Failing to include clean-up expenses in your estimates can be costly to your business
Your mother always said, "You only get one chance to make a good first impression." This is true when delivering a vehicle to a customer after repairs are completed.The customer is nearing the end of a life-disrupting, sometimes traumatic experience that for them has been a voyage into unfamiliar territory. A key to ensuring a customer's faith in a repair is delivery of a clean vehicle. The greatest attention to detail during the repair process easily can be negated at the end of the process by a poor post-repair cleanup. Removing the signs of repair is important to maximizing customer satisfaction and maintaining vehicle resale value. Compound residue, overspray, buffer swirls and dirty interiors are all telltale signs of repair work that are easily spotted by a customer.
One of the largest most uncontested concessions given by a repair facility is detailing a vehicle after repairs. According to the June 2005 U.S. Department of Labor Bureau of Labor Statistics survey, the average annual cost to employ a detailer is $20,904, not including benefits.
Detailing is a necessary and justifiable step needed on all repairs, especially in today's DRP-driven environment. Yet, there are no allowances for detailing given in the labor times within the estimating system databases.
There are several benefits of charging for detailing services. First, charging for vehicle cleaning will make the customer appreciate, and hold the shop accountable, for a thorough cleaning of the vehicle. Second, adding a line item to the estimate for post-repair detailing will increase the labor hours on the estimate and provide a more accurate cycle time calculation. Last, but most importantly, charging for post-repair detailing will generate revenue in a cost center that for years has been written off at a loss.
It is unacceptable to operate a division of a business at a loss. In today's world of severity lowering techniques, it is critical that repairers get compensated for all procedures necessary to deliver a satisfactory product to the consumer. Billing for detailing on an estimate is not a question of being competitive, but about achieving your number-one goal — earning a profit. The effects of billing for vehicle cleanup will be immediate. Charging for details not only increases sales, but it dramatically impacts the net profits by recouping the costs of staffing your detailing department. Recovering these costs will speed your shop toward a break-even point.
Given that labor is a high gross profit operation, once the break-even point has been reached, all the additional revenues generated from the detailing department will transfer straight to the bottom line of the income statement. The most attractive part of billing for details is that repairers will not have to add any expense or perform additional work to reap the benefits of the additional revenue and profits.
There are two methods of determining the amount to charge for detailing (see sidebar at left). The first method is to charge a flat rate fee per car. This method is easy to administer, but has limitations due to the fact that different repairs require different amounts of cleaning. The second option is to charge an hourly detail rate per job. This method will provide a flexible billing method catered to each vehicle's specific needs after repairs are completed.
Insurers will offer strong resistance when asked to pay for detailing. Repairers must be prepared to educate adjusters on the reasons detailing is necessary, not included, and not a complimentary service of the repair process. Gas stations and dealerships are two perfect examples for justifying the costs necessary to clean a vehicle after repairs. First, gas stations do not give out complimentary car washes for filling up with gas. Gas stations charge $7 to $12 for a machine to wash the exterior only of a vehicle. Secondly, dealerships will often machine-wash a car after performing service work on the vehicle as a complimentary service. This scenario does not apply to the collision repair industry as tune-ups and oil changes are not invasive repairs. Repairs made to a vehicle often require the removal of multiple panels exposing the interior of the vehicle for days. Welding, sanding and buffing are all unavoidable operations that contribute to the need for a dedicated, trained employee to hand-wash and clean a vehicle prior to delivery. The signs of repair work cannot be removed by a machine-wash of the vehicle's exterior. They must be removed by hand to ensure a top-quality product, inside and out, is delivered to each customer.
A firm and consistent commitment by repairers to get compensated for detailing as a necessary part of the repair process will insure that this seldom-charged-for operation will soon become a normal charge for repairing vehicles.