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Your Mission: Educate Consumers

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"How can we better educate our customers so they can make more informed decisions about choosing a repair facility?"
— Timothy Kilkeary, v.p., Kilkeary’s Auto Body, Inc., Eighty Four, Pa.

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Since I took over my family’s business in 1984, the collision repair industry has been on a roller coaster ride of changes, twists and turns. Many have been positive, but some have been negative — putting hundreds of body shops across the nation out of business. Direct-repair programs (DRPs), increased governmental regulation, pricing controls by insurance companies and consolidation by major industry giants have caused many body shops to close their doors or, worse, compromise their level of service to win the support of insurers.

And the situation is only going to get worse.

In the last five or six years, close to 20,000 body shops across the country were closed or bought out by larger companies. Some experts predict that within five years, the 40,000 or so shops currently operating across the nation will dwindle down to approximately 12,000. If the turmoil in our industry is strong enough to cause more than two in every three body shops to go under, you can only imagine the confusion our customers experience as they try to sort out their options when it comes time to get their vehicles fixed.

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As the president and owner of Three-C Body Shops, Inc., I’ve been able to expand one shop into a network of 11 locations throughout central Ohio by positioning myself as a proponent of consumers. How? By educating them on their rights and options in collision repair.

Why Educate Consumers?
I adopted this consumer-education position when I took over my dad’s shop because I felt it was my only chance to succeed in an industry under constant duress. First, the amount of available business industrywide had decreased and was showing no signs of improving. In 1988, 37 million vehicles needed collision repair; by 1995, that figure had dropped to 18 million, and it’s expected to plummet to 12 million by 2005.

On top of these industry-specific conditions, consumers in general have been undergoing changes that significantly affect any service-providing company. People are more sophisticated, more time conscious and considerably more discerning in their expectations of quality service. As consumers’ needs escalate, historically low unemployment rates have businesses struggling to find quality employees to deliver the level of service that customers demand.

These trends cut across all industries, and the new era of enhanced customer service has challenged business owners nationwide to find solutions that live up to stringent customer expectations.

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Unfortunately for our industry, DRPs reared their ugly head in the early ’90s, right in the middle of the collision repair recession. DRPs seemed to be an answer to the prayers of thousands of body shop owners searching for a way to secure their piece of the rapidly decreasing business pie. Many shop owners were only too glad to strike deals with insurance companies in exchange for referred business. Unfortunately, to remain profitable and meet the demands of DRPs, many shops were forced to use non-original parts, limit the extent of some repairs, perform repairs on vehicles that should have been deemed total losses and take other steps that resulted in lower quality work. Ultimately, the use of DRPs by so many body shops damaged not only the quality of service the customer received, but also the credibility of the industry as a whole. DRPs also led to the coinage of a new term to describe the quality of work performed: commercially acceptable. Under the terms of DRPs, insurance adjusters justified sub-standard repairs by classifying them as "commercially acceptable."

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Finally, to earn business from insurance companies, many shops engage in bidding wars with each other. And the lower the price the shop offers, the lower the quality of the repair. Unfortunately, participating in DRPs forces body shops into complying with many stipulations, including taking measures to lower the cost of repairs. Many body shop owners end up losing control of managing their businesses in their efforts to meet the demands of DRPs.

I became increasingly frustrated with the circumstances I saw around me. I was determined that Three-C wouldn’t compete on the basis of price, since the cost of repairs are meant to be borne by the insurance company and not the consumer. Also, I was upset at the unethical turn of events our industry seemed to be taking, especially because it was all happening right under customers’ noses.

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I had no intentions of turning Three-C into a DRP shop, but I had to do something to help my family’s business remain competitive through the crisis the collision repair industry was facing. I had no choice but to tell my customers the truth about insurance companies and the negative effects of DRPs and to accept the consequences of the action: namely ostracization by insurers and other shops in the industry.

Championing Consumers
I launched an aggressive marketing campaign that told all, which solidified Three-C’s position as the shop that educated consumers. The advertising campaign, which aired on radio stations throughout central Ohio, was one of the quickest and most efficient methods for reaching consumers and educating them about the dangers of DRPs. The campaign also informed customers that they did, in fact, have a choice about where to take their cars for repairs. Educating consumers also let me stay in control of my own shop. Customers choose me because I offer quality repairs, not because I appease insurance companies by cutting corners and cutting costs.

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As you can see in the following copy for my ad, "DRP Agreement," the message was direct and to the point. While it raised many eyebrows, the marketing campaign was a sure-fire way to compete with other body shops without having to compromise the quality of my service, make deals with insurance companies or compete on the basis of price:

"This is Bob Juniper with Three-C Body Shops. I’ve got my hands on a direct repair shop agreement written by the insurance company. This is what a collision shop must sign in order to be on the list. Hold on to your wallet.

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Item one. Minor appearance damage will not be included in the estimate.

In English, this means the shop agrees to overlook some items in the repair process. … You lose.

Item two. The use of non-OEM, original equipment parts, is mandated where applicable.

Translation: the shop is required to use aftermarket or imitation parts. … You lose, again.

Item three. Current discount on parts and labor is ____________ (blank).

This amount is to be filled in by the collision shop. And that means the cheapest priced shop gets the deal, not the quality-driven shop.

Strike three … You’re out!

I’m not making this stuff up! Want a copy of this agreement? I’d be more than happy to fax it you. Call me at _________________.

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Three-C Body Shops. We care about you and your car."

Three-C’s anti-DRP ads were the first in a series of consumer education spots. Throughout all the variations Three-C has created to secede the DRP campaign, my advertisements and commercials have the same approach: I’m talking directly to collision repair customers, giving them information they should know about getting their collision-damaged cars fixed.

I’ve covered such topics as:

• the insurance company’s obligation to pay for rental cars;

• the insurance company’s obligation to compensate consumers for the vehicle’s complete diminished value resulting from a collision;

• and the individual’s right to take his vehicle to the body shop of his choice, regardless of who the insurance company recommends.

Three-C has invested significant amounts of resources to educate the public about insurance companies’ responsibility to restore vehicles to pre-accident condition using OEM parts instead of merely paying the average cost of a repair by using generic replacement parts. This ad, entitled "Indemnity," demonstrates Three-C’s philosophy:

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"This is Bob Juniper with Three-C Body Shops. Consider the word ‘indemnity.’ Webster defines it as ‘to provide security against loss, damage or injury.’

It is the cornerstone of insurance. It is what you pay your hard-earned money for. But is it what you’re really getting?

Every day my customers ask me who I think the best and the worst insurance companies are.

They spend a lot of time and money telling you what they’ll do for you … just to get your business.

So, I thought I’d better spend some time and money telling you what they really do for you … during the claim … when you need them most.

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We deal with over 100 insurance companies every year, but only five or six truly indemnify their customers.

Call me at ___________ for a list of these better insurance companies.

My customers tell me they save real premium dollars and have a lot less headaches with the insurers I recommend.

At Three-C Body Shops, we care about you and your car."

On a Mission to Educate
Ever since Three-C’s early ads hit the airwaves and brought business rolling through Three-C’s doors, I’ve made it a personal mission to keep consumers up to speed on what’s happening in the collision repair industry. We built Three-C’s reputation as the advocate for consumers, and customers know they can trust us — so we couldn’t let them down when they came to the shops.

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Three-C’s customer education continues throughout the repair process. We ask our customers to come to the facility where their vehicles were repaired so we can review the work we’ve performed. We explain to consumers that we’ve used OEM parts and why they’re better for their vehicles. And we remind them to have their insurance company pick up the tab.

I’ve found marketing, backed by a technical and sales staff who can explain repair processes and insurance issues to customers, to be the best way to educate consumers. I had to take a risk when I aired my first anti-DRP campaign, but it certainly paid off. Granted, I’ve created some enemies in the industry. But I’ve also been selected as the American Marketing Association’s Marketer of the Year, and I credit Three-C’s approach to marketing as key to the company’s ability to stay competitive through all of the collision repair industry’s problems.

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I told my customers the truth about their rights, and I wound up with a trusting, loyal customer base. What could be more of a reward than that?

Radio Waves

"This is Bob Juniper with Three-C Body Shops. Consider the word ‘indemnity.’ Webster defines it as ‘to provide security against loss, damage or injury.’

It is the cornerstone of insurance. It is what you pay your hard-earned money for. But is it what you’re really getting?

Every day my customers ask me who I think the best and the worst

insurance companies are.

They spend a lot of time and money telling you what they’ll do for you … just to get your business.

So, I thought I’d better spend some time and money telling you what they really do for you … during the claim … when you need them most.

Advertisement

We deal with over 100 insurance companies every year, but only five or six truly indemnify their customers.

Call me at ___________ for a list of these better insurance companies.

My customers tell me they save real premium dollars and have a lot less headaches with the insurers I recommend.

At Three-C Body Shops, we care about you and your car."

Radio Waves

"This is Bob Juniper with Three-C Body Shops. I’ve got my hands on a direct repair shop agreement written by the insurance company. This is what a collision shop must sign in order to be on the list. Hold on to your wallet.

Item one. Minor appearance damage will not be included in the estimate.

In English, this means the shop agrees to overlook some items in the repair process. … You lose.

Item two. The use of non-OEM, original equipment parts, is mandated where applicable.

Translation: the shop is required to use aftermarket or imitation parts. … You lose, again.

Item three. Current discount on parts and labor is ____________ (blank).

This amount is to be filled in by the collision shop. And that means the cheapest priced shop gets the deal, and not the quality-driven shop.

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Strike three. … You’re out!

I’m not making this stuff up! Want a copy of this agreement? I’d be more than happy to fax it you. Call me at _________________.

Three-C Body Shops. We care about you and your car."

Writer Bob Juniper is owner of Three-C Body Shops, Inc., a network with 11 locations throughout central Ohio.

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