How to Keep a Customer Through a Total
In 2015, nearly 20 percent of all claims were flagged as total losses, according to data from CCC Information Services, up from just 9 percent in 2000. And CCC says that those rates, coupled with difficulty for customers to replace their vehicles due to higher car prices, a competitive used car market and longer loans, lead to significantly lower customer satisfaction ratings for insurers when the vehicle is totaled versus when it’s repaired. That’s why, Jeff Bagley says, collision shops need to be making more of an effort with total loss customers.
“A lot of times, a total loss is a thing you just put in the back lot and you just forget about it because you’re not going to make any money on it and you don’t want to put any effort into it,” he says.
However, two years ago, Bagley, owner of three Fix Auto shops in the Las Vegas area that work on 170 vehicles per month (30 percent of which are totals, thanks to the heavy-hit location) decided to put into place a process to help customers through a total-loss situation and keep them as customers for life. The result has been not only an uptick in customer service ratings, but also five new customers a month as a result of that positive repair experience.
There are different kinds of total loss customers: There are customers who understand the process and those that don’t; there are customers who just want their car to total and move on, and there are customers who really want to keep their cars. Those are the basic sides you’re dealing with and it’s crucial you determine what kind of customer he or she is at the beginning of the repair process.
When a vehicle is towed in or brought in, we typically know whether it will be a total loss. The problem with total losses is that insurance companies don’t want us to tell the customer that the car is a total loss. They want to be the ones to tell them. So, right off the bat, we try to prep them. You tell them it’s a possible total and start explaining the process: how the valuation is going to go, the information the insurance company uses to evaluate it and that it typically takes 2–3 days for them to hear back from the insurance company. It’s also important to emphasize that the customer will hear from the insurance company, not from us. That’s how you lay the groundwork to find out what kind of customer you have.
Then you try to find out how the customer feels about his or her car. The customers who know a little bit about it and want their cars to go away, it’s really simple—you just speak with them about what’s going on. But the customers who don’t know and don’t understand why their cars are totals and they don’t want it to be a total, those are the ones that you have a good opportunity to create a bond with or help them with the process so they can make a good decision with what they want to do.
I think the challenge is that a lot of customers have no idea what their car is worth. We explain that, as well as the total loss laws in Nevada, which are unique and can be confusing to insurers and customers. Essentially, the total loss law is 65 percent here. Some customers don’t understand that the used car market is difficult right now and if they have a car that has low miles and they put a lot of maintenance in it, It might be worth it to get the vehicle fixed. We have three or four totals a month that customers retain because they know they can’t go buy another car.
Next, you write the estimate, do your valuation and upload to the insurance company. This is the part that’s a little difficult for shops. Sometimes customers get the call from the insurance company before we’re made aware of the total loss status. We want to stay on top of that and touch base with the claims center, particularly because we frequently don’t receive any communication back from the insurer if a vehicle is a total loss. So, we use AutoWatch to keep in touch with the customer and try to call them every other day to find out if they’ve heard back from the insurance company.
As soon as they get that call and find out their car is a total, they usually call us right after. Based on our initial conversation, we will likely know how this next conversation will go. If they want to keep the car, we’ll answer any questions about how we can repair it. If they want to move on, we’ll let them know that the car is not going anywhere and to feel free to come by and get anything out of it or retrieve the plates, which Nevada requires you turn in at the DMV.
While some shops have relationships with dealers and refer customers, we no longer do that. We tried doing that years ago and the feedback we got from our customers was that they thought we were trying to push them to a specific person who gives us a commission. We have relationships with dealers, but we will not refer customers unless they directly ask.
What has been most crucial is following up with total customers. It was an opportunity that we weren’t following through on and for the last two years, we’ve made this tactic a priority. We’ve found a way to track our total loss customers by coming up with a database of those customers. We send mailers through a third party company and we have set that up in that company that when we have someone walk in, we try to ask our customers where they came from.