When it comes to negotiating, knowledge really is power. That's the message John Shoemaker, regional sales manger at Pro Finishes Plus and author of the ABRN Profit Motive articles, delivered in his Thursday afternoon session, "Negotiating for Success – A Look at the Negotiations Necessary to Keep Your Collision Center On Top."Like this article? Sign up to receive our weekly news blasts here.

While negotiating skills are an important part of working with insurers, employees, and vendors, having good data on hand to back-up your position will help make sure all parties involved in the negotiation can come to a workable agreement that can benefit everyone.

The problem, according Shoemaker, is that "Not a lot of people do well when it comes to negotiating, whether it's with customers, suppliers, vendors, or even their own technicians," he said.

That last concept may be new for many in the collision industry. Although most shop owners immediately think about the breakdown in negotiations they've experienced with insurers and some vendors, Shoemaker said that dealing with technicians and other employees requires many of the same skills. "There are a lot of failures in shops in terms of just working with technicians properly," he said.

Shoemaker recommends getting more feedback from technicians about why they may be unhappy with labor times, for instance. Doing so will not only help settle internal disputes within the shop, but also provide additional feedback for insurance company negotiations.

"Find out why there is a disagreement, and educate the estimators," Shoemaker said. "If you find out why the tech is upset, it can make it easier to discuss the issue with the damage appraiser from the insurance company. Get all the information you need and use the tools around you to push back on some of these things."

As for vendors, Shoemaker said that many shops miss opportunities to work out better deals with their trading partners. "They never go back and try to get better discounts," he said. "Take your purchasing reports, go to the vendors and say, 'Here's the dollar amount I bought from you last year. You are getting a big percentage of our business,' and then use that to work out a discount. There are benefits that people just aren't taking advantage of."

Improved shop management systems that can provide these types of reports are helping owners make these arguments. With detailed information on how much the shop is spending on paint or towing or any other service, owners can typically work out deals that benefit both parties. "If you use the same towing company every time, you should be getting a volume discount from them that will help with supplemental charges," Shoemaker said. "You should be able to buy wholesale and sell retail, just like with parts and paint."

Negotiating with insurers also relies on hard data. Have the facts to back up your position, and you can negotiate from a better position.

"Use what you are getting out of the shop management systems," Shoemaker said. "Use cycle time ratios, and let them know what you are producing. Use that as a bargaining chip. The shop should be providing information, and not waiting for the insurance company to tell them what they need. Don’t be reactionary. Tell them upfront what you can do for them, and that can make it easier to get involved in a direct repair program or get their drive-in work."