As I was discussing with a fellow shop owner one of the numerous problems that plague our industry, his response to me was, "Oh, well, there’s really nothing we can do."

What a defeatist point of view, I thought. No wonder why we, as collision shop owners, can’t seem to get ahead.

Have you ever wondered how some shops turn out higher-caliber work than others, seem to always be repairing new- and late-model automobiles and have some of the nicer, high-tech facilities? Have you ever considered that it’s because they’ve managed to overcome many of the obstacles most shop owners only complain about and accept as costs of doing business?

You know the types of obstacles I’m talking about:
1. "We don’t pay to R&I."
2. "We don’t pay to color, sand and buff."
3. "We only pay to color, sand and buff flat surfaces (not side surfaces)."
4. "We cap our materials at … "
5. "We don’t pay for ______. It’s included in your overhead." (English translation: We don’t pay for your overhead because it’s not what the prevailing competitive price is.)
6. "We want you to know, Mr. Consumer, that we can’t help you with your claim if you take your car to XYZ Body Shop because they’re not on our ‘reference list.’ "
7. "Our company guidelines will only pay for aftermarket parts when available."

I’ll address solutions to all of these scenarios within this article, but I have to caution you that some of these solutions may seem a bit drastic at first. However, all of them have worked successfully during the past 23 years I’ve owned and operated my repair facility, and most of them, in my opinion, take no more than common sense — and some guts.

Unfortunately, most shop owners feel so powerless that they don’t usually take the time to analyze the situation, weigh the consequences, confront the problem, expose the truth, present it to the customer and resolve the problem.

It’s so much easier to be non-confrontational. "Don’t want to create any waves." But have you ever thought what the result would be if there were no waves in a lake or an ocean? No waves equal no movement. And no movement equals stagnation. What happens to stagnant water? It stenches; it kills the life within. Stagnation breeds death.

Is this the state of the collision repair industry today?

When someone comes along and stirs up the water, it creates waves — and the waves create new life.

When was the last time you confronted a real problem and created the necessary waves to resolve it and give yourself some new life?

If you stop to think about it, all the problems mentioned previously are some form of roadblock to your turning out an excellent job and making a profitable return on your investment. And any time you compromise your work to resolve a problem (without confronting the problem), you’re only short-changing yourself and your customers. Ultimately, the final repair is a reflection of only you and your organization. You can blame the insurance companies all you want, but the fact is, they don’t fix cars (and they know it). You fix the cars; they pay the claims.

Once you realize that you, as a shop owner, have no ties to insurance companies legally (unless you’ve signed a direct-repair agreement, which is a different ball game), then the solution to many problems can come fairly easily — as long as you run your business in a consistent, professional manner.

If, on the other hand, you’ve signed a contract with an insurance carrier to provide work, you need to find out what the scope of your duties are both legally and professionally.

Being Independent
Before we specifically address the solutions to the problems mentioned earlier, let’s get clear on a few common industry issues.

What criteria constitutes an independent business owner? The American Heritage Dictionary defines "independent" as follows:
1. Politically autonomous; self-governing.
2. Free from the influence, guidance or control of another or others; self-reliant.
3. Not contingent.
4. Affiliated with or loyal to no one party or organization.
5. Not dependent on or affiliated with a larger or controlling group, system or the like.
6. Self-sufficient; self-supporting.

How many collision shop owners can still boast that they’re independent shop owners? How many are in name only?

Yet the majority of the solutions to common, everyday problems comes from the ability to act and respond in an independent fashion. To act independently, however, you must have the power to do so.

How do you attain this power? Through knowledge.

Why is it that we can’t say we’re independent business owners? Simply because we have chosen not to exercise our freedom to run our own businesses.

To put this in perspective, let’s escape for a moment. Envision yourself riding a four-wheeler in a vast, open grassland. Even though you’re on the vehicle, you still become frightened at the sound of roaring lions. After the initial shock, your eyes become fixed on three large, ferocious-looking lions pacing gracefully across the grass. Why are you frightened? Why did you jolt at the sound of roaring? Was it because you’re on their turf? Was it because you were out of your domain?

Now, let’s escape to the circus. As we gaze into the center ring, the ring master cracks his whip and commands the attention of six lions. This one man commands one lion to sit, the other to lay and a third to roll over — as three others watch patiently, knowing that at the crack of the whip, they can be stung.

How can one man command six lions? Why do these six lions fear this one man? Is it because he has the power to feed them? Or is it because they haven’t the courage to fight back?

Now back to reality. How do we plan to overcome problems with viable solutions when we’ve chosen to allow a ring master to run our industry? How sad is it when you own your own business, yet you haven’t the power or authority to use your own expertise to manage it? You are in your domain … but trapped in the center ring of a three-ring circus. Your customers came to you, trusting that you’d repair their vehicles with integrity. Your employees trusted that if they repaired these wrecked vehicles to their pre-loss condition, they’d be able to make a good living and reap a good reward for their hard work. Your family expected only to be able to enjoy your company for a "reasonable" period of time each day and for you to provide no more than any other "business owner" provides for his family: a house, four weeks of vacation a year, college educations, a night out once or twice a month.

Have you succeeded? Or have you cheated yourself, your family, your employees and your customers? Who is your customer?

"Even though relations with appraisers are improving, shop owners still feel insurers have stripped the collision repair industry of its freedom," wrote editor Georgina Kajganic in the June issue of BodyShop Business.

To those shop owners I say: "You’ve lost your freedom because you failed to exercise your freedom."

If you aren’t on DRPs, do you have the freedom to run your own business? Are you told what parts to use and what operations to perform? If you’re on DRPs, do they give you the freedom to operate your business as an independent business owner? Are you told what parts to use and what operations to perform?

Once you’ve answered these questions, you can resolve the problems that were outlined at the beginning of this article.

Why? Because you must be free to exercise your rights as an independent shop owner to resolve any of these problems. If you’re bound in any way or you personally choose not to exercise the independence you have as an independent shop owner, then the everyday problems really have no solution. You’ve allowed yourself to be bound and gagged by your own submission.

Overcoming Challenges
As I promised earlier, here are some solutions to everyday problems:

• Problem: Insurance adjustor says, "We don’t pay to R&I."

Solution: You respond, "If you don’t pay to R&I, then we don’t R&I. But, since we won’t be able to R&I, we also won’t be able to guarantee clearcoat adhesion. Please put in writing for the customer that although the policy doesn’t cover R&I of necessary items, the insurance company will guarantee the clearcoat not to peel or will pay the body shop to re-paint the necessary areas if the clearcoat doesn’t adhere properly."

• Problem: The insurance company refuses to R&I and refuses to guarantee the clearcoat adhesion.

Solution: Inform the customer of all the above. Explain to the customer that you can guarantee the clearcoat, but "if and only if" all the necessary procedures are performed. Then give the customer options:
1. Complain to the insurance company.
2. Pay for the proper repair — with full guarantee.
3. Don’t do anything, resulting in …
• No guarantee on repairs.
• Loss of right to have vehicle repaired properly.
(Look out — this is an open case for WreckCheck or Accident Check.)

• Problem: "We don’t pay for color, sand and buff."
Solution: Same as the previous scenario: "We don’t perform operations we don’t get paid for."

Ask:
1. "Do you expect us to work for free?"
2. "How much of your job do you perform without pay?"
3. "Would you like to come down to color, sand and buff this repair for free? No? Then why do you expect me to?"

Insurer response: "But it’s included in the refinish process."

Your response: "But not without pay. Read the P-Pages. There’s a formula for color, sand and buff."

Insurer: "But we don’t pay for it."

You: "Then I’ll have to inform the customer and let him know his options."

The customer’s options are the same as in the previous scenario.

• Problem: "We cap our materials at ‘X.’ "
Solution: "No problem. We stop spraying at ‘X.’ "

Insurer response: "What do you mean?"

You: "It’s self-explanatory."

Insurer: "That’s your problem."

You: "No, it’ll be yours when the customer picks up his car and the paint process stops in the middle of the repair."

Inform the customer and give him his options.

• Problem: "We don’t pay for that. It’s included in your overhead."
Solution: "That’s not true because my overhead is 3 1/2 times higher than what you’re willing to pay as a prevailing competitive price."

Insurer response: "Well, then, it’s a cost of doing business."

You: "That’s true. It’s a cost of doing business, and that’s why it’s being charged to this job. If you don’t want to pay for it, I’ll inform the customer and give him his options."

Some Tougher Problems …
• Problems:
— "We want you to know, Mr. Consumer, that we can’t help you with your claim if you take your car to XYZ Body Shop because they’re not on our ‘reference list.’ "
— "Our company guidelines only pay for aftermarket parts when available."

To solve some of these tougher problems, you’ll need to spend a considerable amount of time educating consumers, along with providing consistent and concise documentation. For instance, if your shop exceeds the standards set forth in a typical criteria survey but you refuse to sign it because — let’s say — it contradicts itself and sets up any shop owner who does sign it for breach of contract, your decision carries many ramifications.

First of all, your labor rates often are not considered in calculating the prevailing competitive price in your market area. And if they’re not used in the calculations, then why give them out?

Second, your shop will now be represented to consumers by the insurance company as one that refuses to adhere and comply with "their" criteria. When customers hear this or receive a letter explaining this, they’ll automatically begin to question why your shop wouldn’t "conform" to the insurance company’s criteria.

This is where consumer education comes in. You need to take the time to explain to your prospective customers why your shop can’t agree to the criteria form and why your shop exceeds the criteria form set forth by that particular insurance company. Here’s how:

• Let customers read the criteria form, and show them where it states: "The repairer agrees to perform repairs that serve to restore the damaged vehicle to its ‘pre-loss condition.’ " Then show customers the clause in the criteria where use of non-original equipment (non-OE) parts is addressed.

• Show consumers estimates written by the particular company where aftermarket parts are specified for the repair of the vehicle (this is where documentation comes in).

• Inform consumers about any consumer-related information regarding the quality, safety and fit of aftermarket parts. Having a copy of the February 1999 issue of Consumer Reports is helpful at this point — and so are any photos documenting the inferior fit of these parts. Also, inform consumers about the current class-action lawsuits disputing the quality of these parts.

• Finally, let the consumer know that due to the high standards your shop tries diligently to uphold, you can’t, in good conscience, adhere to a criteria form that even suggests the use of these parts.

At this point, you’ve presented all the facts necessary for consumers to realize that you’re actually looking out for their best interests, and they’ll have a better understanding when they go to the claims office and receive the "other side of the story."

Most of the time, consumers visit a body shop before going to a drive-in claims center, which is good for you because it gives you a chance to empower consumers with the knowledge they need to pursue the highest standard of repair possible. This "PR" also helps to build your reputation in the marketplace as a business with integrity.

Keep in mind, however, that aftermarket parts don’t have to be an impairment to the integrity of the vehicle, the integrity of the repair process or the integrity of your shop. Present the facts to consumers, and let them make the choice. Yes, it may cost them a few dollars out of pocket but, in the long run, it will be well worth it to them. Consumers aren’t stupid. Present the facts, present their options and let them make the decision. And if their insurance policy only pays for aftermarket parts, then they have a tougher decision to make:
1. They can accept an inferior repair.
2. They can pay money out of pocket for a pre-loss repair.
3. They can — after this repair —look into purchasing a better insurance policy. (There are plenty of insurance companies that offer policies to restore vehicles to pre-loss condition. Do your part to educate consumers on who these insurers are. Your customers will thank you.)

No Problem!
If you choose to operate your business as an independent business owner, you can overcome the endless, everyday problems that are thrown at you from all angles. It won’t be easy — and it will take consistent action and some time — but, in the long run, it will pay off; you’ll have control of your business.

Remember, limits exist only in your mind. If you think you’re defeated, you are. If you think you’re powerless, you are. If you think your business is being run by someone else, it probably is.

If, on the other hand, you think you’re going to exercise your rights as an independent, treat insurers professionally, educate consumers fairly and receive an acceptable return on your investment, you will.

It’s like Henry Ford once said: "Whether you think you can or think you can’t, you’re right."

Writer John Padula is president of Padula’s Body Shop, Inc. and Preferred Collision Professionals, Inc., a network of family-owned and -operated collision repair businesses in Cuyahoga Falls, Ohio.

Declaring Independence: One Shop Owner’s Story, by Melissa McGee Stories about independent body shop owners standing their ground and triumphing over insurers sometimes seem more fictional than factual, but this tale is more than collision repair lore; it’s a true story. When a customer came into Mike Wilkowski’s Connecticut body shop with a damaged vehicle, Wilkowski did as any shop owner would do: He wrote an estimate. Unfortunately, his estimate and the insurance appraiser’s estimate didn’t match. Among other discrepancies, Wilkowski had written his estimate using OEM replacement parts; the insurance company, Liberty Mutual, wrote theirs using aftermarket parts. Unsure what to do but sure he wanted OEM parts, the customer asked Wilkowski to help. "After about three hours worth of talking to everyone, from the appraiser to the supervisor to the manager, we got nowhere," says Wilkowski. "They absolutely refused to do it." But Wilkowski didn’t give up. Instead, he sent Liberty Mutual a "Repair Deficiency" form, which is issued by WreckCheck. The form stated that Wilkowski recognized short comings in the insurance company’s estimate, but that if Liberty Mutual was willing to take the risk that the vehicle would be repaired to less than pre-accident condition then, within 48 hours, he’d begin repairs exactly as they listed on their estimate — which is exactly what he did. On the estimate, the insurance company wrote $8 for pinstriping but failed to include payment for labor. So Wilkowski cut a length of pinstriping tape, rolled it up and laid it on the vehicle’s dashboard. The estimate also showed $12 for undercoating but, again, there was no payment for labor. So Wilkowski bought a can of undercoat and sat in on the front seat. Though sanding and buffing was listed on both estimates, the insurance company chose to "round down" the 2.7 hours allotted in the repair manuals to just two hours. So Wilkowski’s techs sanded and buffed for exactly two hours and then stopped — completing only half the job. When it came to detailing the vehicle for delivery, Liberty Mutual listed no labor and no materials on their estimate. So Wilkowski’s techs left the car as is — caked in polishing compound and other assorted shop materials. "Liberty Mutual tells me detailing for delivery is in my overhead, [which is what] many other insurance companies do as well," says Wilkowski. "I say, ‘How do you know what’s in my overhead? Have you been behind my desk looking through my books and records?’ " As part of Wilkowski’s plan, he kept the vehicle owner updated as repairs progressed. When the repairs were completed according to the insurance estimate, Wilkowski called the customer. Needless to say, he was quite shocked at the sight of his vehicle and stormed in the office to call Liberty Mutual. The following morning, the supervisor and senior appraiser were at Wilkowski’s shop to re-inspect the car. "They looked very hard to try to find something in the estimate that they paid for but I didn’t do," says Wilkowski, "but I knew that was coming, so I covered my bases. Everything they paid for was done. Things they didn’t pay for, I didn’t do." After the re-inspection, the supervisor called the vehicle owner and informed him they would pay to have the car re-repaired, send him an official letter of apology and give him a rental car for as long as he needed. Think the story’s good so far? Things get even better. When Wilkowski’s techs disassembled the car for the second time, they found additional damage not listed on the original estimate, so they called the appraiser. "By the time he came back here, I could have asked for a bag of coal and he would have paid for it," says Wilkowski. "He didn’t want to be involved in the controversy anymore." The moral of Wilkowski’s story and many others like his is that negotiating can work if you "stop taking the easy road," he says.