It's no secret that the demographics in the United States are changing, and those changes will soon start to impact your collision repair business, too. Age, race, gender and socioeconomic status are important factors that you need to understand about your customer base, says Susanna Gotsch, industry analyst at CCC. Gotsch discusses some of the most important demographic changes that collision repairers should understand about their customers.
When it comes to overall population growth, what do collision repairers need to know about?
Currently, the U.S. population is about 318 million and with population growth, the number of drivers in the U.S. is expected to grow as well. Research from the Insurance Institute forfor Highway Safety projects over 10 percent growth in the U.S. driving age population between 2015 and 2030, with the greatest growth among the older age brackets.
Historically, accident frequency declines as the age of the driver increases. Data from the National Safety Council from 2003 to 2014 shows that drivers, ages 25 to 34, consistently account for the largest share annually. With more growth in the sheer number of older drivers, that could continue to reduce auto claim frequency further in the future
Given that population growth, how has it impacted geographic demographics?
If you look at where people live, a lot of growth has occurred in some of the large metro areas. The biggest caveat is that those metro areas also include the suburbs. If you actually look at where people are living, about 50 percent of Americans still live in the suburbs. We came across an interesting study done by William Frey that looked at some of the largest metro areas with populations of 250,000 or more. What he found was that well over half of them experienced stronger growth in suburban growth than in primary city growth between 2013 and 2014.
The difference that shop owners need to understand between the suburban and the primary city is access to public transportation, the ability to walk or bike to work. For most people in the suburbs, a vehicle is involved in some shape or form in their commutes. If you’re living in areas where people rely on their cars, that’s going to drive up subsequent exposure on individual vehicles and we believe that’s what is driving up frequency right now.
What are some changes occurring in the collision repair customer base that shop owners should be aware of?
You need to particularly think about what type of customers you have. Understanding the customer means understanding how they want to be communicated with, the customer expectations, how they find you, how they purchase your product. All of that can vary based on comfort levels with digital technology, whether it’s mobile apps, getting texts and the like. If you look at the younger generations, they’re becoming much more racially diverse faster than some of the older demographics.
If you look at how people access information, Pew Research data has shown that most of the access to the Internet and digital information occurs through mobile devices, much more so for African-Americans and Latinos than whites.
I think the takeaways with this are having the ability to take advantage of knowing your customer base and adapting to the changes, and then understanding the challenges they may be facing financially if they have an older model year vehicle and they owe money on it and it’s a total loss. What does that ultimately mean for their overall satisfaction? Even if the shop doesn’t get the repair, their interaction could potentially be impacted if they’re not clearly helping the customer understand the economics and how the whole situation works.
