Propaganda is used in wartime to beat the enemy by creating confusion, thus lowering morale and the will to fight. In the battle to reduce payments to body shops and increase insurance company profits, adjusters often use a propaganda technique called the “bandwagon” approach. This technique says a certain viewpoint is right because “everyone is doing it,” and “everyone agrees.” If “everyone” agrees to cap clear coat at three hours, for example, or to not expect payment for hazardous waste expense or seam seal, then it must be OK.
Sometimes shops are surveyed to find out what “prevailing labor rates” are, suggesting that because a few shop owners will accept, say, $36 an hour for body labor, then that must be the standard for all. This is “bandwagon” propaganda, and it forces shop owners and managers to waste valuable time negotiating with adjusters when there are many more profitable things for managers to do with their time.
USING FIRE TO FIGHT FIRE
An interesting new concept put forth by a company called ThePPages.com — the idea of group agreement versus legitimate group agreement — fights fire with fire. Here, the approach addresses discrepancies in the way the major estimating database providers display “included” and “not included” repair and refinish operations. Because Mitchell, CCC and ADP often have different interpretations of what should be included or not included, conflicts can arise in negotiating payment for a repair order generated by two different systems. ThePPages.com provides a way to determine the issue in a way that is supported by I-CAR, SCRS and ASA, plus major paint and equipment companies. Now this is a group agreement that is hard to argue with.
ThePPages.com is an online provider of collision repair information and training, including an extensive listing of “not included operations” for each estimating system, organized by each vehicle component and backed with videos and/or photos of repair procedures. Sectioning information is also available based on each manufacturer’s repair manuals.
YOU CAN WIN THE BATTLE
On September 20, 2006, at the Pasadena Sheraton Hotel, the new Collision Repair Association of California (CRA) held its first Southern California meeting, and less than a half-hour into the program, it was obvious that this was no timid “Let’s all talk about it” group. CRA could have stood for “Can Really Attack,” said association founder and president Gene Crozat, owner of G&C Auto Body in Santa Rosa, California. Crozat referred to the fact that he’s brought more than 500 small claims attacks and other lawsuits against insurance companies for failing to pay his billed labor rate, failing to pay for proper parts needed to complete a repair or failing to pay the full ticket for materials used — and he won most of the time. Crozat said judges often became so accustomed to his documented arguments that they waived the preliminaries and went straight to a judgment in the cases. In fact, it is now well known that in the Santa Rosa area, insurance companies pay the highest labor rate in the country — almost certainly because of the efforts of Gene Crozat.
At the meeting, consultant Allen Wood said the association was formed because its members were tired of waiting for others to fix problems and were very concerned with insurers’ growing demands without compensation or recognition.
Wood also emphasized the importance of documenting insurance company abuses. If materials are capped, he says, don’t adjust your invoice to match an insurance company’s demanded deduction; show the invoice as having a deficient payment instead. He recommended doing the same with your labor rate if you don’t have a DRP contract agreeing to the lower rate. If you accumulate enough invoices showing the unpaid balances, Wood said, you will then have documentation to prove illegal and unfair business practices. And if you can get your local autobody association to join in the battle, Crozat and Wood demonstrated that it is even more possible to win.
The choice is yours. How far are you willing to go to fight unfair business practices? If you win, you could see a much better bottom line.
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.