Employee turnover is unavoidable. Some turnover is desired, even needed in our industry, such as someone leaving an estimator position to advance, possibly into a managerial or ownership role. Other turnover, known as turnout or leaving the industry, also occurs as people grow and change. Either way, there are always relatively new folks replacing those who leave and continuing education is one way to help increase and ensure their knowledge. Helpful, monthly articles may be an effective way to accomplish that.
This column was started a few years ago as an additional educational resource for newer estimators. Assuming that there is regular turnover in estimator positions, both in repair and insurance businesses, a month-to-month series of estimating basics should help raise the level of training as a whole. From comments received, it has been beneficial.
Let’s get back to basics. Why do we write estimates?
Some customers think an estimate is still their starting point, unaware of all the repair and pricing variables that go into an estimate. They then become surprised, and maybe a bit suspicious, when the bottom line changes during repair.
Some customers still think they have to go around and collect competitive estimates before contacting their insurance company. Everybody loses in this scenario.
Some shops try their best not to write estimates. They may have something there. Compared to any other estimate written, whether higher or lower, it looks bad. Helping a customer through the whole process is the big picture. An estimate may or may not be a part of that. In the end, isn’t a final bill all we need?
Regardless of the thoughts above, estimates are here to stay. Even with inherent lumps and bumps in the process, they get repairs underway. Estimates are written for three basic reasons: as a sales tool, as a repair plan and as an exchange of value.
As a sales tool, your estimate can help persuade vehicle owners that you are best qualified to repair their damage in the most efficient maner. An estimate can give you a tool to use for discussing what needs to be done, how your facility is equipped to do it and why your staff can do it best. You can discuss the ways in which you will help them through the entire, and sometimes confusing, claims process. You will make sure their vehicle is returned “as good as new.”
As a repair plan, your estimate shows all parties involved how to go about repairing the vehicle according to your decisions. Of course, this plan will follow industry procedures and local policies. This will make it easier for the parts, frame, body and paint departments to plan their work and be prepared to do their part of the process in an efficient and professional manner. With a good plan and everyone well informed, repairs should flow through the shop as expected.
As an exchange of value, your estimate starts the negotiation process. After all, it is an “estimate” of repair costs. It itemizes repairs to damage that is visible, adds steps needed to complete repairs and applies cost factors. Many of these are subject to negotiation. Agreement needs to be reached between the buyer (insurance company) and seller (repair facility) in all these areas.
Keep in mind your purpose for writing that estimate. It is likely to be a combination of the above, depending on each circumstance. For the “shopping” customer, a sales tool approach would be emphasized. You need to sell your estimate, yourself and your business better than all the other repair businesses that the “shopper” will visit. Even if you decide to compete on price, the sales focus is still important.
For the direct repair program (DRP), your repair plan would be emphasized. Negotiated items have already been established and the customer is less likely to shop for estimates. There is still some selling involved but not on the scale of above.
As an exchange of value, your estimate can help an insurance adjuster understand your thoughts, repair decisions and judgment amounts. This can start the negotiation process before an adjuster has already firmed up his or her decisions without your input.
Employee turnover is unavoidable. Continuing education is a must. This series of articles is one avenue that can add to your overall training plan, especially for those new folks. Let us know if there is a topic you’d like to see addressed here.
“Success is the progressive realization of a worthy goal or ideal.”
- Earl Nightingale
