The Return Re-evaluation
If you are like most shops in the industry, you’ve probably taken a closer look at your financials this year. 2020 has certainly presented some big challenges for our industry, but it has also presented us with some great opportunities and learning experiences. I’ve written about how important it is to review financials before so I won’t dive too deep into that here.
However, it’s always worth reminding ourselves that looking at financials almost always pays dividends. Our income statements and balance sheets are our report cards. If someone gets all As and Bs in school, but a D in math, then the teachers and parents know the child needs to put a little more concentration and effort into improving his or her math skills. It’s the same with us: Our financial statements will tell us where we are doing well and where we need some extra attention.
One thing I’ve noticed more recently, which I’m sure most of you have as well, is how much the account for software subscriptions has risen. For instance, we used to own our management system, so we only had to pay a small monthly tech support fee. Now, we lease our management system and pay a hefty monthly fee to do so.
Seeing that software expense increase in our financials has given me time to pause and evaluate the products we are leasing. I have to say, when I started this project, I was certain I would be making cuts.
Whether it’s changing consumer habits, DRP requirements, or evolving to create contactless interactions with customers, it’s likely you’ve looked into software to connect with customers in a new way. We use Podium here at our shop. This was the first product I thought would be on our firing line. We looked into one of their competitors, Bodyshop Booster, and compared the costs and benefits. We have used both products at different periods of our company.
After I started analyzing how many customers we’ve been able to capture using these types of products, I realized it was an investment, and not an expense. With that realization, I was happy to continue paying for the software.
The next software I reviewed was our paint calculator. I didn’t spend much time on this as it’s a shining star amongst our software products. We’ve used two of the main calculators over the past several years and they are a no-brainer. The ROI is almost immediate. If you haven’t used a paint calculator before, you are missing out. An appraiser once mentioned to us, “I don’t know why every shop isn’t using these; I never get questioned on paying for materials as long as I have an invoice to show my boss.” Bottom line, if you aren’t using a paint calculator, please get one today.
There is another product we use that I also thought might be vulnerable to being cut from our expenses. We use a product called Parrot Photo Update to manage all our pictures of the repair. The reason I thought we might cut this product is that our management system already has a solution to manage our photos. However, the storage is extremely limited (I’m sure you can relate). Not only that, but our management system shrinks down the size of the photo taken so we lose picture quality as well. Parrot has unlimited storage and the quality of the pictures are exceptional.
And, the best thing is we use that software on locked devices that only have access to Parrot and CCC, so the techs have one device for viewing the work order and taking pictures. A huge advantage is that devices don’t have the ability to text or use the internet. I was reading an article in FenderBender yesterday about how to cut down on technicians using their phones for personal use. The Parrot devices have helped us significantly reduce the amount of time that techs spend on phones. After I evaluated how important pictures are to us getting paid, I realized Parrot has been a valuable investment for our company.
We just started using another software product, called the BillableGenie, from National AutoBody Research. While I don’t have enough data to report on it yet, the early returns have been fantastic.
After spending time reviewing our financials, I gained a better understanding of our ballooning software expenses. It was a number that jumped out to me in the beginning, but after digging deeper, it made me realize it is one of the areas we get the biggest bang for our buck. When times are tough, it’s smart to look where expenses could be cut, but without evaluating the return on those expenses, it would be easy to make the wrong cuts.