Why did this happen? Congress decided to provide an "emergency rescue" plan for the nation's financial system. Whether you were for or against this plan, I believe something must be done or this could be the first domino in a line we do not want to start falling.
It was interesting that opposition came from both political parties, even though each took shots at blaming the other. The question for us is how these events will affect our future as an industry.
First, the credit crunch should be of great concern. Without credit, most of our economy comes to a screeching halt. If car loans are not available, cars are not sold. If cars are not sold, manufacturers do not continue to produce cars, and jobs are lost. If mortgages are not available, homes are not sold and many related businesses begin to close. More jobs are lost. With fewer people working, fewer will be able to cover their deductibles, if they can continue paying for insurance at all.
On the subject of failing businesses, Wall Street and the collision industry, let's look at a big player on Wall Street and possibly in your shop – AIG. A few months back in an earlier column, I commented on the 2007 JD Power survey that prompted Progressive Insurance Company to change its direction and even amend policy (I felt Progressive was focusing too much on garnering new customers instead of taking care of their current ones). Within the last few weeks, the 2008 JD Power survey results have been released and show Progressive Insurance Company improving in consumer satisfaction but with room for improvement.
In the 2007 survey, AIG's insurance business was named the top insurer by customers for repairing their vehicles correctly the "first time." In the 2008 survey, it was rated the lowest in overall customer satisfaction and as a result the lowest for customer loyalty (those customers who want to "definitely renew their policy"). Recently, AIG suffered a serious Wall Street setback. The parent company needed a bailout loan for survival (see page 10, this issue).
Do you think it might be more than a coincidence that a parent company whose auto insurance business customers don't believe it addresses an issue as basic as customer satisfaction might have serious problems elsewhere?
There's a lesson in all this for shops and insurers alike. In this slumping economy, it's more important than ever for businesses to focus on customer satisfaction. Shops can renew their efforts by beginning again to educate customers and become the the customers' repair "expert" in their time of need, not the insurer. In your market, try to establish a standard by which customers contact you first, not the insurer (vehicle manufacturers have been doing this for years with electronic systems such as OnStar and with certification programs). Doing so involves planning and practice since many estimators and front office staff have become "order takers" and "claims processors" rather than the "salespeople" you need them to be.
Following this, I'd recommend that insurers recognize how integral their customers' experience is with the shop to their level of satisfaction with the insurer. The two need to work together to provide customers with the best possible service experience. That should be obvious.
Insurers also can reap the rewards of forming better relationships with shops by garnering the best kind of advertising available – word of mouth. Over the years, I've asked for advice from service providers such as doctors, dentists and mechanical shop owners. Word-of-mouth recommendations are effective since they're genuine. They don't smack of getting advice from a salesperson attempting to upsell someone. What better referral for an insurer could there be than a collision repair facility giving their name when a customer asks, "Who would you recommend?" or "Whom do you have your insurance with?"
We have underestimated our ability to battle the huge marketing and advertising budgets in place by insurers to encourage the switch to their company. Even the latest "accident forgiveness" or "unlimited car rental" ads can easily be dispelled by the "expert" the customer can trust – you.
One thing for sure is that with the direction our economy has been going and trends for collision repair claims declining, it is time to stand up and begin thinking how to take back control of the business, rather than silently complaining how things are or are becoming. Without action, nothing will change, and without change, many businesses in our industry will remain in jeopardy.
Please send your comments, questions and potential discussion topics you would like to see addressed in future columns to [email protected]. For additional information you can also visit www.aeii.net.
