How the industry needs to change
Column by NANCY ROLLAND
Industry operators are going to have to treat their employees and customers better if they hope to remain competitive. That’s the message that several hundred collision repair operators and suppliers heard loud and clear at the recent Southeast Collision Conference in South Carolina.
The gathering atmosphere was energetic and collegial, with some of the best speakers in the industry providing engaging sessions with small discussion groups and product demonstrations. There was even a skills contest with a cash prize of $1,000! Mike Anderson, former MSO body shop owner and founder of Collision Advice, spoke to the audience regarding his perspective on current industry conditions and what he is witnessing through his advice practice:
• 172 of its clients have sold their collision businesses to consolidators in the past 18 months
• MSO employee turnover was 43% in the first year following an acquisition
• You can compete with the big operators: just change the way you play.
• Develop your own team instead of stealing it from your competitors
Mike spent a lot of time talking about things that SHOULD CHANGE in the industry, especially related to staffing (salaries, career advancement and retention). He also talked about how stores need to do a better job of educating and treating their customers and how consumers will continue to demand a more modern customer service experience. To set the stage for the salary discussion, Mike posted a help-wanted ad for Dick’s Drive-In, which has multiple locations in Washington, which read:
• Starting salary at $19 per hour
• Medical insurance paid 100% by the employer
• $5,000 to $9,000 per year for tuition/childcare
• 401(k) with 50% employer match
• Paid leave for voluntary service
• Up to three weeks of paid vacation
• Promotion opportunities: ALL managers are promoted from within
To drive the point home, Mike asked several members of the public, “If I wanted to come work for you with no experience and was ready to start as a cartoonist, what could you offer me?” Most store owners shared starting wages of $12 to $15 an hour, a week’s paid vacation, and partially paid health insurance premiums. Clearly not very competitive.
Next, Mike shared a story about his nephew who was going to work for Amazon after high school a few years ago. Today, this young man, in his early 20s, earns more than $100,000 a year, owns about $200,000 in Amazon stock, and loves his job.
The fact is, the collision industry doesn’t have a staffing problem, it has a compensation problem. The job market has changed and to compete effectively with employers like Dick’s and Amazon, the industry is going to have to change the way its employees are compensated.
Mike also offered some great thoughts on growing and retaining your employees. His suggestion was to grow your own employee base instead of hiring them from competitors. A successful organization should be able to provide career path options for those interested in advancing their roles. Retention bonuses, rather than hiring bonuses, should be used to reward seniority. One store shared its $500 per year of service plan, capping at $10,000 per employee per year. Employee appreciation through cash bonuses was discouraged as it was thought the impact was quickly forgotten. Employees also felt more appreciated when store owners rewarded them by meeting their needs in other ways, such as offering personal services such as housekeeping, landscaping, or advanced training.
Mike also challenged the audience to do a better job of educating and understanding his customers. He asked us to enter into the client’s state of mind, to tap into his feelings and emotions that arise immediately after an accident: fear, frustration, anger, anxiety, etc. Several members of the public offered their store’s phone number so Mike could call, live, with all of us listening. Of the three stores called, one never answered, one put us on hold for nearly a minute before we hung up, and the third store wanted us to call the insurance company first and then fix an appointment.
The takeaway here was that no one offered sympathy or checked in to make sure everyone was okay after the accident. The conversation went straight to the insurer. Nobody talked about OEM certifications to encourage the customer to choose their store to do business with based on their advanced training.
Another important topic of discussion was about improving the customer experience. Mike asked viewers to reflect on their own daily lives and shopping preferences. Amazon has taken shopping to the next level, making it easy to buy just about anything your heart desires and ship it right to your doorstep. You never have to get up from the couch or spend your precious time shopping. Prescriptions and groceries can be delivered free of charge to your home, on the day and at the time that suits you. Yet for a customer to do business with a collision repair facility, at one of the most frustrating times in their life, they must take time off work and come to your facility on your terms. Did you know that nearly 50% of accidents happen outside normal business hours (ie Monday to Friday, 8:00 a.m. to 5:00 p.m.)? Do you have a way for these potential customers to contact you outside these hours? Do you offer online appointment booking or do you have the ability to upload photos of vehicle damage prior to viewing? Otherwise, you’re probably missing out on a huge opportunity to earn that business.
As we left the conference, in the parking lot was the 2010 Honda Fit made famous by the John Eagle lawsuit, in which a Dallas-area couple, the Seebachans, were awarded $42 million after shoddy repairs on their vehicle trapped them in a crash of fire. The car was on loan from the Auto Body Association of Texas, which was represented by Burl Richards.
“Matthew Seebachan’s burns were so severe that medical students at the University of Texas Southwestern Medical Center studied him ‘because they had never seen a living corpse,'” said Todd Tracy, l lawyer who represented the owners of the car.
“Childbirth is an eight out of 10 on the pain scale, and that’s with an epidural,” Tracy said. “Matthew lives in 9 (on the pain scale) – 24 hours a day – and he will for the rest of his life. That’s why the jury gave him $42 million.
When you see the vehicle, you realize the importance of your work, the impact it has on families and the financial health of your business.