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Is a company legitimate if it’s willing to refer work at a 5 percent commission taken from the customer’s deductible?

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Q: My name is Max Aguilar, and I manage an auto repair shop in Northern California, Bay Equipment and Repair (BEAR). Recently, we were approached by a company that goes by the name of VALUSTAR. They made a proposal to our facility for referrals at 5 percent commission, taken from the customer’s total deductible. Is this legitimate?

What can you tell me about this company? Their Internet address is (www.valuestar.com). Any information will be appreciated.

Thank You,
Max Aguilar, shop manager
Bay Equipment and Repair

Max,
Being from the Midwest, I’d never heard of this organization, but I’ve researched the organization and have the following information for you. I must admit, I was skeptical at first regarding the concept since there are so many scams out there.

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I went to their Web site and scrolled through the shop listing, and I found some of the clients we’ve worked with and even some friends. I contacted a friend on the list, and he explained the program to me. He was satisfied with the results to this point.

This organization doesn’t limit itself to the collision industry but has, rather, positioned itself as a consumer referral and reference source. It’s placed signage in many different businesses and has done much media promotion (billboards, television, radio, community events). It’s been accomplishing a “seal of approval” type image so customers can rest assured [the businesses] have been screened – almost like a Good Housekeeping approval.

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The company’s screening process, according to my friend, was accomplished by randomly surveying 200 repairs over the last five years. They rated areas of customer service, quality of workmanship and pricing as estimated, as well as a number of other areas. They’ll continue to check to make sure the level of quality is maintained.

As for pricing, my friend pays a yearly fee of around $700. The pricing of 5 percent of the customer’s deductible was unfamiliar to my friend. In fact, he felt it would be cheaper for him with the 5 percent pricing concept since he doesn’t often track the referral to the source.

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As far as I can tell, this company is a valid option and in the Bay Area is a recognized consumer referral source.


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 for more information.

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