Selling Customer Pay - BodyShop Business

Selling Customer Pay

Properly implemented, a good customer pay sales strategy can bring significant volume and profit to most collision repair facilities.

Direct “customer pay” collision repair is the only segment of the collision repair market that has shown growth for the past several years. Depending on the source of the data, customer pay now represents 20 to 25 percent of the total ROs written in collision repair shops in the U.S. annually. That’s a lot of work!

Even throughout the recent recession, customer pay work has grown. Why? Customers have high deductibles. They fear rate increases or cancellations by their insurers if they turn in claims. With the average age of today’s vehicle at a record 11 years, many people simply don’t carry comprehensive and collision coverage on their older vehicles.

Measure to Manage
Step one in the process of increasing customer pay work is to measure what percentage of your current business it comprises. Above, we noted that customer pay is running at 20 to 25 percent of total U.S. volume. What’s the percentage in your business? If 20 percent of your current business is customer pay, great job!  But most shops will find that their percentage is closer to 10, which indicates an opportunity to significantly increase sales by developing a process to sell customer pay.
If you have a management system, checking how much customer pay you do should be easy. But be careful! How is “payment source” set up in your system? Are your estimators accurately recording the source of payment on every RO? Check to make sure you have accurate data going into your system.

Measure your close ratio on customer pay as well:

(Customer Pay ROs / Customer Pay Sales Opportunities x 100 = Customer Pay Close Ratio)

The number should be better than 50 percent.

No management system? Go back through 60 days of ROs and check the payment sources. If you haven’t been tracing these sources, start today and check your payment sources in 60 days. Then get a management system.

Waste Not, Want Not
I recently observed an estimator working with a customer. The estimator, considered “great” by his manager, took the time to generate an estimate, review it with the customer, then let the customer walk out the door.

I asked the “great” estimator why that one got away.

“Turns out it was just a customer pay job,” he said. “I just didn’t want to waste any more time on it.”

How sad! The estimator took the time to write an estimate and review it with the customer, but when the customer told the estimator that they would be paying for the repairs themselves, the estimator quit selling. The customer walked out the door, probably to another shop who values the customer’s money more.
Customer pay dollars are just as green as insurance company dollars. The estimator noted above was known as a “great” estimator when working with insurance repairs, especially DRP jobs. But somewhere along the line, he succumbed to a disease a friend of mine refers to as “DRP complacency.” He’s comfortable processing a DRP job, but he’s uncomfortable processing a customer pay repair. So he lets those jobs, and their dollars, walk out the door.

Processing a DRP repair and doing all the damage evaluation, parts processing, file documentation and claims administration takes a lot more time than processing a customer pay repair. Plus, there are no mandatory concessions.

Smart collision repairers understand the value of customer pay and aggressively sell it. Don’t waste the opportunity!

Types of Customer Pay
There are two types of customer pay: 1) repairs in which the customer is paying for the entire repair, and 2) additional services that can be sold to the customer when processing insurance-paid repairs (upselling). Each one of these is different and requires a different sales technique. However, both fit into a conventional sales cycle. I went over the steps of that sales cycle in a previous article (Back to Basics: Selling, BodyShop Business, December 2010): qualification, presentation, close, handle objections, close and satisfy. No matter the source of repair, each customer should go through that cycle.

Qualification is the most important part of the sales cycle. It forms the foundation of the sale and offers the opportunity to build a relationship with a potential customer and discover their unique needs. In the DRP environment, many estimators skip through the qualification phase of the sales cycle, moving directly to the damaged vehicle and processing the claim. Unfortunately, this takes the customer out of the repair process. No wonder customers forget us.

In the sample above, the estimator didn’t find out that the customer was paying for their repairs until after the estimate was completed. That’s a little late! I asked the estimator if he would have written the same estimate had he known that the customer was paying for the repairs.

“No, I probably would have written for used parts,” he said. Too late.

Every estimator should spend time qualifying every customer. Most use some sort of “customer information form” to perform the qualification process. The most common method is to simply hand a form to the customer on a clipboard and ask them to fill it out. Great estimators complete the form for the customer and use the opportunity to ask relevant questions about the customer’s unique needs. This is the time to discover that the customer is considering paying for the repairs themselves. Payment source should be discovered during the qualification process. Simply ask the customer, “Who’s paying for the repair?”

Use the qualification process to demonstrate empathy, trust and direction as well as to uncover the customer’s unique needs and concerns. Discover who’s paying for the repair before looking at the vehicle.
Unique Needs » Every customer needs empathy, trust and direction…but the customer-pay customer needs a little more. We need to discover their unique needs. Once we’ve discovered that the customer is considering paying for the repairs themselves, it’s time to dig a little deeper.

How do you figure out what the customer’s primary concerns are? Ask them:

• “What are your primary concerns with having your car repaired?”
• “Are you primarily concerned with price?”
• “How long do you plan to keep the car?”

The customer’s answers to your questions will dictate how you evaluate the damage. For example, when asked, “What are your primary concerns about having your car repaired,” one customer with an eight-year-old Honda Civic hit on the left wheel and fender responded, “It’s my daughter’s college car. It’s just going to get hit again. I really want it safe, but I can’t spend more than $1,500 on it.”

Our evaluation on this eight-year-old Honda is going to be much different than our evaluation on a 2011 Honda that needs to be brought back to pre-loss condition. This customer told us how much he wants to spend and what the key sales point will be. A great collision repair salesperson will get the $1,500, make the customer happy and wait for the inevitable second hit!

Estimators who do a great job selling customer pay understand the value of spending time educating the customer. These great salespeople focus on offering “direction” to the customer pay client and involve the customer in the damage analysis process, constantly offering them the opportunity to make decisions regarding the repair of their vehicle.

Offer Direction
The way to sell customer pay is to really focus on the customer and their needs. All too often, I see good estimators spend time generating an estimate but ignore the customer until the estimate is complete. The estimator then reviews the estimate with the customer, gives the customer a business card and “closes” with, “Thanks for stopping in, call me when you’ve made a decision.”  That is not selling!

Keep the customer involved throughout the damage evaluation process. Offer options and explain the benefits of each decision.  Remember, the customer has no idea what the difference is between OEM, aftermarket, used or like, kind and quality parts. They don’t understand unibody, structural bonding, blending or feather prime and block. Great estimators use the damage evaluation process to explain everything going into an estimate.

In the eight-year-old Honda example mentioned earlier, the customer wasn’t concerned with color match, nor did he care about R&I trim for a blend. But he was very concerned about the use of OEM suspension parts and getting a printout to verify alignment.

The estimator in this case used props or sales aids to explain the process to the customer. He used a repainted section of door, on which the handle and trim had been masked, and another repainted section of door, from which the handle and trim had been R&I’d. He could then show the customer what the difference is between masking and R&I, and both the benefit and the cost.  He also used a refinished panel, half of which had been panel painted and the other half blended, to show the difference in color match obtained.
In the end, the estimator sold the job. The customer chose to replace the knuckle and bearing with OEM parts and receive a full alignment with printout and a used fender. He also chose to blend the door but mask the moldings, and butt the hood. The job came in at $1,750.

Some great collision salespeople like to offer “good, better, best” options. In many industries, this is a common strategy. Look at most tire stores or dealerships for examples of good, better, best. In these cases, the estimator may create three separate estimates, letting the customer choose the option that fits their needs.

Decisions, Decisions
Many customer pay customers need assistance deciding on whether to file an insurance claim. Sadly, I have frequently seen estimators hand customers a copy of the estimate and tell them, “Let me know when you’ve made your decision.”

A far better option is to ask, “Do you need some help making your decision about turning this in to your insurance carrier?”  The answer is usually, “Yes!”

If it’s a “yes,” build a presentation demonstrating the increased cost of insurance if a claim is submitted. For example:

“Do you need help making this decision?”


“Mrs. Smith, the estimate to repair your vehicle is $1,500. You have a $1,000 deductible, so you’re going to pay that no matter which way you go. How much do you pay for insurance on your car every year?”
“$800 per year.”

“Okay. I can’t speak for your insurance company, but I usually see rates increase by 20 percent for three years once a claim has been turned in. So in your case, I would figure a 20 percent increase on your $800 policy for three years. That’s $480 (.20 x $800 x 3 years = $480). So, if you turn this into your insurance company, you’ll be paying your $1,000 deductible plus $480 in increased rates, so it will cost you $1,480. Or you can pay me $1,500. That keeps your rates down and eliminates creating a point on your record. Remember, if you have a second loss on your driving record, insurance companies usually increase your rates a lot more, or cancel you. Have I helped you with your decision?”

“Yes,  I think it’s best just to fix it. I don’t want this on my record. Can I just leave it?”

Of course, this scenario could have ended differently with the customer electing to have the insurance company pay for the repair. But the important point is that the estimator became a problem-solving consultant for the customer. These are the kind of estimators that people don’t forget…and this is the first step in creating a customer for life!


The second type of customer pay is the additional work that can be sold on a vehicle that comes in for conventional insurance paid collision repair.

Remember, there are two jobs that come into the door with each customer: 1) the loss, and 2) whatever else you can sell them.

From additional collision work to details and even oil changes, additional repairs can frequently be sold to the customer in conjunction with the insurance paid loss. Create a menu of these services and products and allow the customer to choose which to purchase.

If the vehicle has additional damage beyond the insurance paid repairs, provide a separate evaluation or perhaps a “good, better, best” set of evaluations and assist the customer in choosing the best possible option for repairing their vehicle.

In any situation, the rule of thumb for upselling is: Get the primary job first, then offer additional products or services. If the customer balks, back off.  Don’t lose the primary repair.

Follow Up
A good unsold estimate follow-up process should be used every day by every estimator on every unsold estimate. Sadly, we don’t do this.

For example, let’s say a family member damaged their 2010 Toyota a month ago. They got six estimates on the repairs. It was a $2,600 repair…don’t we all want those? Not one estimator followed up with the potential customer to see if they could provide assistance in repairing the Toyota. Another sad fact is that the insurance adjuster wrote the best, most thorough damage evaluation on the vehicle.

So follow up with a call and letter on every unsold estimate. Believe it or not, you’ll capture 20 percent of those jobs! The percentage will be higher on customer pay jobs as they frequently have unanswered questions that need to be resolved. But if we don’t call and ask, they won’t turn to us for repairs.

Some feel that following up with calls or letters is being “too pushy.” Not me. I think it’s good customer service. Last year, I had four contractors bid for a fence project in my yard. Of the four, only one followed up with a phone call. For several reasons, we delayed the fence for a year. But guess who I called to do the fence once we got around to it? That’s right, the one who followed up. That was the only one I remembered, a year later.

Be accurate. Collision repairers and insurers are used to supplements, but customers are not. It’s normal to call an adjuster and tell them that there was “hidden damage” behind the bumper. But when that call is made to the customer, they’ll think they’re being ripped off! So be accurate when writing customer pay damage evaluations. If there is potential additional damage, it may be better to gain approval for a teardown, diagnosis and blueprint so that supplement issues can be addressed up front. If significant supplemental damage is found, the customer may be better off contacting their insurer. Before teardown, be sure to document all damages and photograph everything just in case it turns into an insurance claim.
Disclose everything. If you’re writing two evaluations – one insurance estimate and one customer pay estimate – disclose the difference and spell out “customer pay estimate only” on the customer pay estimate. That customer pay estimate will find its way to an adjuster. It’s best to explain the difference in repair and warranty right on the estimate – in BIG letters! If your shop has a DRP with one of the insurers with a “most favored nation” clause in their contract, never drop labor rates on customer pay estimates below the DRP rate. The insurers may ask for that lower rate for all of their DRP work, under the terms of your DRP agreement.

Do not sacrifice a safe repair. In many cases, price is a driving factor in the customer’s decision to pay for their repairs. That’s fine, to a point. Today’s vehicles are very complex and require specific repair procedures. Don’t sacrifice a safe repair just to get the job. Remember, you’re supposed to be the repair expert in court. “I wanted to save a few dollars” is not a valid defense if you get sued later for shoddy or unsafe repair work.

Customer pay is the only growth segment in collision repair and is too important to ignore. Selling customer pay repairs requires  thorough qualification and a focus on offering direction to the customer. Customers who’ll be paying for their collision repair aren’t familiar with our industry, and we need to spend more time educating them on the process and offering multiple solutions, options and prices. We must be more accurate in our damage evaluation process and avoid supplements. Increasing customer pay business, like all business, requires a solid follow-up process for unsold estimates.

Properly implemented, a good customer pay sales strategy can bring significant volume and profit to most collision repair facilities.

Hank Nunn worked in the collision repair industry in a variety of roles for more than 35 years. He is now retired. If you would like more information on the subject you just read about, email BodyShop Business Editor Jason Stahl at [email protected].

You May Also Like

Auto Body Shop Team-Building: What is Chemistry?

“Chemistry” is such a nebulous and mysterious concept that everyone struggles to put a finger on it.

What is chemistry? No, I’m not talking about molecules and Bunsen burners but the relationships between people. 

It seems nobody can define what it means for people to have “chemistry” between each other; it’s such a nebulous and mysterious concept that everyone struggles to put a finger on it. I think we know it when we feel it, or don’t feel it, but when we’re asked to explain what it is, we can’t find the words. Or we say it’s when people “gel” together; well, what does gel mean?

Facebook Interest Groups: Down the Rabbit Hole We Go

I joined a Honda Civic 11th Gen Facebook group and quickly realized I was out of my element.

Collision Repairers: Take the Oath … Continued

Taking back the industry begins with collision repairers starting to work together for the benefit of both themselves and their customers.

AI and Auto Body

Artificial intelligence is making an impact in the auto body industry, streamlining the estimating process and improving the customer experience.

Building Charitable Giving into Your Auto Body Shop’s Business Plan

Planning, thoughtful implementation and thorough tracking of results will deliver a successful philanthropic program that also delivers a return on investment.

Other Posts

Exit Strategies: Personal Vision & Financial Planning

The most critical first step in an exit or transition plan is to develop a financial plan and personal vision of what your life will look like post-business.

Collision Repairers: Will You Take the Oath?

Today’s collision repairers are challenged with a new set of concerns, one being the need to follow OEM repair procedures.

Three Generations Keep Trains Running on Time at CARSTAR Jacobus

CARSTAR Jacobus Founder Jerry Jacobus and son Dave share a passion for collision repair and also model railroading.

Auto Body Repair: The Right Way, the Wrong Way and Another Way

In a perfect world, every repairer would make the right decisions in every repair, but we don’t live in a perfect world.