Making Connections with Insurers
Last year, Jim Guthrie’s sales increased by more than a million dollars. The owner of Car Crafters in Albuquerque, N.M.—whose shop spans 50,000 square feet over 4.5 acres and bustles with 45 busy employees—saw his revenue hit $8 million at the close of 2008. Guthrie credits his success to a decision he made when he opened his doors 27 years ago: to successfully pitch his shop to insurance companies. Without that focus, he says, “I wouldn’t be what I am today.”
Relying on strong relationships with insurers and establishing direct repair programs (DRPs) has helped business to soar at Car Crafters. Guthrie says the combination of a great-looking shop with the right equipment, a solid management system and a great set of people skills have helped him establish rapport with insurance companies. Now, he expects his business to just keep getting better.
Jason Bertellotti, vice president of repair solutions at Mitchell International Inc., has seen many of his customers establish great relationships with insurers. If a shop owner or manager wants to work with DRPs, he says, learning how to pitch your shop to insurers is essential. “Insurance companies are focusing their efforts into fewer and fewer vendors,” he says. “It’s very important that a shop ensures that they have the insurance pipeline necessary to grow their business.”
Guthrie, who has eight DRP agreements and is working to secure three more, realized that building relationships with local insurance agents meant more jobs coming in the door. “If I don’t like Bob from ABC insurance company, I’m not going to get any work from Bob,” he says. Developing friendships with local agents not only helped Guthrie get his DRP agreements, but also alleviated the tension that oftentimes exists between shops and insurance companies. “Instead of ‘us against them,’ it’s ‘how can we fix this car?’” he says. That sense of teamwork and collaboration has translated into big business for Guthrie, who says nearly all his work is now insurance related.
STRATEGIES THAT WORK
Three critical strategies have helped Guthrie win and successfully develop his DRP relationships.
Make a great first impression. Before Guthrie began speaking with local insurers, he knew it was critical to show that his shop was modern and comfortable for customers. He designed his waiting room with a fireplace, flat screen TV, coffee bar and bistro table. “We went all out,” he says of the area’s large glass windows facing an expansive view of the mountains. “First impressions are first impressions.”
Beyond the style, the substance better be there, too. Bertellotti says insurance companies are also concerned with how well-equipped your shop is. “They’re looking at your equipment—is it well kept? Are the employees trained? Do your computers look somewhat cutting edge? Is the shop noisy and chaotic? They’re looking for shops that look like they have it together.” Because the consumer sees the body shop as an extension of the insurance company, he says, they won’t want to send business to a repair center that isn’t up to par.
Run with a strong management system. Harnessing your shop’s data and maximizing the use of a management system is critical for impressing potential DRP partners. Bertellotti says that 75 percent of shops don’t have one—but should. A management system allows you to view operational reports, and that’s important information insurers will want to discuss with you.
“They want to understand your cycle time and efficiency,” he explains, “and they don’t want to see just one kind. They want to see how long it takes for nondriveables, driveables and the average type of hit in your shop. The message shops should be communicating is, ‘This is the type of business I get, and this is the amount of work I can take from you and get it done quickly.’”
Shops that have a strong sense of what their numbers mean will also wow an insurer. “Where they become the most impressed is when they sit down to go over their metrics and the shop knows more about those metrics than the insurer does. If they can see you have a true handle on it, they’ll be impressed,” Bertellotti says.
Guthrie, who uses Mitchell’s ABS Enterprise system, says it has been an invaluable tool when presenting his data to insurance companies. A big benefit is that it allows him to pull current information when showing them his shop’s key performance metrics. “You need real time information right now,” he says. Relying on old-fashioned Excel spreadsheets won’t do the trick—and won’t help your pitch to insurers. “That data is old,” Guthrie says. “It’s too late. Don’t you want to make the score instead of just keep the score?”
The use of real-time data also enabled Guthrie to prove to insurance companies that his shop was among the best in his market. “To have a competitive advantage in your market, you have to do it better, faster, cheaper. Don’t tell them what you can do, show them. They want to see first.” Presenting insurers with up-to-the-minute data reports allowed him to do just that.
—Jim Guthrie, owner, Car Crafters
Develop good people skills. No matter how great your shop is, if you don’t have solid people skills, insurers won’t want to work with you. “It comes down to relationships,” Guthrie says. “You may have the best body shop in the world and the best cycle time in the world, but if you’re not a likable guy, they won’t do business with you.”
Bertellotti finds that shops that are most successful at pitching to insurers often have a designated spokesperson that is not only likable but also knowledgeable and articulate. “The body shop owner is the best person to approach the insurance company,” he says. Having your production manager present is also important for knowing “everything about every repair going on in the shop.”
Grooming yourself to give a great pitch to insurance companies can also help you stand out among the competition. If a tough job comes Guthrie’s way, he doesn’t consider it a hassle but rather as an opportunity to improve his relationship with the insurer. “The insurance company will come out to chat, and I see that as an opportunity to really [distinguish] yourself. If you say, ‘I can do this,’ that shows them you can solve the problem,” he says. “They’ll walk away thinking you’re a great guy and [that you] have good equipment and good people. If you’re not like that, you won’t be long in business.”
For Guthrie, last year’s million dollar increase in sales is the icing on the cake. His long-term goal is to bring in a million dollars per month, and he says his relationships with insurers are essential to his shop’s success. “To go up by a million dollars is substantial. It’s not possible to have these numbers without these relationships.”