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Selling 'Customer Pay' Collision RepairPosted 4/12/2011
It's worth your time; it pays!
Recently, while visiting a very good collision repair shop, I witnessed an interaction between a shop estimator and a potential customer. The estimator generated an accurate estimate, handed it to the customer and asked to schedule the repair. Good job! Then the customer explained that she had to decide if she was going to turn it in to her insurer or if she would simply pay for it herself. The estimator gave her his business card, saying, "Let me know what you decide." When the customer left, estimate in hand, the estimator lamented how much time he "wastes" on customer-pay estimates. Customer pay is not a waste. In fact, some would argue customer pay is the only growth segment of the collision repair industry. Based on many studies, roughly 30 percent of collision repair orders and 20 percent of collision revenue is now generated by direct customer pay. Why? Many vehicle owners now carry higher deductibles and simply do not want to turn in a claim due to the possibility of an increased premium. With the tight economy, many have dropped collision and comprehensive coverage. The average age of vehicles has grown to new highs. Who carries collision and comprehensive on a 10-year-old Camry? Older cars sometimes get hit too, though, and collision repair shops have the opportunity to sell repairs to these customers who will be paying themselves. Avoid "DRP Complacency" Many collision repairers have become so used to dealing with the processing of a direct repair program (DRP) claim that when faced with something that does not fit into our DRP system, we push it off as too much trouble. In today's business climate, we simply cannot allow any work to drive away. Key to Customer Pay All collision repair customers have three basic needs: trust, empathy and direction. Dealing with a collision repair center is not a regular event - it happens once, maybe, in 7 to 10 years. When assisted with the collision repair by an insurance adjuster, a customer is guided through the process by the adjuster who is a professional collision repair purchasing agent. For a collision repair customer, the decision to use their insurance or go it alone is a tough one. If there is no insurance coverage, the customer still has a choice: deal with a collision repair shop alone or simply not repair the vehicle at all. The key to selling customer pay is to deliver trust and empathy with an even bigger dose of direction to assist the customer to make a good decision about repairing their damaged vehicle. With customer pay, the "estimator" should become a consultant type of salesperson working with the prospective customer, exploring multiple repair options, offering solutions and guiding the customer toward a good repair decision. The Sales Process Selling customer pay begins with the initial phone call. Anyone answering the phone should have basic phone skill training, listen to the customer and guide the customer to an estimate appointment. When the customer walks through the door, the consultant type of selling process begins with a good customer qualification. Use a customer information form, and fill it out with customers. Be sure to ask many questions and truly listen to their response. Ask about the accident like you've never heard the story before. Many customers with damage in the $1,250 range are making a decision about whether to file a claim or pay for the repair themselves. The salesperson will take the time to discuss the issue with the potential customer. The possible increase in insurance cost resulting from turning in the claim may exceed the cost of repair alone. In many cases, it is more cost effective for the customer to pay for repairs themselves rather than pay their deductible and their insurance policy's increased premium over three years. Many customers leave shops every day without having discussed this important question. Provide Options
Many find the use of "props" helpful in assisting the customer to make decisions about a repair. A prop is something used to illustrate process or technique. I have seen shops use a refinished hood, with chips feathered and primed on one side, not on the other. The prop allows the customer to clearly see what "feather and prime chips" look like as opposed to simply leaving chips in a blend panel. Provide many options, get the customer involved and let the customer make decisions. Generate the Estimate Many shops today are "selling without an estimate" and moving toward blueprinting repairs to reduce cycle time. With the customer-pay repair, the estimate is generally required and it better be accurate. Adjusters are used to shops calling with supplemental damages. Customers view the call for a supplement as a violation of trust. Collision repair estimators must be very careful with the generation and presentation of a customer-pay estimate. If items or operations that would generally be done on an insurance quality repair have been deleted for the customer pay, identify those items. If quality compromises have been made, such as masking handles or leaving chips and dents in a blend panel, identify that and note a one-year warranty clearly on the estimate. That estimate may wind up on an adjuster's desk and you want to differentiate the customer-pay estimate from an insurance-quality estimate. In some states, such as California, such clarifications may be required to remain "legal." Close the Sale! Present your solutions, and their benefits, to the customer. Explain the value provided by your solutions. Some present multiple estimates reflecting different repair options, letting the customer decide which option and price they desire. Example: "Mr. Smith, I have produced two estimates for the repair of your 2006 Accord. Option 1 reflects the use of an aftermarket fender, blending the driver's door while simply masking the handle and trim. The benefit of option 1 is the low price; however, this option carries only a one-year warranty. Option 2 reflects an OEM fender and we'll remove and install the handle and trim on the door. That carries a lifetime warranty. "We've discussed your concerns about the repair, and I understand your desire not to run this through insurance. You told me earlier that you plan on keeping the Accord for another four years and that repair quality is very important to you. Mr. Smith, it's your call, but from what you've told me, I think Option 2 is the better option for you. May I schedule you for Monday, or would Tuesday be better?" In the above example, the estimator referred back to key customer concerns when presenting solutions and made the appropriate suggestion to the customer as a consultant. He also completed his presentation with a "close," a statement asking for commitment from the customer. If the customer hesitated, the estimator would ask for clarification of customer concerns and possibly offered additional value: "Mr. Smith, I know that $1,250 is a lot of money. As we've discussed, at that figure, you're probably better off paying for this yourself rather than going through your insurance company. You plan to keep the car, so we've agreed that Option 2 is your best choice. Is there something I've failed to address? Can I provide more information to help you make the best decision?" Frequently, offering additional value will close the sale. "Mr. Smith, I understand your concern about the cost of repairing your Accord. Option 2 does provide the quality repair you've said is important and that is a $1,250 repair. I noticed that your Accord is due for an oil change. If you're comfortable leaving your Accord with us today, I will have that oil change done, while we have the car, at no charge. May I offer you a ride home?" By the way, this same sales technique works on conventional collision repair as well as customer pay! Taking the time to build rapport with a customer, qualify the customer to identify their needs, providing appropriate options as a consultant, and asking for the sale in a professional manner will increase customer pay repairs in virtually all collision repair centers. Handled properly, these customers will become customers for life, referring family and friends to your collision repair facility.
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Once the potential customer has been qualified and their needs determined, the estimator should inspect the vehicle with the customer. Don't start out grabbing a pad and "writing a sheet." Take your time to inspect the entire vehicle. Ask the customer questions about the repair. What is necessary? What is important? What is not? If the customer has identified cost as their primary concern, look for ways to provide a safe and economical repair. 