Consolidators: Classic Collision Adds Second Location in Las Vegas
While commonplace sales and marketing strategies may still have their place in today’s MSO, they do not represent a large portion of the strategies necessary to succeed today.
In today’s collision repair industry, more has changed in sales and marketing than any other industry out there. While commonplace sales and marketing strategies may still have their place in today’s MSO, they do not represent a large portion of the strategy necessary to succeed today.
The self-help education arena has grown dramatically over the last 10 to 15 years. If you read these books, you’ll see a lot of the same techniques and strategies repeated over and over that are just bottled and packaged differently to encourage you to buy them.
But this isn’t so in the sales and marketing arena. New techniques and strategy designed to help you get in front of the customer are needed as technology changes.
In a production environment, we have many more processes and procedures that need to be done, but you still need to take a car apart, replace the parts, paint it and put it back together. That has never changed, and it never will. At least, not in the near future.
So how do you navigate all of the new techniques and ways to market and sell your company? If you’re an MSO, what you do to add bottom-line dollars to the door is different now than what it was even two years ago.
One of our mainstays and “bread and butter” marketing techniques was to market to insurance agents. Almost every major insurer out there right now is transitioning to a centralized claims reporting system where agents simply do a warm transfer of their policyholder to a centralized claims reporting center. There are no more agents referring business to shops. This profitable and reliable source of business has become a thing of the past. Smaller MSOs are now forced to reckon with mega consolidators coming into the market that have already paved relationships with large insurers. Some are also backed by Wall Street, which makes the relationship building process even more difficult for the smaller MSO and next to impossible for independent repair shops.
Just Say No
Larger MSOs that have a fear of mega consolidators coming into their market only need to remember one thing: “Just say no…” to selling to them. Why? First, mega consolidators do not want to enter a market and build brand-new stores. That’s not cost effective. It’s much cheaper for them to come into the market and buy existing businesses that are already set up, established and have the employees ready to work. Second, their presence in your market will drive up the value of your business, as most offers will continue to get significantly higher if the consolidator wants to come into your market.
I believe there’s going to be a need to get back to some of the things we used to do with sales and marketing due to consolidators coming into our markets. Remember that no consolidator can repair all of the vehicles. Implementing tried-and-true sales techniques – which we’ve gotten away from – will help protect our companies should such a competitor arise in our markets.
Dealerships remain a great source of revenue, but most are getting out of the body shop business right now. Why? Let’s say you have a service department with 20,000 workable square feet and a labor rate of $90 an hour between wholesale and retail. A good service department can cycle dollars much quicker than even the best body shops in terms of production capacity. Now, consider that the labor rate in the Northeast is only $48 an hour. Why would you want to have 20,000 square feet of production space only generating $48 an hour when you can have the same amount of production space generate $90 an hour of productive labor?
Many body shops are now taking advantage of this with dealers by forming exclusive relationships with them and handling their customers’ business. Many dealerships still have a lot of pull, second only to insurance companies, as far as where customers will go to get their cars fixed. So what would make sense in your market if you wanted to ensure your sustainability and your future? Engage your local dealerships.
Customer Before Process
With the volume that some insurers flow to our stores, it can become increasingly difficult to put the customer before the process. Procedures and employee training have become so rigid that sometimes we forget to give good customer service by simply listening to our customer. We address this in our company by reinforcing to our employees that you must always put the customer before the process.
For example, a customer comes in and wants an estimate, but we haven’t received their assignment yet. You can get so ingrained in your process that you might feel you can’t complete the estimate unless you have the assignment. Sometimes when scheduling cars, you can be bold, and it takes a special effort to relay to the customer that their business is still important to us even though we can’t take their car right away. This is where relationship skills and even sales skills are going to be needed more in the future as shops continue to close and customer choice diminishes. Those shops remaining open are going to need to learn how to say, “We welcome your business despite the fact that we’re booked.”
Sales and marketing for the MSO has taken more of a turn in terms of strategy. Sales skills now more than ever depend on your ability to get in front of your customer, or in our case the insurance supervisor. It also has a lot to do with relationship building. If you think you’re going to get a DRP in one visit or with one phone call or e-mail, you’re sadly mistaken.
The best slogan I ever heard that can be applied to the modern day MSO-insurer marketing strategy is, “Have it your way.” When it comes to the customer and to the insurer, flexibility needs to be outwardly displayed.
I can tell you for a fact that some of our own internal processes and procedures far surpass those of major companies, however those companies have hard dollars invested in processes and training. So if you think you’re going to introduce your process/procedures and have them surpass those of your potential insurance partners, you better get ready for them to walk out the door.
There are other factors that dictate why some companies do what they do, and those same processes might not work the same for your company. So, to sustain that relationship, you need to learn how to adapt.
Selling After the Sale
Selling after the sale has become important, and I think it’s one of the biggest missed opportunities of large MSOs.
Many people think that collision repair shops can’t own their customers anymore. But last time I checked, no one ever prevented you from developing your own relationship with that customer or contacting them after the sale. Things like e-mail marketing and discount coupons for future service referrals for friends and family are effective ways of continuing to engage your customers.
Our company makes an effort every year to show our local communities we care by contributing to charities. Look at companies like PayPal and Amazon that have programs that encourage giving back. One such program is Amazon Smile, in which .05 percent of all purchases gets donated to legitimate charities. That’s how important it is to cultivate your business reputation and culture so that your core base understands you’re not just a purveyor in your community but a part of it.
For many people, the word “sales” means different things. For us, the definition has evolved to, “Your ability to relay information in a positive and receptive way to your employees, insurance partners, municipalities, township supervisors, politicians, zoning people, etc., in order to obtain meaningful results.”
The worst thing you can do as a salesperson is sound “pitchy.” Traditional “yes” questions are becoming more intertwined with meaningful dialogue versus the tried-and-true, stand-alone adages of the past. Asking a customer, “If there were a way I could show you blah blah blah,” and gearing the question to generate a “yes” response probably won’t by itself be effective anymore. But if you combine that technique into a discussion and structure it in a way that the consumer ultimately draws the yes conclusion…well now you have something! These are advanced sales techniques, but our customers are more advanced as well. And depending on your business model, whether you’re a stand-alone operation or an MSO, these techniques in your arsenal could make the difference between you staying open or closed when the big boys come to town.
Customers show up at our door every day. In most cases, we didn’t do anything to earn their business other than have a relationship with their insurance company. However, the continuity of that relationship is absolutely left up to us. And that, my friends, is what can and will ensure our survival despite the competition.
If you don’t have a plan to sell care after the sale and continue the relationship, that’s up to you. In many ways, it’s like a first date. You had a good friend fix you up with an attractive woman, but now it’s up to you to keep her.
While there are many other mitigating factors as to why customers may not ever return again, the fact remains that we do have an opportunity to continue the relationship.