Most of us will never experience a personal or professional bailout in our lifetime. You fail and there is no return. What are the repercussions of failed attempts by the OEMs to survive?
Parts used in collision repairs may become harder to obtain as companies lose suppliers that are farther out of the stimulus package. Most vehicle manufacturers are assembly companies and rely on parts manufactured by much smaller sub-suppliers. The suppliers are vulnerable to demise as the economic clouds shadow over them as over the past few years have been beaten to a minimal profit margin. Timing the delivery of parts can be greatly affected with smaller ordering sizes as fewer vehicles are being manufactured. This could lead to delays in your shop or the need to better shop for timely suppliers.
The trickle effect can make its way from parts to supplies and any item used in the manufacturing of a vehicle and also used in the collision repair process. What about development of repair procedures by the manufacturer? Corporate downsizing normally hits non-essential employees or departments that may not actually add to the profitability of the vehicle sale. While we in the collision industry may disagree with the corporate accountant that doesn’t see value in repair procedures actually adding to the profitability, some OEM’s find themselves cutting staff and services that we have grown to rely on.
What about development of repair procedures by the manufacturer? Corporate downsizing normally hits non-essential employees or departments that may not actually add to the profitability of the vehicle sale. While we in the collision industry may disagree with the corporate accountant that doesn’t see value in repair procedures actually adding to the profitability, some OEM’s find themselves cutting staff and services that we have grown to rely on.
Another key area of cuts is training. Training departments normally are also suspect to cuts by the accountant knife. Training is a cost for the vehicle manufacturer and normally not gauged correctly as a return on investment. Even though proper training can ensure proper repairs and maintain brand image when a customer can get a hassle-free proper repair because of a trained technician performed the repairs. Training can also decrease repair times through improved efficiencies gained through proper execution of a task. As the vehicle manufacturers streamline and look for savings to return to profitability, so must the operator of a collision repair facility.
As the economy tightens, repairs sometimes decline because the lack of money by the consumer to pay the deductible. On the flip side, some customers will invest in additional repairs to keep the vehicle going.
Put some additional services to work in your facility such as oil changes and filter replacements, including cabin air filters that normally are never replaced. These now may require replacement since vehicles are being kept longer. Tire service also is an additional income source as customers are keeping vehicles past normal leasing programs length. Add nitrogen fill capabilities and you can add to a customer’s fuel economy and provide a better maintenance of their tires.
Other services becoming popular are reconditioning headlights that have had their finish clouded by excessive sunlight and exposure to the elements. These services can enhance the customer’s satisfaction in your operation, while adding safety.
Consider going into the touch up or re-conditioning business. As customers extend their ownership of vehicles, they’re going to see more wear and tear, along with rust, scratches, and dings. You can suggest having this work done in conjunction with collision work or as separate repairs.
Getting customers in your facility may be harder than ever. Even though the number collision shops continue to decline, additional incentives and strategies to lure the customer to you instead of your competitor may be necessary. While costly additional advertizing may be necessary. Are you using the Internet to promote your business? I always search the Internet before heading to the store to make a purchase, even simple service purchases. Today, many shops utilized the Internet to steer customers to them. Some often features to enhance the customer’s satisfaction by giving updates on-line of where the vehicle is in the repair process. This benefits the shop since customers can see the progress of the work on their vehicles and therefore do not have to call your office. There are software companies out there today that specialize in setting up your site to do this.
What else can you do to attract customers? Check with your local television cable company. Sometimes these “grassroots” operations have extra airtime that can offer a 45-60 second spot to get your name noticed at a reduced price. Several paint companies offer premade commercials already to launch. You just add your facility information. These commercials could be part of services you are entitled to from the paint company.
You should also look into free advertisements. Ever consider offering a free service or seminar to get customers to notice your company? You could sponsor a seminar on safe driving for younger drivers at a local high school. These seminars give good advice to young drivers and also make the community aware of your concern to prevent accidents, not just profit from them. Local TV news shows are always looking for community services stories and you could be one. A local news spot with your company name and phone number behind the interview may reach more potential customers than the phone book.
Also, giving something back to the community is a good way to get noticed in this changing economy. After school sports and community activities often are the victim of budget cuts. You can provide sponsorship. A small investment in your community can bring the community to you.
One problem today is that everyone is working so fast in business to survive, they fail to see that even a small investment can provide noticeable help. Get involved in your community. They need it, and you need them.
Have you discussed your business with your largest customer and business partner? While many repairers criticize the insurance industry, keep in mind that they believe they are protecting their customer and want the vehicle repaired back to a pre-loss condition. They pay a majority of the repair costs and are concerned about the industry and making the proper repair. Consider inviting your insurance partners for an open house or seminar and show off your facilities – especially the hi-tech capabilities of your structural repair equipment, resistance welders or new water based paint system.
Make sure your investments are noticed. Your suppliers can help with seminars and training to make sure that your business partners are working from the same page or script that you are.
Beyond the insurance industry, invite your community to take a look. Offer to test tire pressure for anyone that shows up to your facility or sponsor a car wash for a local group, have a cook out and let your neighbors see your facility. We all know the best advertising is word of mouth. If we connect with the community, we will see them return.
So what’s your stimulus package? It’s self-made and an ongoing effort supported by yourself, your customers and the industry.
