State Farm Unveils New Performance Tool for Select Service Shops: BodyShop Business

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State Farm Unveils New Performance Tool for Select Service Shops

7/28/2010

At the Collision Industry Conference in Chicago last week, State Farm unveiled a new performance tool that was described as similar to a credit score to help Select Service Shops manage their performance.

The tool is actually a number from 0 to 1,000 that State Farm uses a proprietary process to determine based on examining all of a shop’s Key Performance Indicators (KPIs). George Avery, a claims consultant with State Farm who made the announcement, used the example of a score of 550 that would put a shop in the 25th percentile of all Select Service shops.

According to Avery, State Farm took into consideration the types of vehicles a shop repairs to arrive at the scores. As of last Monday, all Select Service shops were to have received a report on their scores.

In addition to receiving a number, shops also learn the top three factors that kept the score down so that they can improve those areas. Scores will be available on a monthly basis.

Avery emphasized that this was not a signal that State Farm will once again reduce the number of Select Service shops, even though the insurer is still overcapacity in some areas.

“This is just another step State Farm has taken to look across the board and help shops self-manage themselves,” Avery said.

Comments (19)

Comment by:
EDUCATOR
8/4/2010
11:48 AM

To: VILAS,

i too work in the auto body industry. And I too work at a body shop. BUT i know that the moment i get the car in my shop i have the opportunity to make money. THE DIFFERENCE is I DON'T WHINE AND COMPLAIN THAT I'M NOT MAKING A PROFIT and the insurance companies are the devil.

We all have garage keepers, we all have liability insurance, we all have bills. ESTIMATORS (most shops have them on commission) my shop they are not, (my theory is it produces greed and with greed your encouraging fraud THAT IS SIMPLY MY OPINION) the truth gets stretch a little too much. YOUR TECHS (most on commision) when business is so slow and they have to act like wild pitbulls to get the next job ARE THEY CONCERNED FOR THE CUSTOMER OR FOR THEIR PAYCHECK (again, greed comes in) I understand mark ups, i understand making a buck but stop the crying. You are making money the moment the car hits your parking lot.

The insurance companies ARE ADMITTINGLY saying THIS IS WHAT WE PROVIDE YOU, THIS IS WHAT WE WILL DO FOR YOU. ARE YOU TELLING YOUR CUSTOMERS WHAT YOU WILL DO FOR THEM. no. ONCE AGAIN YOU BLAME IT ON SOMEONE ELSE.

i have had many of elderly folks come in my shop who are living on pennies of a pension. This information may be important to them. Do they understand that the higher the bill the more they will have to pay back. Do they understand that? ARE YOU HERE TO HELP YOUR CUSTOMERS or IS IT ALL ABOUT THE MONEY. We spend more time pointing our finger and yelling at the insurance company but in todays society and economy when so many are out of work and completely broke and watching every penny. Do they understand that YOUR 25% MARK UP IS because YOU NEED TO MAKE A HUGE PROFIT.

And furthermore 25% mark up for a drive to the end of the street. Is that justified? And so that you know. My shop is in the profit. And yet, i'm not complaining on a daily basis about how i'm being wronged.

So let's start this over.

Dear Customer,

We as the body shop are here to help you through your process and to help you with your insurance claim. We understand that during this time it will be a scary and confusing experience for you. Although we know ultimately you will have your rates raised for a temporary time until this claim is considered paid back to the insurance company. We will do our very best to make sure that your vehicle is brought back to it's original condition and that your vehicle is once again safe for you.

Know that while i have possession of your vehicle i am 100% responsible should anything go wrong or a disaster happen while in my possession I TOO have insurance to cover anything that is to occur. I am here to make a small profit on your vehicle while it is here due to the fact that i too have bills and insurance payments to make. But i will keep close care that i don't try and over charge you in any way. I understand we both have budgets and we both have bills and i will keep all this information close to me as your repairs proceed.

Should you nee

Comment by:
Vilas
8/4/2010
11:06 AM

To:Educator

Let me educate YOU.

Unfortunately those of us in the private business sector do not draw our pay check from the government funds (which always seem to be in the red, to many people getting overpaid).

That is the reason we need to make a PROFIT to stay in business.

We Charge a markup on sublet repairs because we arrange the appointment& pickup and deliver the vehicles as well, we are responsible for the repair that have been done. This is called Liability - there is a NEED to profit from these repairs so we can pay our Garage keeps insurance premiums as well as cover the employee expenses.

Unlike state and federal employees we actually produce product and services to EARN OUR pay.

I would highly recommend to you that you "Educator" work in the private sector and educate yourself on what it actually take to keep a business open and turn a profit.

Or perhaps you were unable to do so profitably and that is why you work for a government agency.

I have spent to many hours training insurance adjuster on the proper repiar of vehicles, which I have never been reimbursed for. Perhaps they had attended your class.

Sincerely,

Niceridellc@yahoo.com

Comment by:
Vilas
8/4/2010
11:00 AM

Comment by:
EDUCATOR
8/2/2010
5:12 PM

DEAR MR. INSURANCE COMPANY,

if i have a claim for $3000 unfortunatly my rates do go up. They go up for a period of time where ultimately i pay that $3000 dollars back. I understand it to be that way. I appreciate the fact that you looked after me in a time when i was unaware of my surroundings and didn't have knowledge of where to turn next.

Dear Mr. Bodyshop,

it is my understanding that most of your estimators work based on commision or are rewarded based on monthly numbers. Also you are given discounts from many parts manufactuers that you don't pass on to me the consumer. When you send my vehicle out for repairs that you don't have machinery to work on you ADD 20 to 25% mark up. And we don't work off of actual time to repair my vehicle we work off of SOMETHING CALLED BOOK TIME. Also i am finding out that your technicians are paid according to the work they push out the door not hourly so ultimately they need to push for my time too because that determines their paycheck.

While so many have their hands in MY COOKIE JAR THAT ULTIMATELY i end up having to pay back. WHY IS EVERYONE BLAMING THE INSURANCE COMPANY.

I THANK YOU MR. INSURANCE COMPANY FOR ACTUALLY TELLING ME UP FRONT WE WILL PROTECT YOU BUT we can't lose money. We will make sure that no one takes advantage of you and we will guide you through the process. We have auto shops we do alot of business with that are willing to work with you. And we will work with other shops too.

If you use one of the shops we are accustommed to using we will give you a guarantee and a lollipop thanking you for your business. If the other shop gives you sour apples instead we can't speak for them.

We appreciate your business either way.

Comment by: J. PAGAN 8/1/2010 11:36 PM	Get rid of D.R.P. 'S ,GET PAID A DECENT LABOR RATE, AND LET QUALITY REPAIRS AND GOOD CRAFTSMANSHIP DECIDE WHO GETS THE BUSINESS. The only thing the insurance co. cares about is bottom line and how much money they dont have to pay.

Comment by:
Adjuster
7/30/2010
12:56 PM

I am an auto Adjuster for one of the major Insurance Companies (think top 3) and started my career as a collision tech. I am very anti-DRP and my personal opinion is that they allow the less qualified to survive where in a normal business environment they may not. I only only allowed to recommend certain area shops when I know that there are far better shops in my market. I have had to re-inspect and do many corrective repair estimates on vehicles that have been repaired in DRP shops. Don't give up your voice...

Comment by: Ed Griffin 7/30/2010 9:56 AM	If shop's would stop relying on Insurance Companies who will always be more concerned with their own agenda's and start relying on work the old fashion way by "Earning It" our industry would improve unimaginably. We have to be concerned with all shop's and not just our own or this cut throat mentality will continue to plague our industry.

Comment by: Ed Griffin 7/30/2010 9:36 AM	DRP'S = CONTROL NO DRP'S = LESS CONTROL FOR INSURANCE COMPANIES LESS CONTROL = MORE CONTROL OVER YOUR BUSINESS LET'S STOP SLITTING OUR OWN THROATS!!!!!

Comment by: JR 7/29/2010 5:16 PM	Zzzzzzzzz - - - Zzzzzzzzzzzzzz - - - Zzzzzzz. The collision industry has been doomed for a few years now because of all the suck up's!!!

Comment by: Precision 7/29/2010 12:21 PM	To GM above, you won't keep your customers because they will never make it to your door. You must not understand how steering works. All you'll know is your business is gone!!! Your customers won't call you to say they are not coming!!

Comment by:
GM
7/29/2010
11:53 AM

I don't think DRP's are going anywhere anytime soon not matter how much we all complain. However I use my DRP status for work, but more for a customer base. If I can get the customer in my door, I am absolutely sure I can keep them as a customer, therefore if for some reason I go off a DRP program I can still maintain the customer. It is the personal touch that will keep us in business. Until insurance companies are regulated the way we are we won't win.

Comment by:
Dave Popken
7/29/2010
11:51 AM

Dear Bodyshop,

If you are not on our list: We will not recommend you,even if we have done good business with you for years. We will tell our customers to go to one our shops. But dear customer you have a choice to go any where you like. But will will not guarantee the repairs.We can discount your deductible by as much as $100.00. But dear bodyshop, you better not ( most states illegal) talk about reducing deductibles.

We dear small business we are fighting for the scaps left behind by the big dogs of the insurance industry. Do I sound a little bitter? I guess my feelings are hurt after 40 years in ths great business.All good things come to an end....NOT

Comment by: LARRY PACK 7/29/2010 11:39 AM	DRP ARRANGEMENTS IS JUST LIKE FISHING. BAIT THEM, REEL THEM IN, AND THEN FRY THEM AND EAT THEM WHOLE.

Comment by:
Nice Ride LLC
7/29/2010
11:19 AM

When will the autobody industry create a rating system for insurance companies?? If one or more of the associations created and distributed such a rating chart to post in the sales/estimating area, consumers would immediately know what to expect in the claims process. It is time our industry takes the offense and get off it's heals. We are not the culprites nor are we the ones creating the term oil in the claims process.

Frankly we should all denounce the DRP shops and reveil them as the weak sheep that they truely are!!

Feel free to contact me directly. niceridellc@yahoo.com

Comment by: Kris Wyatt 7/29/2010 11:17 AM	We should not be so negative, we should try to work together with insurances companies. After all most of the insurance companies I work with want a quality and timely repair. Key Performance Indicators is very important to making more money with every job that comes through your shop.

Comment by: tony 7/29/2010 10:55 AM	DRP's should be illegal. It's hard enough to operate and on top of that be ruled by a co. that tells you how to run your business. Enough is Enough. Let them pay for our training and equipment and see what they think about it.

Comment by: ROY 7/29/2010 10:54 AM	James, I don't see "proprietary process"in the article. Where did that come from?

Comment by:
James
7/29/2010
10:43 AM

I like how insurance companies use a "Proprietary process" to rate its direct repair shops. This is Insurance company code for "We don't even know how it works, but it lets us do whatever we want. shops we don't like trainwrecked totals, and feed the gravy to the shops who are slitting their throats (and everyone elses) with below average labor rates and obscene parts discounts."

Not to mention the customers who are already enraged at having to deal with the insurance company, are now being sent to shops that the insurance company wishes to sink, since they know the customer will take out their anger on the shops CSI.

Comment by: Bill Witt 7/28/2010 10:09 PM	Was wondering how you get set up with a username and a password. Thanks Bill