The Mafia Offer
As I write this, I’m in a very snowy part of Italy, having just visited a fantastic body shop in the northern city of Padua, at the foothills of the Alps. Nuova Milano is a state-of-the-art collision repair center that has managed to differentiate itself from its competition in a number of ways—ways that have enabled it to secure significant work volumes from Italian insurance carriers by delivering something very special.
The owners of the body shop knew that despite having been in business for a significant number of years, having up-to-date equipment and a smart reception area were not enough to attract new work in a very competitive marketplace. They understood that in order to attract work, they needed to deliver something different than their competition. This meant moving to a brand new building and working out how to create an environment that enabled very fast workflow as well as predictability into the system. That way, they could deliver lower cycle times and repair vehicles accurately at a lower cost than anyone else. They implemented new solutions for continuous work, re-skilled staff and implemented Robotica catalytic drying equipment so that they could dry paint in a couple of minutes, as well as a number of other methodologies that differentiate them.
The shop is very impressive. Of course there has been significant investment, but it has created a sustainable and profitable collision repair shop, because their insurance customers get a solution that is consistent, affordable and delivers an average cycle time of just three and a half days, which is less than half that of typical Italian body shops.
As I am sure you are aware by now, I work to design body shops that can achieve continuous workflow using methodologies such as the Theory of Constraints (TOC) and Systems Thinking. Eli Goldratt, an Israeli physicist and mathematician, was the original founder of TOC principles, a way of pulling more throughput from existing resources, and those are the tools we use to create shops that can deliver industry-leading metrics.
A body shop that runs at a lower cost, can deliver more, and deliver in a predictable and consistent manner, attracts the attention of customers desiring a better outcome than their current supply chain. In our terminology, this is what we call a “mafia offer,” an offer that your customer cannot refuse. It’s the single most important asset in attracting and retaining customers.
That, of course, is only part of the success strategy. It’s not enough to have a superb body shop that delivers more than its competition. The shop also has to tell everyone about its capabilities and close the deal. This we call marketing and sales. You already knew that, but it’s really important to understand the difference between the two, as they achieve very different functions. I once heard the difference between the two being summed up as the following: Marketing is like spreading glue on the ground and spreading bird seed in it to attract ducks so that they get stuck to it; sales is taking a gun and shooting them.
Once you’ve created your “mafia offer,” strangely enough, customers will not come running to your door unless you shout about it. It’s not enough to have a business that can do amazing things without a marketing and sales solution. Clearly in this short piece we cannot go into the specifics of marketing, as those discussions tend to stretch into hours or even days, but it’s important to ensure that you create the relevant ‘pull’ to entice potential customers to understand what you are capable of. There are many methods in order to do this, such as press release_notess, brochures, social media, advertising, canvassing, radio, etc.
Once you get an inquiry, you now have the opportunity to close the deal and secure the sale. If you are talking to insurance carriers, you will need to persuade them that your offer is better than their current supplier. If it’s a “walk-in” estimate, you will need to use your skills to ensure they book their car into your body shop. The important point here is that you need to create a strategy for each customer type as to how best to close the sale. The most important point of course is to ask for the business. It sounds ridiculous, but so many people never actually ask for the order. Make sure you do. Your processes will do the rest and growth will follow.
Jon Parker is managing director of the Byteback Group, a U.K.-based information technology and services company aimed at advancing the collision repair industry. Parker can be reached at email@example.com.