I know we all like to think of ourselves as unique, and to some degree we are. Overall though, we are much more similar than we are different.

 

I see some members of our industry on the repair side blame the insurance companies for problems of profitability. I see the insurance company reps unfairly accuse owners of “laughing all the way to the bank.” The truth is neither is reality. Insurance companies are under pressure to perform financially for their owners, so they will look for ways to contain costs. Business owners, by way of statistical proof, hold a 1 in 10 chance of making it big in business. In other words they take great risk in starting a repair facility.

 

So if you look at the above from a “What’s fair?” perspective repairers should be constantly looking for ways to strip costs out of the process to accommodate a holding of the line on costs for insurers. On the other side of that coin, there is no room for resentment of successful shops that invest, reinvest and work extremely hard for many years to climb into that category.

 

It is fair to expect a return on investment on both sides of the coin. So suppliers (repairers) should be working on ways to reduce their costs so they can hold the line on pricing. That’s better negotiating and buying-power through a variety of strategies. If you can have the lowest cost-factor, you can use that cost-leader to solidify relationships to keep customers (insurance or private) coming to your door. Customers (insurance or private) have to respect the history of the business and the investment that goes into building it to the current state of success and their right to make a profit on that investment.

 

I am not talking about the outliers who are skirting the law (not paying all taxes, hiring illegal workers, non-compliance on health and safety, etc.) to contain costs, but those that have examined and continue to examine the way they do business, continue to educate themselves and their staff to take a leading role in legitimate ways.

 

In the long run everyone wins if the honest shops that work hard and reinvest are the ones that are supported. The short-term, myopic insurance company rep will look only at the costs and assume they win. In the long-run, when their customers abandon them for other companies that can offer better services in similar products, they will spend more money on marketing to attract the replacement customers. I think that is the immediate opportunity for all the stakeholders in the industry to work together. The suppliers and shops need to work on stripping out costs. Insurance reps have to participate in streamlining processes to reduce costs and allow for profits that leave funds for reinvestment.

 

I think there are some really smart insurance reps out there (you know who you are) because a conversation I had recently was all about rewarding shops for superior service levels with paid credits for education programs. What a spectacular way to create an upward spiral! These are tomorrow’s leaders as they are demonstrating respect. They are who’s driving.