On Thursday afternoon at NACE, Hank Nunn, western region collision director at AutoNation, provided a basic introduction to negotiating principles designed to help shops work through carrier and vendor issues.
"This affects everybody, every day, and you have to be trained on it," Nunn said. "The people you negotiate with in the insurance industry are getting trained regularly, and so are most large suppliers. We need to step up to the plate, too."
The key to more effective negotiations is to move away from simple arguing, and transition to a style in which everyone can feel like they "won" something.
"The most common style of negotiation in the collision industry is the optional negotiation," Nunn said. "Each side defines a position, and then defends it to the point that they make foolish decisions, get emotional, and get angry. If you are emotional and angry, you can't make a good decision."
These positional negotiations effectively draw a line in the sand and invite hostility. Instead, shops should use a "principled negotiation" approach: separate the people from the problem; focus on interests instead of positions; invent options for mutual gain; and insist on objective criteria.
"You find out what the other side needs, and how you can fulfill those needs and your own," Nunn said. As an example, he cites an adjuster that refuses to pay for feather, prime and block. In a principled negotiation, the shop would ask the adjuster what the true issue is – does the adjuster just not want to pay for the operation, or is he worried that he'll get an automatic audit if that operation shows up on the estimate?
"You have to probe and ask questions, and find out what's really driving the person you are negotiating with. Once you find out the true concern, you can address it," Nunn says. "Is there a way to do this without exposing that adjuster to an audit? You find a way for both sides to get what they want and walk away friends."
Nunn told attendees that they should follow up with additional training.
Spending some money on a two-day seminar can quickly pay off as long as shops follow some basic negotiation principles and move away from the antagonistic approach that so frequently marks insurer/shop interactions.
"There are terrific resources outside the industry," Nunn said. "There are excellent training classes that aren't necessarily targeted at body shops, and you get good training and a skill set that will pay quick returns."
