Click on a thumbnail to see the full-size image
Would You Join a DRP Like Progressive's Concierge Program?
8/1/2003
Andy Batchelor, owner
Andy's Auto Body
Alton, Ill.
I wouldn't join a program like Progressive's because it's not a DRP-type program. In this new program, it looks like they dictate the work and how much you get paid for it. You never see the customer, and you don't get a chance to make new customers. It looks like they'll decide how long the repair will take, even before we see the car.
What will happen when a customer comes back to Progressive after his vehicle's been repaired, wanting a small adjustment made to the vehicle? It might only take a shop five minutes to fix, but it looks to me like he'll get a rental car at the shop's expense for two days or more. We'd pick the car back up and do the five-minute repair, and then take the car back Ñ not knowing if we did what the customer really wanted. Also, this ties up two people to run all these cars around. This costs a lot of money.
I'm on many DRP programs, but a DRP is built on trust. We write the bid, we deal with the customer, we do the supplements and we bill the insurance company. With Progressive, they write the bid and they talk to the customer and they make you stop working on the car if you need a supplement Ñ until they look at the car and agree with you. I don't look at this new program as built on trust in the shop.
I think it's important to interact with the customers, hear their concerns, get a feel for their expectations, decide on parts and repair or replace with customer approval. As shop owners, we represent the customers best interests to the insurance company. With this new program, all the customer gets is a one-sided look at the repair. I'd feel like my hands were tied if I lost contact with the true customers Ñ the insured or claimant. Yes, it may take up some time dealing with the customer, but this is also called interacting with the customer. ...
It also doesn't appeal to me to totally let the insurance company write the road map (estimate) for a repair and then expect us to read their minds on the methodology of the repair. I'm not sure you can get it right without some interaction with the customer or knowledgeable person on that repair.
The reason my shop still exists today is its very large and loyal customer base. With Progressive's program, we could only grow if Progressive saw fit to give us more work to expand our business. In slow times, our loyal customer base helps to keep us above water. If Progressive's claims slow down, then I guess we'd have to cut back to allow for the slowdown Ñ since we'd have no customer base. At some point [Progressive] might even want labor rate or parts discount concessions.
Also, I think you'd be somewhat reserved about speaking your mind with a Progressive adjuster for fear they might shut your well off. It takes the personality out of the repair. It's Progressive's way or no way.
No one knows the future, but it seems possible that Progressive might put the "squeeze on," knowing they have you signed, sealed and without a new customer base. Look what some of the car manufacturers have done lately. They needed more profits so they told many of their vendors, "from now on, we're going to pay you 10 percent less for what you sell us." The vendor has no choice but to make ends meet somehow on 10 percent less because they have nowhere else to sell the parts.
We've all seen or heard about the trend toward three-shift operations to help turnaround time. This would certainly work, but at a much higher administrative cost and also a higher operating cost. I can see Progressive wanting three-shift turnaround times, but quite a bit more volume in repairs would be needed.
It's possible that they might want the shop to pay for rental days when there are parts delays or when the job takes longer than Progressive projected. And what about redo work? Will the shop have to pay two or three days' rental on redos that might have only taken a day? Or maybe the redo wasn't [warranted], but the adjuster gave it to them anyway.
Maybe a shop owner who doesn't like or feel the need to talk to the customers might like to join Concierge. Some people have no personality or specific mission statement that they feel a need to maintain. Some new shops, with nothing to lose except their individuality, might jump in and test the waters.
[There's] guaranteed volume, but are there sure things in life beyond death? Maybe. A shop that has lots of space and capacity to fill might jump in. A shop that's behind financially might take a chance on creating cash for debt repayment with new-found business.
If all insurance companies did the same as Progressive, some might look at this as a form of socialism. Once you totally control my paycheck, [I no longer have the incentive] to work harder. Would we make enough to survive or thrive? We'd be just like doctors, getting paid reasonable and customary prices for what we do.
There'd be no more competition between shops, but just pray that you don't make the insurer mad or they might shut you down. We'd be a part of the insurance industry, not the auto collision industry.
If all insurers went with this type of program, it would destroy our industry as we know it. My mother said change is good, but in this case, I'm not sure it's good at all.
I know this program has been tested in a few markets, successfully – as they say. And they plan to roll out many more in large metro areas. Maybe in those markets there are so many people, you never need them as return customers. Where I live, we still put a value on our customers. I'm sure that's what Progressive is doing also. They're putting a value on my customer who happens to have their insurance.
Fidel Castro couldn't make people productive as a dictator, so I don't think it will work for the insurance companies. The only scenario that would be worse would be if the government were to take over our industry.
Rick English, body shop director
Ganley Lincoln Mercury
Middleburg, Ohio
I've been on the program for a year now, and I joined because of the volume and not having to deal with the customers. It's basically a DRP, and any DRP increases your volume. You're doing work at discounted rates, but the discount isn't much so it creates more revenue. You're going to get more cars into the shop. Think about it. Do you want to have two cars at $37 an hour, or do you want eight cars at $35 an hour? What's the best scenario? It's pretty simple: Volume is better. The Progressive program provides good volume.
If Progressive were to want more concessions in a few years, you don't have much choice. But I don't anticipate they're going to ask for more concessions. They can't keep the program alive if they ask for too much because people just won't stay on it.
The way we're set up, Progressive sends me a text message on my cell phone when there's a car to go pick up. I go on the computer, download the estimate from my e-mail and then I go pick up the car. I'm 20 minutes away from the facility. I travel more than most of these guys. There are a few that are farther than me, but most of the shops are pretty close to Progressive.
I'm also on other DRPs with GEICO, State Farm and American National. Progressive's program is appealing to me because they handle dealing with the customers, and I'm just fixing the cars for them. It's eliminating a lot of problems like rentals, customer phone calls and all that. That's the brunt of it Ñ you're not dealing with customers. You're not handling that end of the business. I'm just picking the car up, fixing it, bringing it back Ñ and they handle everything in between there.
When you're fixing cars, you get a lot of phone calls. You get calls from rental car companies, insurance agents, follow-up people who are checking on how long the car is taking. We don't get that stuff because we have a rep who comes in here just about every day. He's here about supplements anyhow so he just goes down a list of the cars. They put in target dates, and if you're near a target and you don't think it's going to be completed, he'll change it. Then their people on their end call the customer and let him know. They also call and give an update on the status of the vehicle.
It's a lot nicer not having to deal with people. ... It's not that I don't want to talk to people. It's just that not having to gives me more time to do other things.
It's not a hassle dealing with an insurance giant as my corporate boss. I don't see it as being any different from any other DRP. I don't look at DRPs as hassles at all. I look at them as opportunities. Business is business. You do what you gotta do to make your shop busy. I have a busy shop because I don't let other people get in my way. I don't care to cater to some other body shop's views on direct-repair work. I do what I gotta do.
There are some shops that are reliant on Progressive, and if Progressive pulled out, they'd be in trouble. But I don't have my eggs all in one basket. I'm in a position where if they did pull out, I'm going to lose a little bit of work, but I'm big enough that it's not going to affect me so much that I go out of business.
Being on this program doesn't eliminate referrals [and word-of-mouth] like some opponents of the program say. I'm in a unique situation. I'm a dealership, and I have 25 stores. When people come in to Progressive, if they know we're on the list, they'll request me. I've had people whose cars I've fixed and they'll ask Progressive what shop fixed their car the last time because they liked the work. I've had a lot of cars that have come back because they got in another accident. So it's not like I'm losing that business. In some cases, these people are on the other side of town, and these are people I probably never would've seen in the first place. So I'm seeing new customers.