There is no doubt that collision repair operators are seeing challenges like they have never seen before, with ultra-high levels of inflation driven mostly, it would appear, on an unsustainable oil price and the uncertainty of the Ukraine-Russian conflict. Shortages abound with the knock-on effect of the lockdowns across the globe by the disturbance of the pandemic.
Staff retention remains a critical area of company management and clearly many body shops constantly suffer in this area of their productivity. At a recent conference held in Birmingham over 80% of owners polled about auto body repair prices said that the process of increasing costs was out of keeping up with real-world inflation. They said that runaway cost increases are averaging around 18% on materials cost when in actual fact they are increasing year on year by around an average of 43%. In the same period labour costs on average should also see rate increases of over a quarter above what they are currently being awarded right now. Profitability is compounded by all this hyperinflation and means that many shops are trading in muddy waters when profitability is viewed.
There is no doubt that South Africa’s unique set of circumstances from a business point of view have not been helped with the latest spate of load shedding from Eskom. Any other civilised nation in the world would have seen a call for a regime change or a general strike at the very least. Containers and shipping costs continue gouge into profit levels which fall to the consumer and importer to sort out.
With compound increases in refinish paint of close to 40% in the first six months of this year, there is indeed a gale force wind on your chest at present. Over 7% of all electrical vehicle harnesses were previously made in the Ukraine which is now knocking into the manufacturing space for new vehicles. It seems the Ukraine produced tons of things we had no idea they were responsible for. And let’s not forget the 4 trillion Dollars being unleashed by the USA to overcome their pandemic ramp-up days.
Sadly, the current ANC government is still like the proverbial ostrich seen to have its backside in the air and its head in the sand. Only the private sector can save the nation going forward, not the bloated civil servants and their kleptomaniac leaders with communistic ideals. They are so busy organising their next ANC conference that they fail to see that Rome is burning to the ground all around them. After two weeks of discussion the answer to our power problems are…. a second state-owned energy supplier! I kid you not, you can’t make this stuff up! Thank goodness for governments the world over at present, as it seems they are providing excellent material for comedians… except we’re not laughing!
Keep it personal
What can you focus on in this topsy turvy world at present to help your business and your sanity? When things are tough, clear communication is absolutely integral. Communicate with your employees about the struggle to get parts and other supplies. Help them, along with yourself, to adopt a more flexible mind set and don’t be afraid to try new processes. Keep it real so that they understand your frustrations. If they are included as a team, they are also able to explain things better to clients on the shop floor who may be experiencing frustration.
This communication trend also needs to translate through to your customers. Don’t let there be no updates. Always keep the client up to speed, even if there’s nothing to report on. For example, let them know that there is still no timeline from a supplier but that you just want to keep them in the loop. Negativity often creeps into any silent gaps, so always fill them and be pro-active and intentional with your messages. With the parts supply being in a state of flux, look to repair versus replace. You don’t have to be heroic and repair every single part, just the parts that can be saved. These repairs will add to your bottom line over time and help your turnaround time with delivering fixed vehicles ahead of anticipated deadlines had you waited for parts to be supplied.
Focus on the emotional side of your client. With years of isolation and now trying to keep your business open and profitable with tons of hard work, we have lost sight of the heart moments that really count in our lives. Enquire how your customer is doing after their accident and help them in any way you can to make the process easier for them emotionally. It may be a normal day for you at work, but for a customer, they’ve just had their world turned upside down by losing their mobility and often this is costing them financially, in more ways than are apparent.
Remember to say thank you. A short hand-written note thanking your client for their patronage always goes a long way. A personal touch will help any word-of-mouth recommendations in the future as well.
No matter how much adversity seems to be headed your way, remember to keep things simple and concentrate on what you do have control of. Look to your immediate business and see opportunities and areas of improvement. Then have the courage and self-belief to implement them. Not everything will work, but you’ll succeed at most and learn even more from the other strategies that didn’t.
By Claire Macfie