Keith Manich of the Automotive Training Institute (ATI) said collision repairers tell him on a regular basis that they often hear the word “no” when asking to be paid for required procedures associated with the repair plan, and that they “feel intimidated.”
As the director of collision services for ATI, Manich said shops might be told, “You can’t charge for that,” “I don’t care what the OEM says!” or “No one else charges for that.”
“Threats and intimidation are nothing more than a bully tactic or strategy,” said Manich, who trains companies on the “executive” side of the business, including how to deal with financials, managing operations and negotiations. Over the years, he has found that few shops have really good relationships with insurers. He said the key to achieve this is good negotiation.
During the 2017 SEMA Show in Las Vegas, NV, Manich explained how to set up a standard operating procedure (SOP) for negotiations during his presentation, “Preparing for and Conducting Negotiations for Collision Repairers,” as part of the SCRS Repairer Driven Education Series.
Manich stressed the importance of shops being prepared for negotiations with vendors and insurers in order to be successful.
“Negotiation successes result from preparation using consistent and repeatable processes and the discipline to use them effectively,” he explained.
Effective communication is also instrumental. His advice is to focus on the goal, use language targeted to the opponent and a positive approach in tone so he or she doesn’t feel belittled, and anticipate questions that may be asked.
“Both sides are looking at the same vehicle in two different ways,” he said. “One is looking at it as a profit center while the other one is looking at it as cost containment. It’s conflicting objectives from two sides.”
To reduce that tension, Manich said information and supportive documentation are imperative.
“The more information you can provide to whomever that party is that you are discussing this with---That is what will win the day for you,” he said. “We have to make sure that we’re providing the documentation that reinforces the fact that you made a decision for a good cause.”
According to Manich, doing this consistently, helps build rapport with insurance companies.
Manich outlined a long-term disciplined negotiation strategy for shops. The last five steps can be used in the short term and typically lead to a positive result.
1) Opportunity
First, determine what the negotiation is about.
2) Identification
Next, identify the goal the shop wishes to achieve as a result of the negotiation. Manich said developing (SOPs)will help direct the negotiation.
3) Frequency
Think through how often your shop will have to deal with the particular vendor/insurer.
4) Research
Find all supporting OEM information that could be used during discussions, as well as additional information that will help build a case for negotiation.
5) Preparation
Review all documentation in its entirety. Manich said that the opponent in the negotiation will most likely take a financial position. “They will typically be preparing the same way you do, but looking specifically at the cost of repair,” he said. An opponent may also take an irrational position, according to Manich. “Always remember that they have the checkbook, so they may make determinations based on that fact alone, not the repair requirements,” he said. The bottom line is to be prepared to provide as much information as possible to make a rational argument.
6) Execution
When countering data mining arguments, Manich said to keep in mind that insurers have the scope and scale to gather significant amounts of DRP data. “This puts the repairer at a disadvantage,” he explained. In order to build the execution plan, Manich said to remember that repairers provide this information through their estimates. “When things are removed from the repair plan for whatever reason, there is an ability to control that data,” he said. “It is then used against the repairer ‘showing’ that the repairer in fact doesn’t need it.”
An execution plan should include the following:
• Looking at the pros and cons of the position and determining if there is value in its pursuit
• Completing the negotiation planning worksheet
• Getting to know the opponent and finding out what makes him/her tick
• Looking at past experiences with that person or the company
• Asking others within the shop about their experiences
• Identifying supporting documentation
• Prioritizing the information
• Creating a folder containing the relevant documentation and providing it to the opponent
• Making an appointment to complete the negotiation activities
• Keeping the invitation formal because it’s a business activity
7) Packing of documents/materials
Manich said the powers of persuasion can improve the chances of convincing an opponent. These include having the facts on hand, as well as being credible, authentic and sincere during negotiations. The goal is to be compensated adequately for the vehicle. “The best interests of the customer are what we are responsible to communicate. Make the best choice for the car and customer, and back it up with documentation,” said Manich. “This will make sure you win the negotiation.”
8) Post-negotiation validation
When is a win a win? According to Manich, it is when both parties come to a mutually beneficial agreement. If a conclusion cannot be reached, it may have been caused by one of the other parties becoming inflexible or defiant. Manich said the next step is to get the customer involved. A successful conclusion is when both parties have come to an agreement that may have set a precedent for future negotiations. In addition, a financial gain is usually achieved as a result of the negotiation exercise.
Not only does this approach help in dealing with insurance companies, but Manich said it can also be used for any business activity that involves negotiating.
Manich also offered the following tips:
Soft skills to use during negotiations:
1) Eye contact: Manich said to look at the triangle area on the other person’s face going from the forehead to the chin, and to spend at least 20 percent of the time making eye-to-eye contact.
2) Pay attention to enunciation
3) Body language
4) Facial expression
5) Presentation preparation
6) Position and posture
7) Personal space
Do:
• Practice in the mirror and with others in your shop (no matter how foolish you think it is!)
• Keep composure no matter what is said
• Be confident while presenting and stick with the negotiation plan
• Meticulously prepare---This is critical…Have all documentation ready to deliver
• Be ready if the opponent tries to use “scare” tactics and prepared to get the customer involved if necessary. Documentation is imperative.
• Prepare for the opponent to use “scope creep,” which will take the focus off the facts.
Don’t:
• Take anything personally.
• Be disrespectful no matter how or where the opponent tries to lead the conversation.
• Underprepare—it will be evident during the presentation.
• Forget you are the repair expert.
• Use intimidating body language and watch the opponent’s. It will show where the most significant resistance to the argument is focused.
• Move away from the facts---stick to them because those are what will repair the car properly.
For more information about training programs offered by AMI for the collision repair industry, contact Keith Manich at 301-575-9191.
Stacey Phillips Ronak