In reviewing some our shop's numbers recently, I saw that a full 30 percent of our jobs are privately paid by customers rather
than insurers. A lot of that, I think, is fueled by higher deductibles and people's fear of higher premiums that could result
from actually using the insurance for which they've paid.
There's certainly some pros and cons to customer-pay work. There's far less administrative work, and it's great to not have,
for example, an insurer pushing us "to just try" some parts we know are only going to slow down the process. You can charge
appropriately without hearing a "You're the only one . . . " or "We don't pay for that." The jobs tend to be smaller but are
often the type that can breeze through the shop the most efficiently.
On the downside, some customers are looking to scrimp and save every way they can. There's always that concern that even if
they are satisfied with a "budget job," someone else looking at the car and asking where it was repaired might not know that
customer didn't ask for or expect a top-quality repair. And while insurance company checks generally don't bounce, we've occasionally
had a little more trouble collecting from a private party.
But a few minor issues aside, we like having customer-pay work account for such a significant portion of our business. Here
are some of the things we've done to try to capture more of this work:
- SELL, SELL, SELL. If you've ever hired an estimator whose experience was at a business that did primarily insurance direct repair work, you
may have found they're good at "processing orders" but not as good at "selling the job." Capturing customer-pay work requires
being able to read and relate to people, being able to explain why our shop is the place to have the work done, being able
to ask for the job. It's a very different trait than what's required to just write a good estimate, and it can be hard to
find those who are good at both things. If you have someone doing both well in your front office – and you've given them some
selling tools like testimonials, photos and props, and customer service indexing reports, chances are you're capturing customer-pay
worth that other shops are not. Consider hiring someone with these traits and skills or train one of your employees to help
capture this work.
- BE THOROUGH IN THE PROCESS. Though customer-pay work may not require all the photographs and paperwork insurance-paid work does, it can be labor-intensive
in other ways. You need to be able to write a thorough damage assessment. Customers aren't thrilled if you end up having to
call them for a "supplement." You'll need to spend some extra time explaining everything to them so they are comfortable with
the process.
- OFFER SOME PAYMENT OPTIONS. Like a number of shops, we stopped offering the 90-days-same-as-cash option as the fees charged by the financing institutions
increased, though I know some shops still find it a worthwhile option. But accepting credit and debit cards is almost a must
if you seriously want to attract customer-pay work.
- EXPLAIN CUSTOMER-PAY WORK AS AN OPTION. Some customers may not think about paying for a job themselves when it's not significantly more than their deductible. We
walk people through the options to help them consider which route actually makes better sense for them financially.
Before looking to capture more customer-pay work, I'd first suggest measuring how much you're doing now (as a percentage of
your overall sales) and how profitable it is compared to other work. If the numbers look promising, implementing the steps
above should help you add more of it to your mix.
