Rising Repair Costs Emphasize Need for Good Customer Service
July 6, 2021—The pandemic helped accelerate the already breakneck pace society has been on in the shift toward digitization and the increasing reliance on technology.
As more people continue to work from home, shortening their commute to just the walk from the bedroom to the home office, the automotive repair industry has seen a surprisingly big impact on how it does business. With traffic down significantly last year, there have been fewer accidents.
Despite that reduction in overall volume, though, the CCC’s annual Crash Course report shows the average cost of a repair has seen a steady increase over the last several years.
As the cost of repairs and the time needed to complete those repairs go up, the CCC reports customer satisfaction and willingness to recommend a shop typically falls. Because of this, shops need to curate the customer service experience more personally to each individual customer in order to keep them happy and coming back to the shop.
More Time, More Money
According to the CCC Crash Course report, upward of 75 percent of repair shops have seen a decrease in month-to-month revenue compared to similar points last year during any given month. As volume has gone down, though, the average appraisal on a vehicle in need of repair rose by 5.5 percent to $3,241. The report cites “consumer preference for light trucks and vehicles loaded up with the newest technology” as one of the main causes for more complex and expensive repairs.
More specifically, as ADAS technology becomes standard in vehicles, repair shops will need to shift their focus to being able to quickly and efficiently repair cameras, sensors and other technology that is becoming increasingly common.
Per the CCC report, electronic repair components are starting to make up a larger portion of total repair estimates, showing an increase from 4 percent to 6 percent in the past year. The two most common components were cameras and sensors, which cost an average of $110 and $577, respectively, to replace.
Even in minor collisions, ADAS equipment can require a full recalibration. According to the report, about 5 percent of vehicles repaired in the past year included a calibration entry, the average price of which was just below $260.
“All these components must be aligned properly to work as designed, and even a minor fender bender can result in the need to reposition, reprogram and/or recalibrate these systems,” the report says. “Even the removal and replacement of a camera, sensor, radar or lidar may require recalibration, depending on the OE and how its system is designed. Unfortunately, calibration requirements can vary dramatically by automaker or even by individual vehicle and ADAS technology, reinforcing the importance of understanding the OE repair procedures.”
As the complexity and appraisal rate of repairs increases, the CCC also reports repairs are taking longer on average to complete, up by nearly half a day from the end of 2017 to the end of 2020.
Repair shops can do very little to combat rising costs of repair as technology in automobiles advances. Because of that, those shops need to adapt how they interact with customers in order to keep service satisfaction high.
“Consumer expectations have been set by platforms such as Amazon, Facebook and Netflix that provide customers a fully curated experience with information anticipated even before requested,” the report says.
Customers have become increasingly reliant on technology through the pandemic, and have come to expect fully curated services. The CCC says this level of service becomes even more crucial when a customer comes into a shop due to the traumatic nature of going through an accident and a customer expects empathy.
“It’s no longer enough just to repair the vehicle well. In the post-pandemic world, the customers’ expectations of their repairer experience extend to things like how they find and select you and how they engage with you and ask questions, schedule appointments, check in, and provide feedback and reviews," the report says. "With nearly 90 percent of collision repair revenue coming from insurance claims, repairers aiming to retain their share of that revenue must adapt to new insurer and customer expectations.”
While shops can’t make a customer’s car any less expensive to fix, they can provide “transparency, ease of use and … personalized and curated experiences,” making customers feel more comfortable, welcomed and informed throughout the repair process.