the past that causes you to distrust our judgment?” This certainly opens up the opportunity to discuss it further.
If it comes down to an operation you feel is justified, but that person refuses to authorize it, have him sign a document that places the refusal on him. Contact the customer and communicate your position and recommendations. If both (the insurer and vehicle owner) don’t wish to “pay” for the operation (customer must sign refusal document, too), then it’s up to you to decide if it should be done anyway (not paid for), not done or the entire job not done.
Each state has specific laws regarding liability in these matters. Generally, the insurance person will refuse to sign the refusal document. In that case, hold off the repairs until someone either authorizes the repairs (payment) or agrees to sign the refusal document.
Rule No. 4: The most important focus is the customer. Until this is mastered, nothing else will get better.
Today’s business model is quickly sorting out those who understand this and those who don’t. I’m certain many people misunderstand the concept of customer-focused management as well.
In any service business, there are many customers in a normal business day. The ultimate customer is, of course, the vehicle owner, but other customers include insurers, vendors, employees, etc. And each has specific needs and wants.
The key to customer-focused management is that everyone must focus on the ultimate customer … the vehicle owner. At the same time, everyone must consider how they’re going to accomplish this and how they can help each do so.
To accomplish all that, there needs to be a commitment to training. Without it, everyone learns the hard way. Currently, our industry has very little specialized training available for these needs. But it looks as if this will change quickly with the advent of technology and new entries in the training arena. Even with training, however, you need to realize that all the others involved in the negotiating process also are constantly being educated to defend their views.
The vehicle owner is constantly being educated by friends, family, radio, television, magazines and now the Internet. And not all of this education is good. Ads for attorneys prompt some customers to look for more, and the lawyers can often get it for them. This doesn’t help our industry at all. Never before has a customer had the power to get answers to tough questions. The Internet has made this possible. How so? In the past, it cost money to get advice from attorneys, and it took a lot more effort to find out what your rights are. Now, consumers can get advice on almost anything from the Internet – i.e. how to sue for just about anything, even if it’s frivolous. This makes repairers’ lives more difficult because we have to do a much better job of communicating to the customer, or we’ll be involved in these types of lawsuits.
On the other side, I have insurance negotiation workshop materials that provide the adjuster/appraiser a system of negotiation that’s not a win-win-win, but a win-lose-lose. (Guess who wins?) This is only natural for the one who’s prepared and an even better reason for you to prepare better.
Two items that caught my eye when reviewing this particular insurer’s materials were techniques suggested to get an agreed price: “droning” and “chipping.”
Droning: “This technique is particularly applicable to dealing with body shops. To most shops, time is money. The longer a conversation drags on with a shop, the sooner he/she will want to hang up the phone and get on to settling another loss. Hold the opponent on the phone and speak in a monotone voice. By doing so, you tire out your opponent. In many cases, the other party will concede just to get you off the phone.”
Chipping: “This technique is based on preparing a list of things that are weaknesses in your adversary’s claim. Make a list before negotiating. Slowly mention them. Start with your least significant chip. They are ammunition to arrive at a settlement. Do not play the last card. Remember, when playing poker, the powerful card is the one that’s face down – the one the rest of the players in the game do not know about.”
This type of workshop is obviously not a negotiating workshop as properly defined before; it’s simply a way to increase friction rather than decrease it. I would label such a workshop as “Old School Thinking” rather than “Future Thinking.” Most of the other parts of the workshop, however were basically what I’ve explained in this article and even elude to “Customer Focus.”
Rule No. 5: Beware of those who wish to tear down relationships.
Attempts are often made to appeal to our emotions rather than to our senses of logic and reason. Many shop owners are sensitive about the role of insurers, government, etc. in their businesses, and many people (insurers, other shop owners …) use this “sensitivity” to gain an audience and to get you to react with your emotional side rather than your logical one.
I’ve heard people in our industry say to go over the adjuster’s head to his supervisor. I’ve even heard people advise shop owners to “kick” adjusters out since it is, after all, your business. This is very stupid advice and normally hurts the business more than helps it.
I’ve also heard business owners from different parts of the country talk about how they do something when, in reality, it’s not really how they handle it. But it sounds nice at the time in the group setting. This type of discussion gets everyone all charged up and, unfortunately, generally the weak-minded go back home believing the others are doing it that way and get themselves into difficult situations they may not be able to live down.
It’s important to see and hear all views on a topic, but make sure to always do what’s best for your business (self) for the long term … not the short term.
Off With the Gloves
Times have changed, which means how you handle a situation must also change. If you’re still yelling, ranting and raving, and generally bullying people to try to get them to agree with you, STOP IT! (Yes, we’re yelling, but only because it’s easy to relate to!)
When you get the urge to revert to this old style of “negotiating,” remember that the person you’re speaking with is likely a trained negotiator and that by getting emotional, you’re not only making it 10 times easier for that person to outsmart you, but you’re also possibly making an enemy out of a person who you may have to deal with for years to come.
Negotiating isn’t about brawn. It’s about brains. You’ve got one, right? Use it.
Contributing Editor Tony Passwater is president of AEII, a consulting, training and system-development company. He’s been in the industry for more than 27 years; has been a collision repair facility owner, vocational educator and I-CAR international Instructor; and has taught seminars across North America, Korea and China. He can be contacted at (317) 290-0611, ext. 101, or at ([email protected]).Visit his Web site at www.aeii.net.
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Back to Basics
Over the years, I’ve had the opportunity to see how many people have accomplished many things, and it’s not as complex as you may think. Successful people:
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