Calibration Data Wars

by Aaron Swanson, AASP-MN President

Each time I’m asked to write one of these editorials, I like to dig into the topics that keep cropping up in my conversations with team members at LaMettry’s and AASP-MN members.

Here is the problem I’m repeatedly struck by: shops continuously push for the maximum reimbursement possible from their payers with any increase being a win, but they don’t necessarily know their own numbers well enough to know if they are trending up or down overall on the profitability of any given operation. As I love to say, “You might have won the battle, but are still losing the war; don’t confuse the two.” To really know if you or your shop are making progress, you need to understand the territory you are measuring wins and losses by. 

As shops, both collision and mechanical, we are constantly adding data points to the estimating and shop management systems we use with every repair. BUT, if we don’t add data in a way that is consistent and retrievable, it becomes very difficult to use the data to improve our businesses. Unfortunately, in collision shops it often seems like insurance companies have more insight into our performance metrics than we do, AND it is really hard to call their bluff if we don’t know the numbers ourselves. My job is to help teams of people build and negotiate solid repair plans that meet the needs of LaMettry’s and our customers. If each one of those team members is running a different play, such as renaming operations to sneak by the AI beast, this can turn into “blind fire” with no consistent data for informed decision making. 

Right now, calibration operations seem to be the battlefield causing the most confusion and angst made more complicated by MOTOR/CCC’s diagnostic categories that attempt to standardize terminology for fundamentally non-standard operations. In my role as AASP-MN President, I’m more keenly aware of the dichotomy between collision versus general service versus mechanical repair work. Calibrations are part of all three of these areas, so please don’t stop reading thinking I’m just complaining about the headache of getting insurance companies to pay. Alignments and most operations that include removal of a part near or including an ADAS feature are going to require calibrations, so mechanical shops are increasingly having to sell these operations and consumers can simply say “no thank you” even more freely than any insurance adjustor. 

Calibrations continue to be rapidly-changing market disrupters that are hard to manage because of high barriers to entry, low margins confusing true costs, and even more confusing cost basis, as prices are pushed down by market conditions, but even more because of how widely variable the actual operations are between vehicle manufacturers. Paul Bostel, LaMettry’s Lead Master Technician and I have had many conversations on this topic recently. Since Paul is the one truly doing the calibrations he knows firsthand that an objective time study of segmented operations is nearly impossible. He wants to see apples-to-apples metrics on how his work compares to metrics provided by the insurance company. e raises valid concerns over how well the data is being cleaned to account for the different theories among shops on how to include calibration operations on estimates and final bills. 

So, is your shop building enough standardization into your own data to be able to mine it for true insights? What about the shops in your regional market or on a national level? Are the place holders in estimates part of the data that will be used to set commodity-style market prices? If we don’t know our own numbers, how will we be able to ask informed critical questions about the numbers of others?

Want more? Check out the September 2024 issue of AASP-MN News!