Tony Passwater
|
As I am writing this column, the Dow Jones Industrial Average just completed the greatest one-day point decline in history.
In percentage terms it was well short of the drops on "Black Monday" of October 1987 and far below what happened at the start
of the Great Depression – if that's any concession.
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 Tony.Passwater@aeii.net
. For additional information you can also visit http://www.aeii.net/.
