Rethinking Estimating for Large Dent PDR

An open letter to PDR Retail and Route Professionals from Jack Pelham

A hammer is a great tool indeed, but to no one’s surprise, it is not good for every task.  While the hammer drives nails very well, it’s not so good for driving screws, and its even worse for clipping fingernails!

So it is with the way that PDR technicians have traditionally priced large dents for paintless dent repair. Before I explain, let’s take a look at how most PDR techs do it:

  1. Decide how much money (M) you’d like to make per hour of work.
  2. Decide how many hours (H) a certain dent is likely to take you to fix. 
  3. Multiply M by H to get a price (P).  So it looks like this as a math equation:  M x H = P

This method has served a great many technicians quite well for a number of years—just like the trusty 16 oz. claw hammer.  But in our ever-changing industry, there are some new tasks on the horizon—tasks for which this estimating “hammer” is terribly suited.  They are:

  1. Get your own estimators or your partners in other business to write accurate estimates for you, freeing up your valuable time.  (You only make money when you are pushing dents!)
  2. Get insurance companies to start writing PDR-possible large dents for PDR instead of conventional repair.
  3. Or better yet, get insurance companies to start making assignments directly to PDR companies for PDR-possible large dents.

Whether we like it or not, the fact of the matter is that insurers are not excited about working with a subjective estimating system such as many retail and route techs are using.  As a result, a great many PDR-possible large dents are being lost to conventional repair because of this outdated estimating method.

Well, what’s wrong with it?

Thanks for asking!  While this system works just fine for the tech doing the work, let me explain why it doesn’t look so good to the rest of the world.  Here’s a hypothetical story that I designed to demonstrate what’s wrong with the traditional system:

PDR City

In PDR City, Paintless Dent Repair is considered the greatest art form ever to exist, and all the PDR techs think that they should be earning a nice, round, $1,000 per hour for their work!  (Nice work if you can get it, eh?!) 

One day, Mrs. Johnson discovers a large dent on her car, so she sets out to get three estimates for PDR.  She finds Billy, Ted, and Ralph.  Here’s how each of them estimate the same dent on Mrs. Johnson’s car:

  1. Billy figures that the dent is going to take him two hours to fix.  So Billy uses the formula M x H = P to price Mrs. Johnson’s dent at $2,000(Don’t get too excited about these numbers; this just a story!)
  2. Ted is only half as fast as Billy.  When Ted estimates the dent, he figures it’s going to take him four hours to fix.  So Ted does the math and prices the dent at $4,000—twice as much as Billy for the same dent.
  3. Meanwhile, Ralph is as slow as Christmas—working at only 1/2 of Ted’s speed.  But Ralph also likes to make $1,000 per hour because that’s what “PDR is worth” in his town.  Ralph figures it’s going to take him eight hours to fix the dent, so his estimate is $8,000.

These three technicians, all using exactly the same traditional system to estimate the exact same dent, have arrived at three wildly different estimates!

The End.

Logically speaking, however, shouldn’t the value of the repair be rooted in the measure of the actual damage, and not in the speed or skill of the technician who is doing the repair?  But each of our three technicians in PDR City is content to keep his current estimating method, even though it is really difficult to deal with for the other players in the industry.  Shouldn’t a dent of a certain size and features and in a certain location on a panel have a certain repair price?  If it doesn’t, how can PDR ever become a standard repair for large dents?

What Others Think

  1. The Customer.  In the real world, when a “Mrs. Johnson” hears these three different estimates, she’s not going to know who is “right” and who is “wrong”.  She won’t care too much about how these techs arrived at their prices; she’s going to want them to make sense to her.  She will naturally mistrust all the techs somewhat and will be at a loss as to how to decide.  Is the higher-priced tech gouging, or is he the only one who really knows what he’s doing?  Is the lower-priced tech a fly-by-night?  Will the middle-priced tech be cutting some corners?  How can he afford to do it so cheaply?  After this experience, if Mrs. Johnson is hesitant to trust the PDR industry, who could blame her?
  2. The Body Shop.  Most body shop owner/managers do not stop to do the math well enough to fully realize their opportunity with PDR.  On their regular conventional work, they make only 3-12% profit, but when they bring in a PDR contractor, they make a higher percentage–averaging in the ballpark of 25%.  So why don’t they hunker down and run as many panels through PDR as possible?  Part of this is understandable because they’re “taking work away” from their own employees in slow times, but part is because it’s quite inconvenient for them to have to schedule a second appointment for the customer so that they can get a PDR tech to come in for an estimate for her dent.  It’s often easier all around just to estimate it for conventional, because that’s what they do all day long every day of the week.  Besides that, they’re just as puzzled as Mrs. Johnson in the story above as to why it is that different PDR techs are all over the place on their large dent estimates.
  3. The Insurer.  Insurers are the ones who drive a very large part of the autobody repair industry by writing the checks, and they are constantly in danger of being hurt by fraud, error, and inefficiency.  Being experts in risk management, they want to standardize as much as possible, removing as much guesswork and experimentation as possible.  While they may occasionally make an “outside-the-box” decision on a particular repair, they generally take the “tried and true” path toward estimating.  When insurers witness large variations in PDR pricing for a particular dent, they naturally get just as nervous as did “Mrs. Johnson” in the story above.  Before they will ever feel good about using PDR as the standard repair for PDR-possible dents, they’re going to have to see a standardized system of pricing by which any two people can come up with the same estimate.  Otherwise, it’s just too risky!

What a Difference a Standard Can Make!

If a substantial portion of the PDR retail/route industry would move towards a standardized method of estimating for non-hail dents, all of the following could happen:

  1. PDR professionals could easily generate one professional-looking estimate after another, whether for their own retail customers, for body shops and dealerships, and even for insurers.
  2. Multi-location companies could get all their estimators “on the same page”, avoiding the embarrassment that arises when customers get more than one estimate and those estimates don’t agree.
  3. Body shops could generate accurate PDR estimates quickly on Mrs. Johnson’s first visit, knowing full well that the PDR vendors they use will be happy to work for the prices the system generates.
  4. Body shops could capture self-pay customers as follows:  Give them a conventional estimate and before they can run out the door because the price is too high, also give them a PDR estimate for the same dent–which usually comes out considerably lower.  (I know of one body shop in particular that has used this strategy over and over to great effect.)
  5. Automotive service centers of various types could generate estimates for local PDR companies while customers are in for oil changes or new batteries.  (You pay them a birddog fee or a percentage for every job they get you.  That’s more work for you and an easy add-on sale for them.)
  6. Insurance adjustors could generate an accurate and credible PDR estimate for any panel on a vehicle that has PDR-possible dents.
  7. Insurance companies can make assignments directly to PDR companies.

Worth Some Thought

The way I see it, folks, adopting a system like this is worth some thought.  In fact, I’ve been working on it for a few years now, along with co-inventor Jim Sullivan (of Dixie Dent, Inc.)  We have developed and launched Sullivan PDR Estimator (SPDRE), which is a patent-pending, web-based estimating system for large dents.  (It also has a hail estimator program in Beta, included at no extra cost.)

Since introducing this to the greater industry at 2011 NACE, we’ve had many conversations with major insurers who are very excited at what a standardized estimating system can do for the industry.  They are anxious to see it be adopted by the PDR and body shop segments and are talking with us about adopting it themselves.

Similarly, we’ve talked to scores of body shops who really like the idea of no longer having to wait for a PDR vendor to show up for an estimate.  And, as I mentioned above,  this tool is particularly effective for shops attempting to capture self-pay customers who are walking out because the conventional repair estimate is simply too high.  Getting a percentage of PDR is much better for the shop than getting $0 when the customer walks!

And that brings us to the PDR segment of the industry.  At 2013 Mobile Tech Expo, we had lots of good conversations with PDR professionals from all over the world.  We left very encouraged about the mood of the industry, as we saw the “lights go on” in conversation after conversation with PDR techs who repair large dents.

Plenty of Room for Improvement!

We conducted an informal and non-scientific survey of visitors to our booth at MTE.  Of the PDR Route/Retail Technicians we surveyed, 45% of respondents said it would have “a big impact” on their business if they no longer had to travel to shops just to do estimates because the shops were doing accurate estimates themselves.  A further 40% said this would “somewhat” impact their business.  That makes 85% who are starting to catch the vision.

On the question of whether they use a formal system for their large dent estimates,  72% of PDR Route Techs admitted “I just guess”.  And surprisingly, on our contest to guess the retail price of a certain large dent, PDR Retail and Route Techs as a group gave the least accurate estimates of all the respondents, coming in about 2% lower than actual.  And the variation was alarming; the highest guess from Route/Retail Techs on our $523 dent was $850–which is $327 (or 63%) high.  And and the lowest was $200–which is $323 (or 63%) low!

So Close, and Yet So Far!

We have a great thing going in PDR.  Thousands of entrepreneurs doing their own thing as they see fit—that’s a great story to be sure!  But what if just a little bit of effort from us could make things considerably better for all parties involved?  What if a bunch of us made the smart move to make ourselves easier to work with for shops and insurers?  If we will voluntarily use a standardized estimating system, it suddenly becomes a very good business decision for the insurance industry to start writing PDR-where-possible as a routine business practice.  Wouldn’t we all benefit from the stream of new work that would come about as a result?

To my knowledge, the Sullivan PDR Estimator is the only system on the market by which anyone can estimate dents of any size for PDR.  (We invented it because there is no other solution!)  We think that all the pieces are finally in place for our industry to step up to the next level.  For this reason, we’ve created a 14-day free trial with no commitment and no credit card.

Would you please go try our system on a few PDR estimates and let us know what you think?  Everyone we’ve shown it to so far likes the pricing, but even if they didn’t, there’s an “override” function that can change the price as you see fit for any estimate.  Plus, there’s a cost of living adjustment that makes the prices higher in high-dollar markets.  We think we’ve thought of everything, but if we haven’t, we’d sure love to have your input!

You can sign up for the free trial by clicking on the big red button on our home page.

Here’s to a constantly-improving PDR industry!  Thanks for reading!

Jack Pelham,
Co-Inventor of Sullivan PDR Estimator
PDRJunction.com
HailReporter.com

 

 

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