We the unwilling have been doing the impossible for the ungrateful. We have been doing so much for so long, we are now qualified to do anything with nothing! ~Anon~

Perhaps civility, professionalism and decorum is unreasonable in today’s world. I would like to think otherwise. Some people have more brass than most, but a kind word and remembering that others have feeling too can go a long way in creating consensus and building a team or coalition where and when we need it. I may be wrong, but I am betting most that continually complain would like to see more accomplished to the positive than just gritching. If that is the case, we all must use some tact to attract others we will need in this fight. Did we not learn anything by the missteps of unilateralism?

Even after 30 years of evolution, the only thing that has changed in the game of insurer bribes and body shop payoffs is apparently the price tag! One might think that with the invention of the DRP, all of the technology reporting, and the monitoring and measurement of key performance Indicators (KPIs), the good ole boy network would have been replaced with a legitimate system whereby shop earned their way onto a referral list.  However, it would appear that the only thing that has really changed from past decades of a few unethical shop owners “greasing” some insurance guy is the price they have to pay for the referral work today!

Just 18 days following the termination of Gil Palmer from the Auto Club, allegations of accepting bribes and abusing shops have surfaced around two more upper management insurance representatives in charge of direct repair programs.  The two have allegedly accepted bribes that include a large screen TV purchased by a body shop and loaded into her car, and the other for abusing shops and possibly accepting a 5-carat diamond ring and a lavish automobile!  These allegations are separate from any actions by Palmer, but they involve some of the same cast of characters. 

Market Like an Insurer

Progressive’s Concierge program is the boldest action ever taken by an insurer to mitigate the role a shop plays with the consumer. But what might the possibilities be if repairers employed some of these same strategies?

THE TERM “CONCIERGE” ORIGINALLY CAME FROM THE TITLE GIVEN

to the person in a castle who held all the keys to the rooms. This person was called the “keeper of the keys” — or “concierge” in French. Today, the term has taken on all kinds of different connotations,

The efforts of hundreds of volunteers for thousands of hours over 16 years now is claimed as “intellectual property” and owned by a private entity.  What was once considered to be the collective property of the collision industry at large is now only available for a fee and you have to join their club to participate!  The Electronic Standards of the collision industry are now claimed as the property of CIECA, and they are called CIECA Standards, not ours!  A dangerous presidence is at stake if nothing else!

Assured Performance Network announced the official introduction of its separate, non-profit consumer advocate organization called Assured Performance Collision Care.  The consumer advocate organization serves as a qualifying and certifying entity that provides an objective listing of qualified collision repair businesses specifically for consumers.  The service allows vehicle owners to select a collision repair facility from a list of businesses that have been objectively pre-qualified by the Collision Care service.  This service represents the first time a distinction has been made between body shops based upon objective standards without a participation fee, requiring concessions, or purchasing a product.
 
In concert with the qualifying collision businesses, the consumer advocacy organization offers consumers an exclusive type of VIP service.  Now, over 5,000 independently owned shops can offer a better class of service than any direct referral programs or dispatch center, and it could be an enhancement to any.  Using the tools, word track and special “qualified” or “certified” status awarded them through the program, shops can offer “peace of mind,” convenience, and VIP - white glove treatment! 
 
Once the collision business meets the qualifications, they can use an assortment of tools packaged as the Assured Performance Collision Care VIP program.  The collection enables the individual business to promote themselves, and the entire national network to offer “VIP white glove” services to consumers with “a light in every community.”  According to Assured Performance, they are uniquely positioned to deliver a consumer experience even more appealing than a Concierge-like program.  The “Collision Care VIP” program is a turnkey, comprehensive package including PR, promotions, marketing, advertising, word track, VIP cards, retention program, sales and even marketing to agents, dealers and insurers!  It comes complete with training tutorials, brochures, direct mail pieces, commercials, consumer awareness video, displays, posters, VIP cards, video profile, and more.
 
The group’s founder and CEO, Scott Biggs, said, “We built this network so that top shops can compete at the next level.  What this network now offers far surpasses any other group, even insurance company direct repair programs, in quality and scope of service (CARE), convenience of location, full service offering, expertise, key performance, and overall qualifications.  Frankly, these shops represent what everyone needs and wants!”
 
Shops cannot buy their way into this program.  They must be objectively qualified by meeting the Assured Performance criteria and standards.  Their network of shops includes over 5,000 repair businesses demographically located within 10 - 20 minutes or less driving distance of 95 percent of the entire U.S. population.  The complete national coverage has been built by objectively identifying shops based upon their business qualifications and performance, rather than on product brand purchase, price concessions, or the simple willingness to pay a participation fee.  Assured Performance said that each week hundreds of shops are still being surveyed, evaluated, and analyzed to be included or excluded from its consumer-focused referral network.Biggs explained that to be chosen as part of the network, shops must have a top credit rating, all of the required tools, training, licenses, permits, and at least 5 years or more in business as well as meet or exceed standards far more stringent than those defined by the Collision Industry Conference (CIC) Class A shop definition.

No consumer on record has ever woke up on a beautiful Saturday morning, looked over at their spouse and said, “Honey, lets go shopping body shops and maybe get some collision repair today!”    It has never happened and it never will because no one ever wants a Collision repair  …they may need it, but they never want or desire it.  Therefore, for body shop all over the world, they are selling something no one ever wants to buy.  That is not exactly a strong sales and marketing position!  In fact it is the foundation of what makes retail marketing so difficult for collision repair businesses.  

At best, a body shop markets according to top of mind awareness – hoping to be the choice when a consumer finally has a NEED for what they sell  -like a dentist waiting for tooth decay or a doctor waiting for cancer or a heart attach to strike.  Without an alternative, body shops are left to the challenge of waiting and hoping for a storm or just fighting for the work that might magically or tragically appear. The marketing and advertising plan and execution must be repetitive, staged, and deliver the right message.  To accomplish this, can be costly if not executed right and so most shop owners skip it entirely and rely upon other forms of gaining volume. What is worse is when the customer finally comes to the shop.  Now each customer is taken through a long sales process where little selling is done but an overwhelming amount of service is offered if necessary.  In a reactive mode, shops offer a wide variety of this or that – some required by the insurance community and others are part of the shop’s service offering …often carefully hidden or poorly marketed. Shops offer the services, employ the staff, invest in their shops, staff and curb appeal, but the one element that remains unchanged is the product they sell!  But, insurers have taken a similar challenge and made it their competitive advantage - a concept and marketing tactic that shops could learn and employ themselves!

I wonder if the repeal of the McCarran-Ferguson Act would really fix much at all.  Both sides of the trading relationship are at fault and no one seems willing to change the current system - but most would like to at least tilt it to their favor! 
 
“The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings.” W.Shakespeare, From Julius Caesar
 
50 different states, or 1 federal government as a target for reform still requires a coherent plan of action and someone to do something.  Pooling resources amongst body shops?!  You can’t even get everyone to agree to pay the lunch tab collectively!  And, just who do we all trust to hold the money?!  And, who do we think will spend it wisely?  
 
The current system is obviously outside the lines by any number of interpretations of the existing laws, yet not one action has been filed in court as a class action effort.  There are a few individual efforts we hear little about and few expose themselves to tell the story.  Many turn a blind eye to the outrageous actions going on all day every day as long as they are benefiting from the current system, or perhaps it is that they are attempting to stay below the radar for fear of reprisal.  Just question one sacred oxen in this industry and see how the self-anointed royalty of this industry reacts … They will treat you like a leper, keep you off the stage, stab you in the back in the hallways and private meetings!  Your issues will be ignored, they will huff and puff at you in the back rows and they will conspire to keep you quiet … if you let them!
 
Just consider these ethically challenging paradoxes:  Would ASA say anything if the top three insures made ASA membership mandatory for all shops?  Would a shop be foolish enough and willing to potentially destroy their business just to say no to another insurer demand?  Would any of you put your name on a class action lawsuit to stop the egregious tactics we all know exist?  Would a mid-level manager at an insurance company jeopardize his or her career by standing up to the company policies and saying stop?
 
Perhaps I am naive in thinking the answer may be easier than we might think.  What if we started by defining the rules and then playing by them?  Consider these as examples:  Why not set repair standards that we can all agree to, then pay and repair accordingly?  What if insurers and repairers stopped negotiating one line at a time and agreed to a bottom line cost based upon “experienced historical costs” according to the repair standards and the practices to repair to those standards (categorized capitation)? 
 
With these two significant steps, we would get repairers and insurers back in their respective roles and out of business practices that are probably illegal and certainly unethical.  We would have a “trust but verify” foundation so the fox isn’t guarding the hen house and the cost have no limits.  This would allow for insurers and repairers to gain far greater efficiencies throughout their respective businesses in areas such as cost containment, reducing the complexity of estimating, reducing cash flow issues with reserves, lowering staffing costs, friction costs, and so much more! 
 
Yes, repeal the MFA by all means.  Its usefulness has long since passed if it was ever useful to begin with.  Regardless, don’t expect that the repeal will fix all our ills, nor happen any time soon.  On the other hand, perhaps we can explore improved methods and business practices that have an economic upside for all.  If anyone needs the motivation beyond the economics, perhaps the fear of class action lawsuits in any number of consumer friendly states will be enough!  But the suits will not just show that one side is guilty!  Yes, the fault, dear Brutus, is but in ourselves!
 
 

You are being hoodwinked, bamboozled or you’re just plain ignorant (defined as ignoring the facts).  So which is it? You may think you aren’t, but you are!  You think you are buying wholesale but you are really buying retail and your profits reflect that fact.  Like most shop owners, you will think that you are buying at a great deal.  Perhaps you are getting a 20 or even 35% discount off the manufactures list price on your paint or even parts, but that is not wholesale. It is no more buying at wholesale than those that smartly buy at the mall the day after Christmas.  Every store will have huge signs saying 30% off or even 50% off.  Those are called Sales … not wholesales! Worse, they only happen occasionally and on excess inventory.

Everything you consume and everything you add onto or use in the repair process you are buying at retail prices!  Even the wording used by suppliers supports this.  When sharing this revelation with repair business owners most retort that they are getting a big discount from their paint vendor or supplier.  They have been lulled into thinking that a discount somehow constitutes something other than buying retail.
So lets admit it, today, shops are getting a sales discount off retail list price.  You are not buying wholesale!  Jobbers aren’t necessarily buying at wholesale either.  Only “wholesalers or warehouses are buying at wholesale.” 

If you go to the mall on the day after Christmas and see signs everywhere offering 20 – 60% off, you might believe you are getting a good discount and buying on special, but no one with half a brain would believe they are buying wholesale.  Even the wording used by paint manufactures tells you that you are buying at retail when they state that you are getting 15, 25 or even 35% off list price.  LIST PRICE IS RETAIL! 

In light of the collapse of M2 Collision in the spring of 2005, where 27 shops in California closed their doors over a weekend, questions have risen about the economic viability of other consolidators and body shops in general.  Unfortunately, the M2 story is not isolated.  Literally thousands of shops closed in this last year, and several thousand more, including other consolidators, are on the verge of a financial restructuring or worse.

Based upon several years of uncontrollable dumping, unfair competitive practices and illegal steering, the collision repair industry is now in an economic crisis.  Unlike past complaints by independent repairers, this financial crisis is not just a reflection of a maturing market or an evolving industry.  Some suggest the implosion of the collision repair market and the pending demise of thousands of shops across the U.S. is business Darwinian theory at work.  They theorize that the fact that thousands of collision businesses are closing their doors due to an inability to earn a living is the natural order of survival of the fittest.  However, upon closer examination, one may find that the business practices of a few converging entities have created an economic reality that will no longer support the operation of a collision business that complies to all of the required standards.  Worse yet, many of the obstacles to profitability are creating an environment that will not even support repairs performed to pre-accident condition.

Industry experts point to the obvious fact that there is an oversupply of repair outlets for the amount of work available as the root cause of the current crisis.  Many even welcome the pending implosion of the industry and the collapse of thousands of collision repair businesses.  But, before a hasty conclusion is drawn, we must examine if in fact it is the survival of the fittest or it is selectively afflicting other segments of the market.  Upon closer examination, it is not the ugly, backyard body shops that are not complying with the industry standards and failing.  The hardship is borne foremost by those that do – the independently owned and professional operated collision repair businesses that provide repairs according to pre-accident standards.  The facts are hard to find and the cause and effect is a shocking essay of lying, cheating, stealing and deception on a massive scale!