Industry Advice Ask Mike: What Is the Industry Getting Right – and Doing Wrong – These Days?

With Mike Anderson

This month, we “ASK MIKE” to share his thoughts on what the industry is doing well – and where it’s falling short – as we enter a new year. We at Hammer & Dolly hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.

Hammer & Dolly: As we enter a new year, what are a few things about the current state of this industry that inspire and encourage you as we head into 2025? What is the industry doing RIGHT at this point in time?

Mike Anderson: First, capture rate is the number one KPI that the industry needs to focus on. No other KPI matters if you don’t have vehicles to repair. A high capture rate ensures that shops are consistently bringing in vehicles. Without that, even the best operational efficiencies and customer satisfaction metrics won’t make a difference. While I recognize that most shops are quite slow right now, the industry is experiencing many positives. There’s a growing emphasis on technology to streamline operations and improve repair accuracy. Additionally, more consumers are prioritizing quality repairs and are willing to pay for services without a third party, which bodes well for us moving forward. 

In 2024, I observed our industry adapt to change and embrace software designed to improve business processes. When I spoke with friends in other industries, I realized ours had been lagging in this area. On an encouraging note, paint companies have been introducing software that streamlines paint matching, tinting and similar tasks. We’re seeing new software used to capture not-included operations, manage production and handle invoicing for seam sealer, double-sided tape and other durable items. CCC and AkzoNobel have been especially active with new production software. It’s exciting that the industry is looking to new software for solutions as we begin 2025. I’m really looking forward to what the future holds. 

Traditionally, recruiting has been challenging for our industry due to a lack of robust benefit packages. The Society of Collision Repair Specialists (SCRS) strengthening its 401(k) and health insurance programs is a huge positive for us entering the new year. The average shop can now offer a strong benefits package to its team members. Kudos to SCRS for providing this to the industry! I’m eager to see what additional benefits the association will come up with. The SCRS blend study was another highlight. It received positive feedback within the industry – even if insurers have yet to fully embrace it. The study was a win for us, and it’s always interesting to see what SCRS does next. 

While we often hear about high school collision repair programs shutting down, 2024 saw many post-secondary schools thriving, largely due to Enterprise’s investment in collision engineering programs. This may provide us with new options to tackle the training challenges we’ve faced in the past. Additionally, 3M launched its entry-level training to help fast-track preppers into painter roles, and BETAG Innovations developed more entry-level training as well. BMW also announced restricted parts sales for steel in 2024, which is another positive step forward.

I understand there’s a debate over using AI to write estimates, but we’ve seen advancements in using AI to handle scheduling requests, online reviews and other tasks along those lines. Software will always be at its worst when it’s first rolled out, so things are only going to get better from here. Updates, improvements and bug fixes will enhance this software’s performance over time.

Some states, including Montana and Rhode Island, are making progress on the legislative front, with Texas also starting to gain traction. Other regions are set to duplicate these advancements. There’s a lot of positivity to be found in various places across the country. 

H&D: In your opinion, what is the biggest area for improvement that shops need to focus on in 2025?

MA: Back to a point I made earlier about consumers paying independently to get their vehicle fixed, Repairer Driven News recently published an intriguing article (bit.ly/OOP40) stating that about 40 percent of consumers now prefer to pay out of pocket rather than going through insurance. Too often, during the busy times of the past two years, body shops became ‘order-takers.’ They neglected to focus on sales, didn’t pay enough attention to customer relationships and didn’t develop or implement long-term growth strategies. When a consumer calls a shop, the person answering the phone will ask, “Have you filed a claim with your insurance company yet?” or “Have you had an estimate done yet?” We need to shift our approach and start asking, “Have you filed a claim with your insurance company, or are you paying out of pocket?” It’s essential to educate consumers about the benefits of paying out of pocket instead of automatically filing an insurance claim. Paying out of pocket also allows consumers to have more control over the repair process, from choosing the shop and parts to ensuring the quality of the work. Additionally, shops should consider offering financing options for consumers who choose to pay for their repairs themselves. That would be another opportunity for them to increase the capture rates I mentioned before. Best of all, having the consumer pay out of pocket puts them in direct contact with the shop throughout the entire repair process, which is always a great thing. 

Want more? Check out the January 2025 issue of Hammer & Dolly!