Considering the Consumer

CARSTAR’s 20-20 Vision Conference, held August 18-20 at the Deerhurst Resort in Huntsville, Ontario, focused a great deal on the changing expectations and economic environment of auto insurance and car collision repair consumers across the country.

Tom Connellan, author of the book Winning With Customers, kicked off the conference by talking about the importance of trying to see the collision repair industry’s service through the eyes of its customers. He noted consumers are increasingly comparing across industries, and so, rightly or wrongly, consumers are comparing the service of car collision repair centres against service they receive from their banks, restaurants, airlines or even tourist destinations like DisneyWorld.

Adapting to these apples-to-oranges service comparisons requires car collision repair centres to recognize the importance of managing a consumer’s memory of the service they received, Connellan said. To this end, he urged franchise owners to make sure consumers remembered a good experience for each of the various ‘touch points’ at which a consumer comes into contact with the collision repair centre. In part, this requires centres to identify what could go wrong over the course of servicing a person’s car, and then adapting policies and procedures for handling these situations when they arise. Connellan told CARSTAR franchise owners from across the country attending the conference that they could do the best paint or repair job in the world, but if the consumer left the place remembering unclean shop conditions or poor service, they would not be acting as brand advocates for the collision repair franchise.

In this context, George Cooke, president and CEO of The Dominion, called on collision repair centres to focus on the head space of the consumer requiring auto repairs after the implementation of the Ontario auto insurance reforms. The reforms are designed to give consumers more choice in customizing their own auto insurance products. As of Sept. 1, 2010, Ontario consumers will see medical and rehabil- itation benefits for their standard, mandatory auto insurance coverage reduced from $100,000 to $50,000, although they will have an option to buy back coverage of up to $100,000 or even a $1.1-million limit. Some mandatory benefits in the old package — such as caregiving and home maintenance benefits — will be converted into optional benefits.

Although these changes are designed to give Ontario consumers more choice, they are likely to create confusion for the consumer during the early period of the reforms. Recent statistics bear this out. Shortly after the CARSTAR conference, a survey sponsored by RSA suggested many Ontario consumers still don’t fully understand the province’s auto insurance reforms. The RSA study found that nearly 70% of Ontario drivers did not understand the impending auto insurance reforms or how the reforms would affect their auto insurance coverage. Leger Marketing was commissioned to conduct the survey, which polled 1,524 Canadian adults. Of these respondents, 625 resided in Ontario.

Only two per cent of Ontario drivers surveyed by Leger said they had a confident grasp on the legislation and its effect on costs. “These statistics show there is a real opportunity for brokers to educate drivers on the host of improvements the auto reforms will bring,” Irene Bianchi, RSA’s vice president of claims and corporate services, said in a press release announcing the survey results.

It also provides an opportunity for collision repair centres across the country, Cooke suggested. He said to the extent that collision repair centres empathized with consumers’ confusion — and their shrinking pocketbooks — and pointed them to available resources that would help explain the reforms, the centres stood to gain a service advantage over their competitors.

“Part of the immediate future is that [when an insured comes to a repair centre with] a claim on the 15th of September or the 2nd of November, they’re likely to be a lot more confused about their insurance coverage than [prior to the reforms],” Cooke told the CARSTAR franchise partners. “To the extent that you guys …[have] a little broader understanding of the situation in which Mom or Dad find themselves in, vis–vis their entire insurance purchase, that gives you an advantage on somebody else that’s in a different location. I suggest to you that a broader understanding is valuable in the sense that it might just help you relate more so than somebody else to how that particular consumer is feeling.”

Sounding a bit of a warning shot across the bow for the insurance industry as a whole, Cooke said his advice had a wider application than just in Ontario. “It’s a period of great change for them in this particular province [of Ontario],” he said. “And I suspect that that kind of reform is going to migrate East and West of here.”

CROSS-BORDER CLAIMS MANAGEMENT

CARSTAR’s Care Centre, a call centre for assigning claims to CARSTAR locations, has enabled the development of a cross-border claims management program.

“There is a lot of demand from our insurance partners for a U.S. claims solution, with CARSTAR in Canada but also integrated with CARSTAR in the U.S.,” CARSTAR national account manager Bing Wong said at the 20-20 Vision CARSTAR industry conference in Huntsville, Ontario. “We are currently in the pre-pilot stage of this program.”

The Care Centre would, among other things, help with the transfer of warranty, obtain priority service for insureds and their vehicles, add additional accountability in the repair stage of the system, eliminate potential blocks in the appraisal process and generally expedite the cross-border claims process, thereby potentially saving “tens of thousands of dollars.”

Wong said the cross-border claims management system would prevent unnecessary wait times that add to con-sumers’ claims costs and frustration.

He cited one cross-border situation in Saskatchewan in which a block in the appraisal process caused a two-week waiting period. At the end of two weeks, the car was written off for $12,000.

A repair facility representative in Saskatchewan expressed frustration that had the block in the appraisal process not occurred, he could have repaired the vehicle for $3,000 and sent the customer on his way in three days.