Time is Money: Estimating in a Post-Blend Study World

by Chasidy Rae Sisk

Blending takes longer than refinishing – it’s a fact that painters and other collision repair professionals have known for years, yet cries for an update to the 50 percent calculation cited by all three major information providers (IPs) fell on deaf ears until the Society of Collision Repair Specialists (SCRS) teamed up with AkzoNobel, Axalta, BASF, PPG and Sherwin-Williams to evaluate blending in comparison to full refinish values when considering solid, metallic and tri-stage refinish options across all the paint manufacturers.

The results of the study, released during SEMA 2022, determined that blend times are 31.59 percent greater than full refinished value on average, a significant improvement over the accepted 50 percent less than.

Repairers have hailed the blend study as a herald of much-needed change for the industry, but while some shops have enjoyed a lot of success in collecting more accurate compensation, others have struggled to negotiate an increase in the labor hours actually required when blending. Why is this happening, and how can shops overcome these difficulties? It’s important to first understand how the IPs responded to the SCRS blend study.

The IPs’ Response

So, how did the IPs – CCC/MOTOR, Audatex and Mitchell – respond to the study? 

After conducting its own observational studies of the blend process, CCC/MOTOR released guidance in April 2023, changing its Estimated Worktime Development Methodology related to color blend of adjacent panels to account for variations in modern vehicle paint refinishing. Since their October system enhancement, users are able to click a blend button in CCC ONE which automatically calculates a two-stage blend at 50 percent of the refinish time and a three-stage blend at 70 percent of the full refinish time. An on-the-spot evaluation allows users to either input a default value for two-stage and three-stage blends or opt to have the system prompt them for the blend time specific to that repair.

CCC also updated its Guide to Estimating to remove the prior formula and add verbiage clarifying that “estimated refinish times for color blending should defer to the judgment of an estimator or appraiser following an on-the-spot evaluation of the specific vehicle and refinish requirements in question.”

MOTOR specifically identifies judgment time as “the outcome reached when an estimator or appraiser considers the specifics of the vehicle and repair or refinish operation being evaluated to determine the estimated work time,” according to their response to inquiry #36042 submitted by the Database Enhancement Gateway (DEG).

DEG’s inquiry questioning MOTOR’s removal of blend formulas elicited the following clarification: “MOTOR removed the previously published color blend formulas after determining they may not reflect the many variations encountered with modern vehicle finishes and designs. Citing these variations, MOTOR does not intend to publish a list of included or excluded items specific to color blend.”

Audatex followed suit with a July 2023 update, ultimately providing users with the ability to adjust refinish labor time to specify a value between 50 and 150 percent in October 2023, and by the end of 2023, the IP had updated its Database Reference Manual to remove its previous 50 percent blend formula guidance which was replaced with the following:

“Audatex refinish labor is based on the use of new and undamaged panels. Audatex Estimating does not provide a standard labor allowance for blended panels as this requires the estimate preparer’s judgment, expertise and consideration of the unique requirements for each repair. Determination and assessment of labor and materials necessary in the blending process is best provided by the estimate preparer during the estimate preparation process. To assist the user, profile settings allow for customization to enter a specified blend percentage, as necessary.”

While CCC/MOTOR and Audatex both made changes to their systems last year, Mitchell remained reticent…until earlier this year when Repair Sales Senior Vice President Jack Rozint casually announced an imminent enhancement to Mitchell Cloud Estimating during open mic at the Collision Industry Conference, held in Palm Springs in January.

“There have been a lot of questions, apparently, about what Mitchell is doing in the area of refinish calculations,” Rozint acknowledged, explaining that an upcoming release to Mitchell Cloud Estimating would offer “the opportunity for users to set up, at the profile level, seven different areas of refinish calculations,” allowing users to “set up their own default settings for clear coat, three-stage and two-tone blend refinishing adjustments as well as different blends for each insurer, giving a ton of flexibility to our customers.”

In response to Rozint’s announcement, SCRS Executive Director Aaron Schulenburg asked, “Will the guidance in the Mitchell Guide also change relative to any of the formulas, or is it just the flexibility in the actual profile setup?” to which Rozint responded, “Our defaults will not change at this time.” So, Mitchell’s guide still indicates blends as 50 percent of the full refinish time, unlike the other two IPs that updated their solutions to provide profile flexibility and updated their guidance to recognize the variables associated with blending and changes in modern automotive refinish products. The updated guidance in CCC and Audatex addresses the difficulty of blending by recommending deference to the judgment of an estimator or appraiser  following an on-the-spot evaluation of the specific vehicle and refinish requirements in question.

While Mitchell communicated these changes as an improvement, their insistence on adhering to the 50 percent formula that has been utilized in their Collision Estimating Guide for more than three decades will likely continue to make it challenging for shops to take advantage of the system’s newfound “flexibility.” 

Although Rozint claimed that the enhancements are designed to provide users with greater flexibility and control over labor time calculations and will enable repair planners to adjust all seven common refinish calculations in the estimate profile (clear coat, refinish, blend, three stage, two tone, finish sand and buff and de-nib and finesse), Mitchell’s insistence on maintaining its previous guidance is curious in light of evidence that has been repeatedly presented.

Collision Industry’s Reactions 

Shops did not need to perform additional research; they already knew the results of the SCRS blend study were accurate, and most were excited to see a formal acknowledgment of their experiences, though feelings about the IPs’ responses were very mixed. 

“Based on how I have seen the blend study play out for our members here in Minnesota, shops’ initially positive convictions have been eclipsed by frustration in how third-party payers are responding,” reported AASP-MN Executive Director Linden Wicklund. “Shops often look to the IPs as being impartial mediators, and this was a reminder to shops that the IPs step out of the way or hinder negotiations with ambiguity more than they are going to mediate. If people thought the study was about fighting bad facts with true facts backed by data, they are likely disappointed by the outcomes from the study. If they thought the study was about highlighting key flaws in the power dynamics of the industry and empowering shops to know and advocate for their work, then they are more likely to be fueled by the study. The theoretical debates that take place on the national stage are very different from the everyday debates on a local level.”

“Our painter is our best resource for information on his experiences in the booth, and he has always echoed exactly what the blend study found: that blending takes a lot more time and effort,” said Will Latuff (Latuff Brothers Auto Body; St. Paul). His shop’s primary database is CCC, and while he feels their decision to “acknowledge the blend formula was incorrect and remove it was a good first step, they completely failed the collision industry by neglecting to come up with a solution to the problem that was highlighted, which makes it much more difficult to process a claim.”

Aaron Swanson of LaMettry’s Collision agreed that the IPs’ response was disappointing. “The blend study proved what shops have argued for years – that it takes more time to blend a panel than to paint one – yet the IPs simply removed the calculated blend time in their systems, leaving it up to the shop and the adjuster to calculate, when they should have completed their own study and provided data to address a known problem with their product.”

“We have known for a long time that blending takes longer, but we just didn’t have any acceptable proof,” offered Nikki Anderson (D & B Auto Body, LLC; Sauk Rapids). “I was glad to see the IPs respond so quickly, but I was a little disappointed that Mitchell, my operating system, was not as quick to change.”

Giving “credit where it’s due,” Danny Gredinberg from the Database Enhancement Gateway (DEG) gave “kudos to CCC and Solera for acknowledging the industry’s concerns and making corrective actions after the study was completed in recognition of the fact that there are many variables in the refinish process; they no longer provide a formula and indicate the time must be determined based on ‘end user judgment.’ Although Mitchell took some additional time to respond, they finally did, and while it may not be what repairers had hoped for, at least they allow the end user to make a change in the database, regardless of whether the IP changed their formula. I know some people are frustrated because no one is saying what the time should be, and while the changes made obviously do not accommodate everyone’s concerns, we are still seeing movement in the right direction.”

Estimating Tips in a Post-Blend Study World

No matter how much data is available to justify the need for it, change is never easy. It always takes a while for it to be embraced by all involved parties, and that standard certainly seems to apply when there’s money involved. So, how can shops convince third-party payers to cover the actual labor hours it takes to blend?

“There’s going to be a lot of struggle ahead for the industry while this gets sorted out and a solution comes to fruition,” Latuff predicted.

The absence of definitive calculations has presented challenges for many repair facilities. According to Anderson, “So far, we have not been able to negotiate any more hours from our insurers. They claim that their company is leaving the standard of 50 percent for blend panels and not changing it. I use a paint inventory system and seem to have a 50/50 success rate on recovering the cost of materials.”

LaMettry’s has seen greater success in negotiations by using “the study results as the basis for our calculated blend time when entering in the blend value,” Swanson reported. “We also provide a link to the study in the body of the estimate for the adjuster to review.”

Reading the study results is vital – not only for insurers but, more importantly, for collision repair professionals who want to be able to charge accurately. “The first step is actually reading the blend study,” Latuff insisted. “It’s not a long document, and it’s very accessible. You have to share it with your entire team so everybody knows the basis for the decision for the change by the IPs. From there, engage your paint staff in a conversation about what it takes to blend. Then set up your estimating system to make the on-the-spot evaluation with a reminder to enter the judgment time, and train your blueprinters on that process.”

“A lot of shops get stuck on the fact that a study was done, but they have never even read the report,” Gredinberg agreed. “Shops need to understand the paint and repair process at hand. The study itself is not going to resolve the compensation portion; the shop has to understand their process because that process is going to differ between different paint companies. You need to understand your paint requirements and stop comparing yourself to another repairer or accepting the pushback that someone else can do it this much quicker because everyone is going to be a little different.

“CCC and Audatex acknowledged that there are variables in the paint process, so the first thing a shop needs to understand is what it takes to perform that blend, using the proper products to perform properly,” he continued. “And at the same time, they need to understand how the databases work and be willing to have a conversation about your processes up front. Just because the study offers certain conclusions, that doesn’t guarantee anything because each repair outcome requires an on-the-spot evaluation.”

Schulenburg also encouraged repairers to be conscientious that they spend time understanding the variables within their own process at their facility and use that to present data in a meaningful way.

“It’s easy to state that you’re doing something because of what the blend study says, but it fails to really express how the research relates to what is happening in your repair process and tasks that your technicians are already performing in your repair facility. Some carriers may push back because they don’t recognize SCRS as an entity that does time studies, and that’s fine; we’re not. But the IPs didn’t make those changes just because SCRS did the blend study. The study opened a conversation that led them to do their own research and come to their own conclusions, and noting that could lead to a very different conversation.”

Latuff has heard exactly that type of talk from insurance adjusters who “don’t have faith in the blend study, or they don’t believe the results, but the study was verified by DEKRA North America. Have they even bothered to read it?”

“They didn’t just update their system based on our research; they conducted their own research and based their system updates on their findings,” Schulenburg reiterated an important factor related to the IPs’ updates. “These changes are based on their decisions and are NOT the result of the SCRS blend study; that study was merely the catalyst that prompted them to re-evaluate their own information.

“This is an important fact for shops to understand and use as a talking point because an insurance company doesn’t need to believe what SCRS found during our blend study…those well-documented findings were persuasive enough that the IP re-evaluated its own studies and came to its own conclusion.”

Acknowledging that some shops have reported challenges in conversations with  bill payers around blend times, Schulenburg suggested that repairers might find it valuable to present insurance carriers with documentation related to the IPs’ responses, including trade press articles on the topic, as a means of furthering the conversation. “When we have representatives from the estimating providers who share that they are aware and have been aware of this being an issue long before the SCRS blend study ever occurred, that’s probably useful in your dialogue.” 

In fact, Solera Product Management Senior Director David Davoodi told industry news outlet Repairer Driven News in November 2023 that Solera was already aware of the concerns SCRS and other repairers had for months – if not years! – prior to the release of the results of the association’s blend study results. 

While Latuff is willing to share the blend study with insurers via email, when it comes to interfacing with adjusters, he believes, “One of the most powerful words in the English language (and one that the collision industry needs to use more!) is ‘no.’ It has just as much power coming from a shop as from an insurer. Adjusters often like to tell us, ‘We’re just going to use the system time,’ and our response is ‘no.’ CCC and Audatex both removed their blend formulas, so those people still claiming there’s a certain percentage for blending are the equivalent of flat-Earthers.”

It’s time to arm yourself to estimate in a post-blend study world. Start by reading the results of the study, available for download at scrs.com/blendstudy.

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