Winter Wimps and Holy Whores

December 23, 2004 by
Filed under: Uncategorized 

Ain?t winter great? We?ve got horny deer chasing each other around. We?ve got hunters chasing deer through the woods. And we have thousands of drivers creating millions of pounds of pulverized venison with their vehicles. Lots of nice front end hits and soft side hits have our shops full in the northern part of this great republic. Now the snow is falling and wonderfully talented drivers are creating backlogs in every shop in the snow belt. Finally, we can start making some real money! Sure, right.

Just like a bunch of desperate crack whores, most shop owners will continue to sell themselves to the lowest bidders.

?Hey ho! How much fo half n? half??

?How ?bout fify cent??

?I ain?t got fify cent. How ?bout some pocket lint, ho??

?Sho baby, dat fine.?

What is your posted labor rate? Is it at or about the rate the insurance company is willing to pay? If it is, how can you possibly expect to get one penny more? By law, you can not charge any more than your posted rate. How are you going to negotiate more money if you?ve set your posted rate at the lowest rate being paid? This isn?t rocket science. A third grader can understand this concept. Why can?t collision repairers understand it?

Your posted rate should be at least what your local dealership is charging for mechanical work. There is no law against charging less than your posted rate. Oh, what, you feel guilty for charging more than the insurance company is so generously offering? You?re not worth it? If some bully at school called you a fag every day, is Barney Frank now your hero? Are you reading ?Johnny has two daddies? to your kid every night at bed time? The insurance industry says you?re worth $40 an hour, and you believe them, you call it the gospel. Maybe you should be marching in drag down the middle of San Francisco?s streets.

Remember what your product is, what you have to offer the public. It is not repaired vehicles. It is not paint, bondo or sheet metal parts. You sell labor. You have a limited supply of this labor every week. Unless you force your hardworking employees to work more hours or work faster, or you hire additional people, you cannot increase your inventory of labor hours. When a product is in short supply, like when the deer start moving and the snow starts flying, that product has more value than it does when business is slow. Look at gas and fuel oil prices. When the Arabs get together (OPEC) and conspire to cut production of oil, prices rise. If people refused to pay the higher prices and drove fewer miles, the prices wouldn?t remain high very long. But people don?t change their driving habits, and the prices don?t fall until one of the OPEC members screws the rest of the group and increases production again.

Think about what happens during your busy season. During the bad weather seasons most shops are busy. Every one of the shops in your area have a fixed number of repair hours available. If you turn away a repair that isn?t profitable, and the customer takes it to the whore down the street, chances are that that whore is even busier than you are. He may take in the repair, but he probably won?t get to it soon. Unfortunately, the whore down the street is too stupid to understand the basic principles of economics or business management, and he thinks things are great because his shop is so busy.

I heard on the radio the other day that some famous restaurant was closing down in Ireland. It was an icon and had been open for a century or something like that. The place always had a line of people waiting for a seat. People came not just because of the food, but because of the atmosphere and to be part of a legend. The reporter was interviewing people to get their feelings about the place closing. Everyone was extremely disappointed. But one guy, the only smart person the reporter interviewed remarked that he found it inconceivable that the place was going out of business. The owner was shutting down because he had been losing money for years. This smart guy couldn?t understand how a restaurant as busy as this one wasn?t making money. I immediately smiled and thought to myself, ?I know the reason.? The restaurant owner didn?t keep his prices up with inflation. This poor, idiot restaurateur worked himself right out of business, just like many of you are doing. Yup, you people are busy as hungry bees, but I don?t have to tell you how much, or how little money all that business is making you.

Not all of you are working for nothing. More and more collision repairers are educating themselves. They are learning about economics and practical business theories. These business owners are discovering that they don?t need to be whores to keep busy and make money. They are discovering that being busy and having a backlog has little or nothing to do with making a profit. They are realizing that they have a valuable product, a product that is in great demand. There is a quiet but growing trend of collision repair shops, once heavily reliant on DRP contracts that require low labor rates and parts discounts, that are now weaning themselves off of the DRP addiction. These shops are dumping their DRP contracts, giving the worst offenders, like Allstate, Progressive and Nationwide a good kick in the backside. And these shop owners are amazed that their world doesn?t end. In fact, though volume decreases, gross profits soar while stress levels plummet.

More important than profits, however, is the self respect these shop owners gain by quitting their prostitution lifestyle. There?s the realization that their shop is offering something more, something better than the industry whores. Instead of competing on price alone, they are now competing on quality and service.

Recently my wife and I drove more than an hour to a restaurant in Providence RI. It is in the old historic district. My wife had heard the food was incredible. Now, we could have gone a couple miles down the street and eaten at any number of decent restaurants for about one third the cost. But instead we paid about $100 (and we don?t drink alcohol) for the two of us to enjoy one of the best meals we?ve ever had, in one of the nicest atmosphere?s we?ve ever experienced while dining. Normally I?d choke paying that much for a dinner, but this place, with the incredible food and service, made the price seem like a bargain. I told the waitress that I felt like I just cheated on my wife because everything was so much better than I had expected. We can?t wait to go back.

This restaurant is always busy, and it?s been in the same spot for many years. Though the area it?s in isn?t wealthy, it?s barely middle class, it attracts people from all over southeast New England. Their prices are high, but the food and service is worth every penny, and more. There are fast food joints and pizza houses piled up all around this restaurant, but all that competition is not competition at all. The owner of this restaurant understands value, and he understands that he doesn?t have to sell his soul like a whore to make a good living. It?s only food, but bada bing, mama mia! This is food!

Nope, you?re right, cars aren?t food, and body shops aren?t restaurants. But there is much to learn from other industries. We are an industry of craftsmen. While we can learn to be efficient, we cannot get the same results using the fast food business model as we can using the fine dining business model.

Insurance companies are successful at keeping your labor rates low only because you let them. It?s clear and obvious that they will take every inch you give them. Their financial power is snowballing; just look at their influence on the database providers. Paint suppliers are even sleeping with insurers now and getting into the ?network? business. How long before insurers have control of the paint and materials market? Insurers are getting into the parts business. They already finance the aftermarket parts industry by backing CAPA. I bet a little investigation will discover insurer interest in some of these commie junk part manufacturing companies also. Companies like OE Connection are helping insurers track DRP parts purchases. How long before insurers get involved with OEM parts manufactures pricing structure? Many insurers are involved with I-CAR. How long before they start influencing recommended repair procedures to save themselves money?

Each year in our country thousands of young girls runaway from home and end up in the care of slick pimps who promise to love and care for them. Soon these young girls find themselves prostituting. The pimps keep the johns flowing. Gradually the pimp demands more and more of the girls? earnings. Then the pimp gets his whores hooked on drugs. This ensures the whores will continue working so they can afford their drugs. The whores get broken down and worn out, but that?s OK with the pimp because there are plenty of low life scumbags out there who will pay ten or twenty bucks for an old crack whore?s services. Eventually, these once young and pretty girls die as AIDS infected, toothless, scrawny, stanky, crack whores, and are forgotten. There are plenty more to take their places.

As you prepare for a new year, give some thought to your standing in your community of collision repairers. Is Allstate your pimp? Nationwide? Progressive? Are you spending more time on your back and keeping less of your earnings? Have you been slapped around by your pimp because you charged for something your pimp said you couldn?t charge for? Are your ribs beginning to show because you?re giving so much of your earnings to your pimp that you can?t afford to feed yourself properly? Has disease taken hold of your business due to your lack of self respect and self care? Is your pimp?s finances getting better while yours are getting worse? Have you been stealing from your customers while they aren?t looking so you can afford to eat? Do you even realize you are a whore? Or does your pimp have you convinced that you?re a high class ?call girl.?

Merry Christmas and Happy New Year everyone.

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Comments

2 Comments on Winter Wimps and Holy Whores

  1. Bob on Thu, 23rd Dec 2004 2:00 pm
  2. Great article on some of the many woes in our industry. It is a shame we can’t shake some sense into the average collision shop owner. If they only understood the power they have to bring about change by simply "asking" to be paid fairly. Remember the old saying "if you don’t ask, you don’t get". Most shop owners fail to understand the importance of charging fairly for what they do. When labor rates are artifically depressed the shops need to find ways to generate enough profit. They must study and learn the "P" pages and make sure they earn a profit on every job. Asking for a fair labor rate is essential to your survival.

  3. John on Thu, 23rd Dec 2004 3:04 pm
  4. I agree with Bob. I’ll add that only about 20% of the shop owners are businessmen, the others are lovers of cars and repair cars for the fun of it and don’t understand how a business should be run. This hasn’t changed since I started in 1951. John

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