Where I live, there’s quite a battle going on between grocery stores to get more and more shoppers to come through their doors and earn their loyalty so that they keep shopping with them over and over again. These “frequent shopper” programs come in all shapes and sizes across all types of retail markets. Until recently, these programs have been relatively the same, with little differentiation among them. Then, one grocery chain acquired some independent gas station outlets and, before long, you could earn free gas fill-ups with enough frequent buyer points from their stores. Voila, the game changed!
It’s tough to find real “game-changing” tactics out there anymore, in any market. There are so many sophisticated marketers employed by so many sophisticated retailers and service providers that for one entity to truly break free and create a game-changing marketing program is indeed unique and becoming rarer each year. In the collision repair market, the game changer was the direct-repair program (DRP), and when it was first implemented, it indeed seemed as though the insurance industry had come up with a truly unique and consumer-friendly marketing tool that would benefit both its policyholders and the body shops that serviced them.
But like many good marketing concepts of the past, the DRP seems to have lost its way, let alone its luster. With every insurance company offering up (basically) the same type of service, with some subtle variations, policyholders find themselves back at square one, searching for true differentiation among the litany of insurance providers. Alas, there is none, and thus the price wars have begun. Now, instead of a marketing concept that, in theory, could have worked for many, we have a severe lack of differentiation among insurance providers and an absence of true value for policyholders. Basically, we have a bidding war among insurance companies to attract policyholders that’s bolstered by multimillion dollar ad campaigns. Unfortunately, the trickle-down effect of such mundane marketing eats away at our industry’s core values and competencies, not to mention pressures already-thin profit margins even further.
In California, repairers are taking the anti-steering campaign to the state legislature in hopes of getting a bill passed that would require insurers to qualify whether a claimant had first selected a shop prior to reporting the accident/claim. And, if so, the insurer would then have to follow current law that directs it not to recommend other repair choices (i.e., the “essence” of the DRP in the first place). If this bill were to pass, it would further dilute the concept of a DRP and further diminish insurers’ ability to differentiate themselves from one another, at least as it applies to offering DRP service. Certainly, not a bad result for a multitude of shop owners across the land who have despised DRPs from the day they were first introduced.
It appears to me that DRPs, as a marketing tool and as a way of providing a differentiated level of service, have run their course. Like many marketing concepts before them, their time has come and passed. The question that remains is, what are the next game-changing marketing concepts or differentiating services for our industry? And who will devise them? They don’t have to come from an insurance provider. They just have to be “game-changing.” Like free gas!