Ask BSB
4/1/2008
Dear BSB:
I’ve owned and operated a very successful and well-known auto repair
and auto body repair shop in southeastern Wisconsin for 22 years.
Within the last year, my body shop sales have dropped dramatically due
to steering and, in our case, Progressive pulling cars from our shop.
For 18 years, I had three full-time I-CAR/ASE bodymen working for me
who were very busy, and now we're barely surviving with one bodyman.
In your article on steering
[“Power Steering,” February, pg. 44], three
strategies that non-DRP shops could use to counter steering were
proposed: 1) Fall in line with the majority of shops that see the
insurer as their primary customer and serving the consumer
exceptionally well as the best way to satisfy the insurer; 2) Become a
specialty shop that handles high-end cars; or 3) Choose a thinly
populated location.
My problem with these three strategies is: 1) none of the insurers in
our area have openings for us to become a DRP (which I’m not too
interested in anyway); 2) I’ve been trying to contact dealerships in
the area (without much luck); and 3) I certainly can’t change my
location.
I’m becoming very stressed trying to keep my shop afloat. Any suggestions? Signed: Stymied by Steering
Dear “Stymied by Steering”:
Please take what I’m about to tell you very seriously. You need to
declare war on steering. It sounds to me like it’s more than just
Progressive stealing work from you. The big question is, why did you
wait so long – down from three techs to just one – before you addressed
the problem?
When I tell you to declare war, I mean it almost literally. And you
have to think guerrilla warfare tactics. First, understand that if
Wisconsin has an anti-steering law, the insurance companies are most
certainly violating it. You can’t depend on your department of
insurance (DOI) to help you. You’ll have to go elsewhere for
reinforcements. Here’s your plan of attack:
1.
Begin a customer education campaign. It will cost money.
Unfortunately, you may have waited too long to take action. But
hopefully you have some money socked away.
Start educational advertising, whether it be radio, television,
billboards or a combination of all of them. Explain to consumers why
they should contact you before they contact their insurance companies.
Explain the pitfalls of being steered to a DRP or concierge shop. Offer
free post-repair inspections to anyone who has been steered to a DRP
shop.
Putting up a billboard somewhere with a short message as a warning with
your shop’s name and phone number may be the most economical and
effective method. Whatever you choose, it’s important that people
either read or hear your message constantly. Beware, though, it could
be expensive.
Also, come up with a word track to sell your shop to every potential
customer. Try to talk with a customer before the insurer does, and
explain what to expect when he or she does contact the insurer. Your
predictions will impress that customer and win his or her trust. If you
talk with a customer after he or she has been steered, carefully
explain the disadvantages of taking his or her vehicle to a DRP shop.
Again, develop a word track and practice it. If you do lose the job, be
sure to offer a free re-inspection afterward.
2.
Start submitting complaints to your department of insurance and,
more importantly, your attorney general. Complaining to the DOI will
seem like a waste of time, but it’s important to create a record and
paper trail. In fact, you can use the DOI’s lack of action to your
advantage like we did here in Connecticut. Our attorney general was so
disgusted with our DOI’s refusal to police the insurance industry that
he publicly denounced the department and called for the DOI
commissioner to be elected instead of appointed by the governor.
3.
Join forces with other independent shops in your state. Other shops
are being steered against and are suffering the same economic problems
you are. Get to know other shop owners in the same situation. Maybe you
can share advertising expenses with more than one shop and make that
advertising more of an anti-steering message that benefits all the
independent shops in Wisconsin. If your state has an association, see
if you can get involved. Many states’ associations are ineffective and
need new leadership. You could run for president and focus the
association’s energies on fighting insurer abuse.
4.
Meet with local attorneys and find a few that are willing to learn
the industry’s unique problems and the methods to combat them. Don’t be
afraid to consult with other states’ associations to get names of
attorneys competent in dealing with body shop issues. Attorneys working
for the Auto Body Association of Connecticut share information with
other attorneys.
And attorneys general from across the country seek out our attorney
general, Richard Blumenthal, and ask advice on how to deal with these
issues. Blumenthal has shown an eagerness to work with other states.
5.
Befriend your attorney general and as many legislators as possible. Educate them as well as your customers.
6.
Seek out examples of hack jobs performed by DRP shops. In
Connecticut, we’ve gotten a lot of good press by having independent
shops look for hacked repairs and show the vehicle owners how their
safety was compromised. When these shoddy repairs are revealed, we
notify the attorney general and the media. Legislators are all aware of
the problem, and several are working on more effective anti-steering
legislation.
7.
Make steering painful for those involved. There are several major
lawsuits going on across the country right now that give insurers much
unwanted bad press. While suing insurers may seem like your only
avenue, consider suing the DRP shops that are conspiring with the
insurers to steal your work and the food off your table. I’ve been
recommending this for years (I don’t own a shop, otherwise I would have
done it long ago), but I’m not aware of any shop owner who has tried
it. But think about the psychological effect a multimillion dollar
lawsuit would have on a body shop. Since all DRP contracts hold the
insurer harmless, the shop can’t expect any help from its partner in
crime. If body shops fear being sued by other body shops, they’re less
likely to sign on to these DRP programs. It may sound like an extreme
action, but like I said, this is war.
You have a choice. You can die a slow but sure death, or you can fight
to survive. The battle will get ugly, but unless you allow yourself to
be enslaved by the insurance industry, you only have three options:
fight, quit or die a slow painful death. Only one choice gives you the
opportunity to save your business and self-respect.
– John
Shortell is president of BodyShop Solutions in Mansfield, Conn., and
has been in the collision industry for more than 20 years.