The restoration industry has changed. In the old days, there was minimal regulation, fewer programs, and less control from insurance underwriters. Those days are gone. Today insurance underwriters, their vendor programs, and third party administrators are all working to reduce claim costs. And through this change there will be winners and there will be losers.
There’s an old saying “don’t put all your eggs in one basket”. Meaning if you solely depend on only one thing and the basket is dropped, all is lost. Restoration companies, who diversify their services rather than merely focusing on extracting water, will be the most successful in today’s market. This strategy of diversification is more successful than a silo service approach because you have the ability to make more money on the existing stream of claims while increasing customer satisfaction.
Dry-cleaners got a bad reputation in the insurance restoration industry for inflated invoices for textile restoration. One contributing factor for this is that dry-cleaners are infamous for the over use of “line item” charging. This is a billing practice where items that should have been processed “by the pound” are billed per item – inflating the cost of the service. The reason dry-cleaners are doing this is because the laundry and dry-cleaning is their only source of income and they are trying to squeeze every possible nickel out of the claim. Conversely, restoration contractors who have a diversified service offering don't need to over charge and squeeze every possible cent out of a single division.
We all know that its costs more to find a new customer than it does to sell to an existing customer. Yet some restorers are still only focusing on traditional marketing and business development efforts to get more claims in order to increase revenue. Another approach to growing the business is where your restoration company offers a wider range of services and simply offers the service at the job site. This is similar to the “would you like fries with that?” cross sell strategy in a fast food environment. The policyholder needs the service to get back to normal - it’s just a matter of who is going to do the work for them. Will it be you or one of your competitors?
Not only does the cross sell model increase revenue and profitability on the existing book of business but it also increases policyholder satisfaction. The policyholder has already built a relationship with your restoration company and they would prefer to only have to work with your company rather than having to work with multiple service providers. National claim satisfaction surveys like J.D Power & Associate’s How Homeowners Really Feel, show that as the number of reps interacting with the policyholder increases, their customer satisfaction ratings decrease. When additional service providers are brought into the mix it confuses the customer.
Technology and training available today allows your restoration companies to provide this increased breadth of service better than drycleaners. The Esporta Wash System restores soft contents, clothing, and textiles impacted by all categories of losses including fire, water, and mold. The Esporta Wash System restores 85% of the goods that would be considered non-restorable if relying on a restoration drycleaner. This massive increase in the rate of restoration means that the customer will get back more of their possessions with sentimental value [the quilt grandma stitched, the wedding gown, and that favorite stuffed animal your daughter has been dragging around since she could crawl]. Plus insurers enjoy are reduced claim cost because they are being forced to replace less. All while keeping a plethora of items from unnecessarily being sent to the landfill. This is a true triple win. Policyholders and insurers are happier and the environmental impact of the loss is significantly reduced.
For more information, contact Neil Grant or by phone at 800.881.7781 ext. 116
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